by Malcolm Fletcher
Technical considerations shouldn’t be the only concern for energy retailers and DNOs
The dawn of the smart meter age is now finally upon us. The Data Communications Company (DCC) has moved its systems into production, and most energy suppliers are already engaged in user entry testing to ensure that their smart metering systems integrate properly with the central hub. With the full go-live set for November 2017, an estimated 53 million smart meters will soon start to be rolled out to homes and businesses across the UK.
For both energy retailers and distribution network operators (DNOs), the smart meter programme is one of the most significant shakeups in recent history. Most of them have already put considerable effort into building the new systems and technical capabilities necessary to support the new infrastructure and data-flows—and while some technical challenges may still lie ahead, it does seem that the industry is reasonably prepared to deliver on the technical aspects of the project.
The concern now is more on the operational side. In many cases, companies have focused so strongly on systems integration that they have had little time to think about the impact of smart metering on their people and processes. When events and alarms start pouring in from millions of new meters, what will the organisation do with that data? How can they harness it for the good of the business and their customers?
One of the first big effects of smart meters will be a fundamental change in the level of transparency for customers. The meters will display information to the consumer that they have never had access to before: when updates are applied to meters, the customer meter will be updated instantly. If there’s a price change, a power cut or a quality problem, consumers will know about it. As a result, when something goes wrong, you’ll need to be able to respond quickly and effectively.
Another important point is that transparency cuts both ways. Most energy companies are keen to have access to the much more detailed usage and event data that smart meters will provide—but a little knowledge can be a dangerous thing. Under today’s rules, for example, a DNO is obliged to fix any outage within 12 hours of it first being reported, or it must pay a penalty. With smart meters, the DNO will be notified automatically in seconds—which brings about the question of whether that the clock will start ticking immediately, regardless of whether customers are aware of the outage or not.
Essentially, smart meters will eliminate the use of ignorance as a defence. Retailers and DNOs will no longer have the excuse that they couldn’t deal with a problem because nobody reported it. This is good for consumers, and it also presents an opportunity to retailers and DNOs who want to differentiate themselves through customer service. But it is going to require careful planning to ensure that when data comes in, the appropriate processes are triggered and the correct actions are taken.
Part of the solution is going to be technical—for example, by building new analytics systems that monitor meter events and calculate key performance indicators in real-time, you can give your operational teams the situational awareness they need to make the right decisions.
However, the bigger issue is probably going to be the change management that will be necessary to bring organisational structures, governance frameworks and business processes into line with the new requirements. Today’s retrospective operational model, where you respond to events after they have occurred, will need to be replaced with a much more agile and customer centric approach, where you take action in real time as events unfold. This is likely to have far-reaching effects on everything from employee training and operating procedures to working hours and employment contracts.
Making this kind of transition before the first smart meters start coming online in November is a huge challenge—and in practice, it will probably take several years before the whole business is fully aligned with a real-time operational model. Nevertheless, the time to start is now. Companies that can get genuine operational value out of their smart meter data from day one will be in a very strong position to impress both customers and regulators, and potentially gain a competitive advantage over their less-responsive rivals.
At AMT-Sybex, we’re keen to help the industry benefit from smart metering as soon as possible—and we have been working with our clients for more than eight years to help them prepare for this transformation. In particular, our expertise in data-flow management means that we have significant experience of integrating huge volumes of data into business systems and processes and improving the customer experience. Moreover, as part of Capita, we see at first-hand the impact that operational data has made on customer service in other public-facing industries—and the many lessons that the energy industry could learn from those sectors.
If you need help or advice from an experienced partner, please reach out to us today. We would be delighted to help you take the next steps in your smart metering journey.