Good morning everyone. I’d like to thank the team at Smart Energy GB for inviting me to speak today. I’m delighted to be at the Crystal, one of the world’s most sustainable buildings.
The Crystal exemplifies the potential for technology to change our lives. Indeed technology has already changed our lives in ways we couldn’t have imagined ten years ago. Harnessing the power of these changes is a challenge – but it is also an opportunity.
This venue and event really illuminates some of those opportunities – from smarter buildings and smart grids, to minimising energy consumption and taking advantage of renewable energy - and the role these opportunities can play in tackling climate change.
As the Secretary of State has made clear, acting on climate change is vital to preserving our economic prosperity, and protecting our people and our country.
We also need to make great strides in improving energy efficiency.
Government priorities and smart metering
In the context of these challenges, DECC’s priorities are clear: keeping bills as low as possible for hardworking families and businesses - and powering the economy, whilst decarbonising in a cost-effective way.
I’m here to talk about something that can make a contribution to all these priorities.
Not only will smart metering transform how the energy sector does business in the 21st century, it will transform consumers’ relationship with energy use. And this is already beginning to happen.
Smart metering benefits
Smart meters will bring a range of benefits to people’s lives. Let me set out what I see as the key benefits of smart metering for consumers – which come under ‘three Cs’:
The first C is for Control. By telling people in near real-time how much energy they are using and how much it is costing them, the In-Home Display will empower them to save energy. Smart meters also mean an end to estimated bills. Consumers will be empowered to manage energy costs like never before and avoid unexpectedly high and inaccurate energy bills. More and better data from smart meters will enable consumers to make more informed choices when choosing their energy supplier and getting the right tariff.
The second C is for Convenience. No longer will householders or suppliers need to read their meters. This will save money and hassle. For customers on pre-payment meters, topping up will be made easier, and more like topping up a mobile phone. This is fantastic news and helps us tackle the scourge of fuel poverty. Smart meters will also facilitate faster, more convenient switching suppliers.
My third C is Catalyst – smart meters will provide a catalyst for a more efficient, smarter energy system. They will provide more and better data on which to make investment decisions for Britain’s energy infrastructure.
The early rollout
More than a million households are benefitting from smart meters today. There is an overwhelmingly positive consumer experience of the early rollout, with Smart Energy GB finding this year that 84% of those with smart meters installed would recommend them to others.
I’ve met with nearly all of the major energy suppliers now to express the government’s commitment to this programme. And I have heard many really encouraging stories that this is helping them to engage with their customers in ways that were not previously possible.
We are seeing a positive change in the consumer offer too – a number of suppliers are now offering Smart Pay As You Go – which will save many customers money and deliver a much better consumer experience.
Progress and challenges
This is a solid foundation on which we can build, and we are continuing to make significant progress towards the main stage of the Programme:
The Data and Communications Company has begun its first crucial system integration testing stage on time.
All large suppliers are readying their workforces and systems for the main rollout - many are already installing smart meters. Latest published figures show 1.3 million smart meters have been installed in domestic properties and over 621,000 smart and advanced meters in non-domestic sites.
Network operators are gearing themselves up to support a high volume of installations.
At the same time, we know that reaching every household in Britain, by the end of 2020, is an ambitious aim. Any large scale national infrastructure programme brings with it a set of challenges, and smart metering is no different:
The rollout will not happen overnight, so we need to ensure continuity and momentum over an extended period.
The Programme depends on successful delivery by multiple players, including energy suppliers large and small, network operators and consumer groups.
In turn, these organisations have many partners including those delivering the smart meters and In-Home Displays themselves, meter financing companies, meter installers, IT services, marketing and communications partners, and many more. Like a good orchestra, it is important that all play the same tune, and our team in DECC play the conductor role.
Driving the public’s awareness and understanding, and ultimately inspiring them to demand and use smart meters, is also key.
But I do not believe in any way that any of these challenges are insurmountable. When a Programme has the potential to deliver such valuable benefits it is worth meeting these challenges head on.
Updating the nation’s energy infrastructure so that it is fit for the challenges of the 21st century, and working at pace to deliver by the end of 2020, is right for industry, the economy, and hard working families and businesses across Britain.
The benefits of smart metering must be delivered in the real world. We know that smart metering can and will transform the industry, so the watchword of the coming years is delivery - as this is the only way that benefits will be delivered for British energy consumers.
Beyond the next few years I am looking to a future where not only are there great benefits for individual households, but one where smart meters unlock a smarter way of living, a smarter energy grid, and a smarter Britain:
A future where we can integrate intermittent energy sources efficiently, and handle the increased demands of the electrification of heat and transport;
where energy suppliers incentivise demand shifting among consumers, reducing the need for costly investments in generation and distribution assets and saving consumers money;
where consumer devices linked to the meter provide a range of services, such as reassurance about the well-being of elderly relatives; and smart appliances communicate with smart meters and use energy when it is cheapest.
In this future, the public will be more informed and actively engaged about their energy consumption than ever before. And it will support our long term decarbonisation goals too.
Delivering behaviour change
In order to get there, we need the development of new products and services, but we also we need behaviour change.
The benefits that smart metering will bring will make a challenging journey worthwhile. Smart Energy GB are key to this journey, and will need to reach out to the diverse British public – including the most vulnerable in society, and the microbusinesses that make a vital contribution to our economy. They are stepping up to the plate – alongside Gaz and Leccy.
Energy suppliers of course also have a crucial role in engaging consumers – they are at the front line of this Programme and must provide a good experience to their customers.
But this Programme is about so much more than installing new meters and raising national awareness. If the benefits I outlined earlier are to materialise, then suppliers and Smart Energy GB must meet the challenge of ensuring consumers are empowered with the right information to take control of their energy use.
This is perhaps Smart Energy GB’s biggest challenge. But it is also the biggest opportunity in many of our lives to make meaningful change to the public’s behaviours - to enable consumers to reduce energy consumption and also reduce our collective carbon footprint.
In conclusion, we all know that this is an ambitious Programme, and with ambition comes challenge.
2016 will be a crucial year for the Programme. You do not achieve anything in any walk of life without hard work, dealing with challenges when they arise, and keeping your eye on the ultimate prize. Whilst I do not underestimate the challenge that lies ahead, I am optimistic and excited about the both the journey and the destination.
The Government is committed to delivering smart metering by the end of 2020. It can be done if we all – Government, suppliers, network operators, Smart Energy GB and its national and grassroots partners – work together.
If we achieve that, then we will have the key to unlocking the future of a Smarter Britain - that’s what consumers will quite rightly demand and that’s what we must deliver.