I am pleased to announce that four companies have signed contracts to establish and operate the Data and Communications Company (DCC) providing the shared infrastructure needed for energy suppliers to roll out 53 million electricity and gas smart meters by 2020. This represents a significant milestone in the rollout of smart meters in Great Britain.
Smart meters offer a range of intelligent functions. They will provide consumers near real–time information on their energy use in pounds and pence, as well as accurate bills to help them better manage their energy use. The rollout will support investment and growth, offering significant net benefits to the GB economy.
The Department of Energy and Climate Change has been leading and coordinating the work of a wide range of parties to develop the policy, regulatory and commercial platform to roll out smart meters, through the Smart Meters Implementation Programme.
Within this Programme, DECC has conducted competitions on behalf of industry to establish and operate the Data and Communications Company. The Department announced the award decisions in principle on Wednesday 14th August, subject to the completion of contracts. This process has successfully concluded as described below.
Capita PLC has been awarded the DCC Licence. The DCC Licensee will manage the smart metering service on behalf of its users and will contract with, and manage, the data and communications service providers. The estimated value of the licence over 12 years is approximately £175 million. The DCC Licensee will be regulated by Ofgem.
Data Service Provider contract
CGI IT UK Limited has signed a contract with Capita PLC as the Data Service Provider. CGI will develop and operate the system controlling the movement of messages to and from smart meters. The estimated value of this contract over 8 years is approximately £75 million.
Communications Service Provider contract for the North region
Arqiva Limited has agreed a contract with Capita PLC as Communications Service Provider for the North region (north of England and Scotland) and will provide wide area communications to and from the smart meters. The estimated value of this contract over 15 years is approximately £625 million.
Communications Service Provider contracts for the Centre and South
Telefónica UK Limited has agreed a contract with Capita PLC as the Communications Service Provider for the Centre (Midlands, East Anglia and Wales) and South (south of England) regions. The estimated value for these two contracts over 15 years is approximately £1.5 billion.
The Smart Energy Code will be administered on behalf of its parties by the Smart Energy Code Administrator and Secretariat. Gemserv Limited has been awarded a contract to perform this role valued at approximately £10 million over 4 years.
I am grateful to all bidders for their participation in these competitions and for the high quality of responses received. At the same time it is important that we acknowledge that this marks the beginning of a new set of challenges. To realise the important benefits for consumers, these companies must now build and test their systems and work closely with energy suppliers (and other service users like network operators) to support the smart meter roll out. This will require on-going commitment from industry, from Government and from the Data and Communications Company.
More information on the DCC’s role in the smart metering system can be found on the Government’s website.