Replacing all current meters in the UK by the end of 2020 is expected to cost £8.11bn under the Government’s preferred plan, with utility companies paying upfront but able to pass on the charge. So the mandate presents an enormous and valuable opportunity for providers that are able to address it. A key challenge is the need to reach 100% coverage and a variety of service providers are looking at ways to do that. Use of wireless technology is at the heart of many.
Among the many organisations relishing the opportunity is SmartReach, a partnership between BT, Arqiva and Detica that launched in October 2010. ‘The Government’s 2008 mandate is at the heart of this, but it is incredibly complex to deliver and will impact on regulators of the energy and telecoms industries,’ says Jo Wright, VP of smart meters and grids at BT Global Services. ‘There are also very tight deadlines – the drop dead deadline is 2020 so the timelines are very aggressive.’
‘Meeting 100% coverage is the challenge,’ adds Wright. ‘The closest you can get to that is a nationwide infrastructure that delivers television. BT can reach 70% of the population but the final 30% is really difficult.’
For that reason, Arqiva is to provide SmartReach’s long range radio solution. Alastair Davidson, director of strategy, marketing and business development at the company, explains: ‘We can rise to the 100% challenge and re-use infrastructure that is already in place,’ he says. ‘The technology deployed is long range radio and the option is to transmit directly to meters or to a hub in the home. Direct to the meter means that gas providers can go independently of electrical providers or they could have just one radio solution.
‘Low frequencies cover wider areas and the operating licence we have is at 412MHz, which is about half the lowest frequency of a mobile [cellular] operator,’ he adds. ‘We have that spectrum licenced and it is not shared with anybody else. It offers better in-building penetration and we believe we can hit 70% of the market within 12 months of a decision to go ahead.’
The rationale for joining together as SmartReach is clear. ‘Ofgem [the UK Government energy regulator] doesn’t need 200 organisations being smart from the wings,’ says Wright.
‘We wanted to bring an organisation with a single voice and that’s what SmartReach is about – providing a space of trusted brands that can advise.’
Wright also sees a danger of competing organisations rushing in and ultimately failing to build total nationwide coverage in an economically viable way. ‘We see a danger of people rushing to get us to 70-75% [coverage] but the remaining 25% isn’t placed conveniently west of Swansea or north of Edinburgh, it is scattered across the country. There’s a danger of rushing to 70% and then finding you can’t stack up the economics for the remaining 30%.’
Nevertheless, others are entering the fray and believe they have much to add. Cable & Wireless Worldwide, for example, has recently announced its own partnership with US smart metering specialist Current Group.
‘We believe that smart metering is likely to be cellular or radio-led, partly because of the time constraints we’re all under,’ says Amy Cooke, strategic business development director responsible for smart utilities at Cable & Wireless Worldwide. ‘Our view is that this is a big opportunity for lots of people and there are huge challenges around timescales rather than technology.’
That’s a view that Davidson at Arqiva certainly agrees with. ‘There is optimised technology that has already been designed for the meters that, for example, has a guaranteed battery life of 15 years,’ he says. ‘Dedicated infrastructure is also important for smart grids because there will be increasing usage of metered energy for things like charging cars and microgeneration [returning power to the grid]. There will be six million smart grid end points – not just the 600,000 that exist today for the network to support reliably.’
Reliability as usage scales up is one issue. Security is another, and in the minds of many consumers alarm bells still ring when it comes to wireless networks. Richard Watson, director of the commercial client group at Detica rejects that notion and says SmartReach’s approach is to design its blueprint with security taken into account from the ground up. ‘We understand the implications of security within the smart grid concept,’ he says. ‘We’re talking about energy consumption of data in 26 million homes that could become vulnerable to cyber attack or fraud. Detica’s role is to mitigate those risks.’
Those are substantial risks. A similar programme in the Netherlands has had to be revised from mandated to optional because of privacy breaches. ‘We believe security must be built-in from the start,’ affirms Watson.
Partnerships among organisations from meter makers to telecoms operators will be critical to ensure the success of the Government’s plan, although Wright is reluctant to be drawn on how the scope of SmartReach may change as the market develops. ‘We certainly see ourselves partnering with others,’ she says, ‘but whether we need to embrace them within SmartReach remains open. In part it will come down to how the Government chooses to procure things. It is possible the Government will choose to split this by carriers of data communications, for example.’
Cooke also sees that need: ‘Collaboration is the way to get this done,’ she confirms. ‘We think this will be about a broad and possibly looser set of partnerships. We don’t believe we will get to 100% of the population with a single proposition and a single provider. My view is that there will be multiple data and communications contracts but wireless will be the way forward. If you look at the evolution of the cellular market over the last ten years, it has proven itself to be able to scale and deal with massive growth. We have relationships with wireless operators in all their different forms and are a niche MVNO with a mobile core of our own [to bring to this.]’
For Wright, SmartReach’s approach is focused on accelerating deployment. ‘We are dedicated to coming together to deliver secure end-to-end communications. That’s very deliberate. We think we understand the nuances of Great Britain’s need and we are focused exclusively on the needs of Great Britain,’ she adds.
‘We have the experience of managing regulated infrastructure and we believe this needs to be classed as critical national infrastructure.’