Time to move up a gear
June 1st 2008

With the Government apparently retreating on its commitment to extend smart metering, Alan Aldridge, Executive Director of the Energy Services and Technology Association (ESTA), argues that this sends the wrong message to the market

The decision by the Government to extend smart metering to 'all but the smallest business customers'was welcomed by many, including of course ESTA.Cumulatively, the SME sector consumes a great deal of energy, but because energy is not a major cost for most individual businesses and their human resources are focussed on issues which are seen as more immediate priorities, the sector has proven difficult to engage in energy management programmes.Carbon Trust research has made clear that in general only a small proportion of potential energy saving measures are typically implemented by SMEs.

However, trials carried out by the Carbon Trust saw advanced meters installed at over 580 sites across the UK. Results showed that by switching to advanced metering, on average SMEs could identify potential carbon savings of over 12% and successfully achieve savings of over 5%.That would amount to national savings of £300 million a year – equivalent to 2.5 million tonnes of CO2.

The work, together with results achieved in the field by suppliers of metering services, persuaded the Government that it was time to roll out smart metering to this sector.

The threshold limits set out in the consultation (and the preceding White Paper) were: Profile Classes 5-8 of the electricity markets, which reflect the highest energy users in the sub-100KWh market that currently require metering to record maximum demand peaks and load factors all non-daily metered gas sites consuming > 73,200kWh per annum.

ESTA had been broadly supportive of this cut-off point for mandatory smart metering that provides rapid (Day + 1) access to profile/half-hourly data.However,we believe that due to the falling price of technology and the rising price of energy, businesses with utility bills down to £2500 per annum could now find it cost-effective to use some form of smart metering.

We were surprised and disappointed when – several months after the consultation ended – the Government raised the gas threshold by an order of magnitude, to 732,000kWh.This reduced the number of gas sites by about 90% and was done with no consultation, the Government claiming it was a typographical error that occurred in the White Paper and was transferred to the consultation.However, the real point is that those responding to the consultation felt the lower figure was quite achievable.

This kind of action – moving the goalposts at the last minute – does not give the industry confidence in the Government's grasp of detail, nor in its ability to push through legislation which is good for the country and for the small business sector. If we are to combat climate change then some ambition is necessary.

On the positive side, though, the smart metering roll-out to industry is continuing, although the timescale seems to have started to slip from the dates given in the Government's response ("within 5 years" as stated in 2007 has now become 2013).Other initiatives, like the Carbon Reduction Commitment and the introduction of DECs (perhaps soon to larger private sector buildings) will reinforce the importance of metering, especially automatic Monitoring & Targeting (aM&T). While it looks like two steps forward and one back, at least that still represents forward movement for which our industry – and the UK economy – should be grateful.

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