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BEIS offers temporary SMETS1 smart meter supplier relief

The Department for Business, Energy and Industrial Strategy (BEIS) could be about to relax its SMETS1 smart meter cut-off point for energy suppliers.

The government currently intends for every household in the UK to be offered a smart meter by 2020, an extensive programme which it has squared primarily at the feet of the nation’s utilities and suppliers.

That programme has been complicated slightly by the advent of more advanced, second generation smart meters. Meters are divided by their Smart Metering Equipment Technical Specifications (SMETS) into two current classifications; SMETS1 and SMETS2.

SMETS1 meters have been traditionally installed, but government is set to enforce that the more advanced SMETS2 meters are offered to consumers after 13 July 2018. As it stands, any SMETS1 meter offered beyond that date would not count towards a supplier’s targets.

The government and Ofgem have promised to come down hard on suppliers perceived to not be placing every effort into their respective roll-out programmes, and last year British Gas received a £4.5 million fine from Ofgem after it concluded the supplier failed to take “all reasonable steps” to fulfil its commitments to non-domestic customers.

However yesterday BEIS confirmed it is minded to relax its policy somewhat. A new consultation could see suppliers allowed to install a limited number of older SMETS1 meters beyond the cut-off point and still have them to count towards government-enforced targets.

That date remains under review until January, however falling short of extending it the government has sought to allow suppliers extra time to install SMETS1 meters.

This, BEIS has said, is to avoid a temporary decrease in the number of smart meters installed, which could in turn affect long-standing government targets, or result in additional costs associated with the smart meter roll-out.

Government has drawn up four specific options for consideration, including;

  • Do nothing – The current SMETS1 end date would stand with no additional flexibility provided by BEIS;
  • Proportional post end date – All suppliers would be allowed to install a certain number of SMETS1 meters after the end date, with that number capped at the number of SMETS2 meters installed prior;
  • Time-limited derogation – All suppliers who meet pre-determined eligibility and evidence-based criteria would be allowed to install SMETS1 meters for up to three months beyond the end date;
  • Quantity and time-limited derogation – Suppliers meeting pre-determined eligibility and evidence criteria would be allowed to install a set number of SMETS1 meters up to six months beyond the end date.

The government disclosed that it is minded to enact option four, allowing for suppliers to continue fitting SMETS1 meters for up to six months after the end date. However the number of installed meters will be capped at 70% of the number of SMETS1 meters each supplier installed in Q3 2017.

BEIS has nevertheless asked three questions pertaining to its minded approach within the consultation, leaving the door open for the derogation to be amended based on its responses.

The consultation closes on 10 November 2017 with a government response expected a month later, followed by a formal derogation – with any relevant changes – pencilled in for February 2018 subject to parliamentary process.