April 18 Newsletter

April 18 Newsletter 11th April 2018

Smart Meter Rollout Stalls Again

In response to a European directive, the government require electrical suppliers to install smart meters for their customers. This will provide accurate billing and consumption data to drive energy management. Furthermore, it will provide energy suppliers and generators with data that will enable them to more closely balance energy generation with demand, and reduce generation costs.

Mandatory half-hour meters were originally installed on larger supplies with a Maximum Demand over 100kW; generally supplies spending over £15,000 per annum on electricity. There are around 100,000 of these in the UK. In 2015 the qualification for these meters was reduced to cover those meters with 05, 06, 07 and 08 profiles, or those spending more than about £7,000 per annum. This has created a further 200,000 half-hour meters.

All clients that have mandatory half-hourly metered supplies that are managed through Briar Associates can access the full suite of data reports through our website.

The smart meter rollout programme is aimed at capturing the remaining commercial supplies and all UK domestic supplies by 2020.

Rather than adopt the existing systems used by the larger, mandatory half-hour meters, a new approach was developed and almost nine million first generation smart meters – known as “SMETS1” – have been installed. However, fundamental issues have been identified with these meters which mean that their smart capability can be lost when changing suppliers. This has led to the development of second generation meters – “SMETS2”.

This new generation of meters addresses the incompatibility problem by linking the meters to a common national Data Communications Collector (DCC), making data transferable between all electricity providers. Unfortunately, the rollout of the second generation meters is not without its own problems, as technical issues have caused the rollout programme to be pushed back several times. To date fewer than 500 SMETS2 meters have been successfully installed.

Independent smart meter operators, such as Stark, are continuing to provide their own “Advanced Meter” solutions. These operate outside of DCC but provide all of the measurement and recording capabilities of SMETS2, and have their own reporting platforms.

As a result of the continuing uncertainty with smart meters and in order to avoid unnecessary disruption, we are advising clients, where possible, to delay their install until the SMETS2 meters and DCC are proven. Should you have any questions regarding smart meters then please contact us on 01384 397777.

Current Market Position

March was an eventful month for the UK energy market as prices rose, mainly due to volatile weather forecasts and unplanned outages. Wholesale prices started the month at a 12-year high due to the cold spell affecting not only the UK, but most of continental Europe.

Temperatures below the seasonal average in conjunction with high winds caused infrastructure issues, which led to a significant increased demand as the month progressed. As a result National Grid issued a Gas Deficit Warning, and within days prices spiked. This was short-lived and prices fell over the next few days as the weather improved.

Prices continued to be impacted through March as the possibility of cold weather continuing through April spooked the market. Storage stocks were depleted after a severe cold spell in late February, causing additional supply concerns.

Going forward as we enter spring, weather should no longer be the dominant factor—although temperatures below average for the beginning of April caused concerns to the market due to record low storage stocks. LNG receipts have been very poor over the winter, but during March LNG cargoes confirmed UK terminals as their destination.

smart meter