Following its extensive investigation into the UK’s energy market, half hourly settlement of both domestic and non-domestic customers has been identified as a key requirement of a new and reformed energy market by the Competition and Markets Authority (CMA). The benefits of smart metering should be easy for businesses to identify, and the Smart Meter Programme’s own economic impact assessment forecasts net financial benefits in the non-domestic sector of around £1.9 billion.
However, according to the recent Energy Insight report from the British Chambers of Commerce (BCC) and British Gas, interest in smart meters among businesses remains staggeringly low. New figures have shown that just 6% of businesses believe promoting the use of smart meters should be a priority for the Government, compared to the 55% who believe that the government should offer additional grants and tax breaks towards to the cost of energy efficiency measures. This lack of enthusiasm for smart meters perhaps points to a lack of understanding from businesses about how the advanced metering technology fits into a larger energy reduction picture, and how meters can provide an invaluable tool for energy management.
A savings opportunity – Smart meters will give all smaller non-domestic consumers the chance to fully engage with, and take control of, their energy use. Improved insight into consumption patterns will help businesses to identify and pursue potential new savings opportunities.
The end of estimated billing – Smart meters will bring an end to estimated billing, meaning businesses will only pay for the energy they use. The increased functionality will also support time-of-use tariffs, and allow businesses to access the benefits this can provide, leading to further cost savings on energy use.
Switching will be easier than ever before – The roll out of smart metering has the potential to boost competition across the energy marketplace, by making it easier and faster to switch supplier. Robust interoperability is essential to support this and ensure government objectives on switching supply are met. The way that this interoperability is most effectively delivered has been subject to much scrutiny of late, thanks to ongoing government consultations on the right of suppliers to opt out of data services provided by Data and Communications Company (DCC). It is expected that the opt-out clause will be removed from current legislation, so that all suppliers will be required to use DCC, unless alternative service providers can be demonstrated to provide a firm plan for an equivalent service. However, the consultation remains open until 27th May 2016. More info.
Whilst it appears that many UK businesses currently fail to see the true value of smart meters, the fact remains that P272 will bring advanced meter technology and half hourly billing to all non-domestic customers within profile classes 05 to 08 by April 2017 . The effects upon your business of the transition to half hourly billing will depend upon an ability to engage with the process, and only those businesses who fully understand the changes will be able to make the most of the new opportunities available, whilst simultaneously avoiding paying too much in the additional non-commodity costs which P272 will necessitate.
Need help – want to find out more about P272 and how to save your business money? Expert advice is available.