Utilities in the United Kingdom are going through a transformational phase with Smart Meter implementation. Ofgem, the government regulator for the electricity and downstream natural gas markets in Great Britain, mandates that energy suppliers install smart metering systems in Great Britain by the end of 20201.
About 53 million smart meters must be deployed across Great Britain by the end of 20202.
For a supplier, the ramp up of volumes to be installed, or exchanged annually during smart rollout, is about 5 to 10 times their current deployment numbers.
They face significant challenges like high cost of deployment, lack of business process and field activities efficiency, uncertainty around customer churn and customer acceptance, resource and technology limitations, among others.
Business case estimates that smart meter deployment will deliver benefits of £18.6 Billion, at an estimated total cost of £11 Billion across Great Britain. Costs include meter installation, operations, IT systems, governance, administration etc. and benefits can be attributed to the consumer (savings from reduced
consumption), supplier (unnecessary site visits, reduced complaints, queries) etc. Not all of these costs and benefits are relevant to suppliers, as costs and benefits are distributed unevenly among the major stakeholders of the smart metering implementation plan.
What is critical to a supplier is a smart strategy with a single business objective of minimizing the cost of deployment while maximizing the benefits achievable.
The rollout objectives
As a part of deployment planning, suppliers need to address the different costs associated with field technician resources, non-deployment time, other urgent field work, multiple visits to finish each install, meter removal costs, resource
spread, regulatory penalty, etc., and seek benefits like customer satisfaction, lessen churn likelihood, debt propensity, etc., to name a few (figure 1).