Smart meters are at the centre of Ofgem’s long-term vision for the retail energy market according to Rachel Fletcher, the regulator’s Interim Senior Partner for Markets.
Speaking at a seminar held by the World Energy Council’s UK group and the Energy Institute yesterday, Mrs Fletcher said whilst the Retail Market Review (RMR) would go some way towards engaging energy consumers, Ofgem needed to look beyond its implementation.
She said: “Smart metering could lead to accurate billing, could lead to regular information about a customer’s consumption through a visual display unit… and this could create more engagement and trust.
“On the back of smart metering we could have faster more accurate switching, taking away a barrier… and lay the foundations for more innovative and interesting products, for example around demand side response.”
Angela Knight, Chief Executive of Energy UK agreed smart meters could help win back customers but added: “I’ll only become engaged if it’s worth my while. I will only become engaged, if being engaged I pay less for my central heating, I pay less for my electricity and I’m still warm and the tumble dryer still works. That’s how I want to be sold a smart meter.”
Mrs Fletcher was keen stress the rollout needs to be handled correctly, citing the example of countries which had seen resistance to the new gadgets because of fears over personal data.
She said questions also need to be asked about how the meters will be used: “What kind of information should consumers get and through what medium should they get it? How do we assist consumers in making smart choices when in effect there is a new dimension to that choice, potentially their own consumption profile to take into account?”
Highlighting a potential conflict between the RMR and the successful use of the meters she added: “We also do need to ask … is it right that we limit the number of tariffs we offer in a world where we’re looking to see rapid innovation and the creation of new products.”
Mrs Fletcher suggested the four core tariffs might be reconsidered in 2017 when the RMR is due to be looked at again by Ofgem.
A recent report released DECC found the public had a lukewarm reaction to smart meters.