Check against delivery
I’d like to thank Ernst & Young for organising this event and bringing us all together to discuss this important agenda.
Two weeks ago I went to visit and experience for myself a smart meter installation. This experience highlighted to me just how much consumers could benefit from having a Smart Meter, and the importance of the programme we are all working to deliver.
I would like to express my thanks for the efforts and commitment of industry, which have been so significant in the work completed thus far.
So much has been achieved, and we continue to push forward to ensure that industry will be able to take the steps they need for a successful roll-out.
In the few months since I have taken on this ministerial responsibility, we have achieved a number of goals.
- Completed the parliamentary process to enable us to create the central Data Communications Company (DCC)
- Laid the regulations which set out the process for the Data Communications Company licence award.
We will shortly publish a number of smart metering decisions regarding consumer engagement, data privacy and security.
This is another important milestone, and further demonstrates that we are committed to putting the consumer at the heart of the programme.
Smart Meters offer real Benefits
Rising global fossil fuel prices are driving up the cost of household energy bills.
Energy efficiency policies from DECC such as the new Green Deal and Energy Company Obligation will help many consumers save on their energy bills.
By putting consumers in control of their energy use, smart meters enable consumers to adopt behaviour changes to improve energy efficiency and help save money on their energy bills.
Whilst we recognise the roll-out poses some challenges, we believe it will bring about very real and substantial benefits to consumers - which is the heart of the smart meter programme.
By 2019 smart meters together with in-home displays will have been rolled out across the country, giving people easy to understand information in pounds and pence.
Smart meters give consumers near-real time information enabling them to better manage their energy consumption, save money and equally importantly, reduce carbon emissions.
They will help us to meet some of the long-term challenges we face in ensuring an affordable, secure and sustainable energy supply and they put the consumer in control of their energy use.
Smart meters will bring an end to estimated billing. We want consumers to be better informed to be able to switch suppliers, and switching between suppliers will be smoother and faster through this system.
Consumers at the heart of roll-out
The smart meter roll-out will bring about very real and substantial benefits to consumers. This focus on consumers will be evident in our next set of publications.
We will shortly publish new rules for smart meters on privacy, security and how consumers should be engaged.
These will be supported with the latest impact assessment that shows the smart metering programme will secure total net benefits of £7.2 billion over the next 20 years.
Smart meters will allow more convenient ways of topping up payments for pre-paying consumers, such as by phone, cash points or online, which should make pre-payment appeal to a much wider group of customers.
Consumer engagement strategy consultation
We recognise that consumers will only fully realise the benefits of smart meters if they are effectively engaged. Individual suppliers have a key role to play here from the start.
Building the confidence and trust of all consumers, and reaching out to vulnerable or hard to reach groups enabling them to manage consumption and save money, needs consistent and co-ordinated communications.
We know from research that third parties, such as voluntary organisations, local authorities, and housing associations, as well as friends and family, can provide an effective and credible source of information. That is in addition to that given by suppliers or central Government.
We propose that a Central Delivery Body should be established and funded by suppliers to deliver a centralised programme of consumer engagement activities. This will support the engagement suppliers will be doing themselves.
More specifically, we propose the Body will have objectives to:
- build consumer confidence in the installation of smart meters
- build consumer willingness, awareness and understanding of how to use smart meters to manage energy consumption
Consumer engagement also offers the possibility of synergies with other energy policies.
Smart metering will for example support the Green Deal by encouraging choices which increase energy efficiency.
And we are encouraging suppliers to bring together smart meter rollout with the delivery of obligations such as the Affordable Warmth Element of the Energy Company Obligation.
Bringing these together will not only provide efficiency savings but provide a more comprehensive package for low income, vulnerable consumers and those households with a pre-payment meter.
Customer protection and a good experience for consumers at installation visits is crucial.
Installation Code of Practice
30 million homes will receive new smart meters by 2019; a fundamental part of consumers’ experience of smart metering will be the installation visit.
The Code of Practice will ensure consumers get good service, and that they are given the information they need to understand how to use their new meter and in home display, and how this can help them to use their energy more efficiently.
Importantly, vulnerable customers are supported by the code of practice and suppliers recognise that they need to identify and meet their needs.
We have also been clear that all householders should not be subject to unwelcome sales or marketing in their own home.
The licence conditions for the Code will therefore ban any sales during the installation visit. And suppliers must obtain consumers’ permission to talk to them about their products.
Privacy and data access
How consumers are engaged and protected on matters of privacy and data access is an area that has been explored at length by the programme to help ensure roll-out success.
We need to protect the privacy of individuals and make sure they have control over the data recorded by the smart meter.
The principle that has informed our thinking in this area from the start is that consumers will have a choice over who has access to their smart meter data, except where the data is needed to fulfil regulated duties.
Suppliers need access to a certain amount of data for billing and to fulfil statutory requirements or licence obligations. For these purposes, we have proposed rules that suppliers can have access to monthly data without customer consent.
If suppliers wish to access daily data, they may do so but they will have to provide a clear opportunity for the customer to opt out and they cannot use that data for marketing without the customer’s explicit consent.
Beyond this, if suppliers wish to access half-hourly data - for instance, to develop more sophisticated services for consumers - they must obtain explicit consent from the consumer to do so.
We are aware that consumers value the level of information they have access to via smart metering.
Consumers should have a choice about how their data is used, and by whom.
We are requiring that 13 months of data can be stored at the meter itself and that this is accessible to the consumer. Allowing the consumer to control and access their own data even if they have no wish to share it with other parties.
The security of the smart metering system is a top priority for DECC.
In order to ensure the ongoing security of smart meter systems the Government is taking a ‘secure by design’ approach, in which security concerns are considered and addressed at every stage throughout the development lifecycle to give consumers confidence in the up-coming roll-out.
This programme is driving forward at a rapid pace. We all know there are some very challenging time scales ahead of us. But we are all working hard and striving to ensure industry and Government deliver this programme together.
During the remainder of the Foundation stage we will complete a number of key milestones including:
- the establishment of the Central Delivery Body
- the announcement of Government’s decisions on the second version of the Smart Metering Technical Specification
- the establishment of the new central Data & Communications Company and a Smart Energy code governing the relationship between the Data & Communications Company and its service users.
The success of this work, and the programme itself, hinges on those outside Government; the suppliers, service providers and consumer groups, those of you who are actually delivering the rollout, and advising and going in to the homes of consumers.
I am looking forward to working with you further - through Government, industry and consumer groups, we can ensure consumers are able to realise the benefits of this ambitious, beneficial programme.