Smart Metering Implementation Programme Government Response to the Consultation on draft licence conditions and technical specifications for the roll-out of gas and electricity smart metering equipment Government response to smart metering roll-out consultation April 2012 Department of Energy and Climate Change 3 Whitehall Place London SW1A 2AW Telephone: 0300 068 4000 Website: www.decc.gov.uk © Crown copyright 2012 Copyright in the typographical arrangement and design rests with the Crown. This publication (excluding logos) may be re-used free of charge in any format or medium provided that it is re-used accurately and not used in a misleading context. The material must be acknowledged as crown copyright and the title of the publication specified. This Consultation response can also be found on DECC’s website Published by the Department of Energy and Climate Change. 2 Government response to smart metering roll-out consultation Table of Contents 1. Executive summary .............................................................................................. 5 2. Introduction ........................................................................................................ 12 Overview of Consultation ...................................................................................... 12 Next steps ............................................................................................................. 14 3. Licence conditions ............................................................................................. 17 Completion of the roll-out by a specified date ....................................................... 17 Interoperability licence condition ........................................................................... 19 Proposed operational licence condition ................................................................ 21 Exemptions from the roll-out obligation for Smart-type meters ............................. 23 Exceptions from the roll-out obligation: Current Transformer Meters and larger gas meters ................................................................................................................... 26 SMETS compliance, including retrofitting ............................................................. 28 New developments ............................................................................................... 29 Installing a gas smart metering system before a electricity smart metering system .............................................................................................................................. 30 Providing emergency services .............................................................................. 32 Notice periods before entry into force of new and replacement meter obligations 33 Provision of IHDs .................................................................................................. 34 Enrolment ............................................................................................................. 37 Consequential changes ........................................................................................ 39 4. Technical specifications .................................................................................... 41 Overall approach to developing the SMETS ......................................................... 41 End-to-end messaging and architectures ............................................................. 48 Configuration of communications equipment in premises ..................................... 53 Communications network standards and addressing ........................................... 57 DNO requirements ................................................................................................ 60 Consumer access to consumption data ................................................................ 64 Electricity isolation switch ..................................................................................... 65 In-Home Display (IHD) Functionality ..................................................................... 67 Enduring prepayment interface device ................................................................. 71 Technical Assurance of smart metering equipment and Assurance of the end-to- end systems ......................................................................................................... 72 Security ................................................................................................................. 74 Glossary .................................................................................................................. 78 Annex 1: Electricity licence modifications ........................................................... 82 3 Government response to smart metering roll-out consultation Annex 2: Gas licence modifications ..................................................................... 92 Annex 3: Responses received ............................................................................ 102 Annex 4: Summary of responses to Consultation Questions .......................... 104 Annex 5: Summary of responses to open letters on exemptions .................... 134 Annex 6: Summary of Functional Catalogue Requirements not included in the SMETS .................................................................................................. 141 4 Government response to smart metering roll-out consultation 1. Executive summary 1.1 This document is the Government’s response to its August 2011 statutory Consultation on draft licence conditions and technical specifications for the roll-out of smart metering equipment1. The Consultation sought views on the draft licence modifications that provide the first elements of the regulatory framework for the roll-out, as well as related policy issues. Views were also sought on the Government’s approach to developing the Smart Metering Equipment Technical Specifications (SMETS) to which smart metering systems2 must comply to fulfil the suppliers’ roll-out obligation and on a number of specific design issues. The Government’s response sets out the regulatory framework for the roll-out of smart metering systems and the approach that will be taken on the SMETS, including a number of decisions on specific technical issues. 1.2 The Government has already determined that the roll-out should be completed in 2019; the Consultation explored what specific date in 2019 should be set in the licence conditions. Respondents expressed concern about defining a completion date early in 2019, reflecting the complexity of the roll-out, the time needed to deliver the roll-out in a way that supports benefits realisation, and the impact on delivery if there are delays in delivering key activities of the Smart Metering Programme (Programme). To balance the Government’s desire to deliver the benefits of smart metering for consumers as early as possible against the risks to these benefits if the roll-out is rushed, the Government has set an end-date of 31 December 2019. 1.3 A major focus of the Consultation was the SMETS. Views were invited on the Government’s general approach to developing the SMETS and on the Industry’s Draft Technical Specifications (IDTS) which the Government proposed would be the basis of the SMETS. Attention was drawn by respondents to the extent of the challenge in developing these specifications and support was demonstrated for a phased introduction of the SMETS to avoid roll-out being delayed until all the complex technical issues are resolved, in particular in relation to communication standards for the Home Area Networks (HANs) and Wide Area Networks (WANs). 1.4 The Government believes that it is important that the policy and regulatory framework for the roll-out of smart metering enables industry participants to manage the costs of preparing for the Mass roll-out stage and making the transition to the enduring arrangements in the most efficient way. In 1 Smart Metering Implementation Programme – A consultation on draft licence conditions and technical specifications for the roll-out of gas and electricity smart metering equipment. www.decc.gov.uk/en/content/cms/consultations/cons_smip/cons_smip.aspx 2 ‘Smart Metering Systems’ is the term used in this document to refer in general terms to the collection of individual pieces of smart metering equipment that will be installed in consumer premises in the smart metering roll-out. Smart Metering Systems is a new term introduced in the Roll-out licence conditions (see annexes 1 and 2). 5 Government response to smart metering roll-out consultation recognition of the time it will take to resolve all the technical challenges involved in developing the SMETS, the Government has chosen an evolutionary approach to the development of the SMETS. The first iteration, which accompanies this document, will provide for core functionality and functional interoperability of smart metering systems. This confirms the position set out in the December 2011 revised Programme Delivery Plan3 on the development of the SMETS. The initial version of the SMETS will be made available on the DECC website. 1.5 Although a majority of respondents to the Consultation believed that the roll- out licence conditions as drafted and the associated technical specification for metering equipment would support the Programme’s objectives, the Government has considered whether on its own, the requirement for smart metering to comply with the SMETS would provide the necessary certainty that