Since 1990, more and more companies have been able to benefit from deregulation in the U.K. electricity industry. To take advantage of the general trend in falling energy prices over this period, end-users have had to invest in: half-hourly metering and modems, a telephone line, associated installation and maintenance costs. To make full use of this metering data, a further investment in energy management software has been needed. And, whether or not this investment was made, since 1994 end-users with a peak demand of over 100 kW, have also been faced with separate settlement charges.
For a number of energy and procurement managers these costs, when compared with the potential financial benefits of a half-hourly tariff, have represented an insurmountable barrier to adopting half-hourly metering. However, it is now time to re-evaluate the marketplace and the new opportunities that exist. This does not apply to those sites with above 100 kW demands, as it is mandatory to have half-hourly metering installed, but for those below this historical benchmark and sub-metering.
Until recently few electricity suppliers have made any significant attempts to target the below 100 kW sites with attractive tariffs based on half-hourly metering. However, today a small but growing number of suppliers who have looked at the implications of the New Energy Trading Arrangements (NETA) have recognized the benefits that half-hourly data provides, and are pushing ahead with initiatives to get their customers to adopt this metering. Major business end-users who have begun to take up such opportunities include BT, Shell and Boots.
The cost of CoP5 half-hourly metering has fallen significantly since its introduction in 1994. Certainly, this trend has been accelerated by the real growth in the demand for submetering not only to improve internal process monitoring and measurement, but also as a means to prepare for the introduction of NETA. Of course, those acquiring larger volumes of hardware (rather than the odd meter here and there) will have seen the most dramatic changes in costs. Thus, with the rapid changes in metering technology it has become increasingly worthwhile considering the benefits of leasing rather than purchase. Check it out with a few Meter Operators (Mops).
Another area where new technologies are paving the way for change is in the retrieving of data. Until this year, an exclusive telephone line or radio link for remote data retrieval from half-hourly tariff metering has been mandatory. Typically this has cost around £230pa plus £100 for installation. Today, it is possible to reduce this cost to almost zero by using ‘call line identifier’ (CLI) modems that sit on existing direct telephone lines, (e.g. fax) and divert calls from specific numbers directly to the meter, be they tariff or submeter. Similarly, with the appropriate technology it is possible to retrieve half-hourly data over existing wide area networks. Major players such as BT and Shell are making significant cost savings by using their own networks and also removing modems from their metering equipment.
Not all Mops have in-depth experience with CLI modems and few can offer a truly national service. This last point is important if sites are spread over the country. The cost of maintaining metering equipment can be high if one site is in Cornwall and the other in Aberdeen. The variety of metering types installed will also influence costs. Nevertheless, meters are inherently reliable with relatively small failure rates. It is typically the older technology modems that are the main cause of system failures. In order to reduce maintenance costs, which for some major players have fallen to a few tens of pounds per meter per annum, it is worth discussing options with your Mop. Ideally, linking meters to existing communications networks can negate the need for standard modems altogether.
The prime reason for installing half-hourly metering is the benefit derived by the supplier and end-user from the data. This means that suppliers get their customer’s half-hourly meter data every day, electronically. Typically, most end-users see their data from their supplier several weeks after the month they are billed. For energy management purposes and financial reporting this is far too late and when it comes to procurement, this delay can cause serious problems.
Today, with the use of the Internet or even simple e-mail it is possible to get half-hourly data from all tariff and submeters by the next morning. With minimal additional delay the data can be passed through exception reporting software that will highlight sites that have under or over performed. How else will you mitigate the impact of the carbon levy?
Companies such as IMServ Europe, originally known as UKDCS, and now part of Invensys have been providing such services for several years. Until recently, the company was the industry’s exclusive half-hourly data collector, maintaining meter readings taken from every such meter registered with settlements back to 1994. The cost for this next day data service can be as little as 10 pence per day.
Settlement costs have been something like the “phantom menace” of the half-hourly industry. Originally set at £199 per metering system in 1994, it rose to £565 at its peak and has fallen back to around £350 pa per +100kW metering system still registered under the old trading arrangements. With complete industry deregulation the total cost of settlement will be split between suppliers/generators on the basis of their total energy take and spread across all end-users. Consequently, there will be no set industry figure and sites below 100kW should logically attract lower charges. Ask your account manager how it will work.
What is certain is that there has never been a more appropriate time to consider half-hourly metering.