1. An Overview of the Smart Metering Programme in GB

2. Coalition Commitment “We will establish a smart grid and roll out smart meters” The Coalition: our programme for government, May 2010. “ Consumer benefit is at the heart of the government’s smart meter programme” Charles Hendry, April 2012 “The introduction of smart meters nationwide is of course an enormous challenge, representing a vast upgrade of our energy system, but with huge potential benefits for millions of homes and businesses and for Great Britain as a whole.” Baroness Verma, December 2012 “We have the mass roll-out of smart meters. [This is a step] of a Government committed to the green agenda” Prime Minister, 12 September 2012

3. Smart Metering Programme Strategic Context and Benefits Net benefits of £6.7 bn £18.8 bn benefits for a £12.1 bn cost Accurate bills, improved customer service and greater range of tariffs Energy & carbon savings through more informed consumers Enabler of low carbon initiatives and the Smart Grid Enables faster consumer switching (days not weeks) Streamlines industry processes Drives a more competitive energy market More efficient network management In 2010, the Coalition committed to the rollout of Smart Meters This is one of the largest and most complex engineering infrastructure programmes underway in the EU, delivering benefits across the entire energy supply chain Smart meters will sit in the home at the interface between energy supply and demand and will: enable a smarter Greater Britain including facilitating smarter grids, smarter appliances, electric vehicles and new markets in energy services support and enhance energy market competition provide better, more accurate information on energy use and cost to help consumers save energy, money and carbon drive cost savings and efficiencies across the energy system

4. Smart Metering Programme Enabled by Government and led by Industry Government has an important role to play to ensure that: Mass rollout takes place and is complete by 2019 Industry has the right obligations and incentives to deliver the programme in a way which benefits consumers and wider interests such as Smart Grid Suppliers do not exploit power of smart metering to damage competition or consumers The overall system is secure AND data privacy requirements are embedded The overall system is smart AND interoperable across the market, supporting and enhancing competition

5. The Smart Meter Infrastructure… Energy ‘Market’ Communications Service Providers Data Service Provider 30 million Premises (Domestic & Non Domestic) ‘DCC’ Infrastructure Energy Suppliers (c.40 domestic & non domestic) Network Operators (c.20 gas & electricity) Third Parties (eg Energy Service Companies) The Smart Meter ‘Core Infrastructure’ Data & Communications Company Licence Holder

6. …..a complex stakeholder environment Energy ‘Market’ Communications Service Providers Data Service Provider 30 million Premises (Domestic & Non Domestic) Third Parties (eg Energy Service Companies) The Smart Meter ‘Core Infrastructure’ The Wider Stakeholder Environment, including… Consumer Organisations Industry Bodies RegulationMeter & Meter Technology Manufacturers, including Security Public Utilities Access Forum Trade AssociationsEnvironmental Bodies Meter Operators & Financiers Capital Meters Plc ‘DCC’ Infrastructure Energy Suppliers (c.40 domestic & non domestic) Network Operators (c.20 gas & electricity) Energy UK Data & Communications Company Licence Holder

7. The roll-out in GB is ambitious 53 million gas and electricity meters being replaced, covering: 30 million homes and small businesses Within a competitive market framework Domestic consumers will be offered an In- Home Display Energy suppliers will be responsible for installing meters:

8. Key phases of the implementation programme 20142019 2011 Phase 1 Policy Design Phase 2 Foundation Phase 3 Mass Roll-out Establish policy positions Preparations for the Start of mass roll-out Delivery of smart metering

9. We are making good progress against our plans

10. Progress to date End to EndData and communications RegulationsConsumers First version of equipment technical specifications (SMETS) published April 2012 SMETS successfully notified to the EU Consultation on SMETS2 published August 2012 Government response part 1 to SMETS2 published today Launched data and comms services procurement August 2011; Licence application regulations came into force allowing DCC licence competition to launch October 2012 ; First tranche of regulations came into force (covering the roll- out obligation and installation code of practice) Nov 2012 Second tranche of regulations (covering consumer engagement, data access and privacy, monitoring and evaluation) laid in Parliament, Dec 2012 Consumer Engagement Strategy and Privacy and Data Access Framework published Dec 2012

11. The year ahead End to EndData and communications RegulationsConsumers Further developing the SMETS2, inc part 2 of Government response. DCC licence holder and Data and Communication Service Providers to be appointed in mid 2013 Lay regulations on the Smart Energy Code (SEC) Delivering the Consumer Engagement Strategy, including setting up Central Delivery Body (suppliers) June 2013

12. Updating internal IT systems Procuring data services and smart metering equipment Training and recruitment –Back office staff –Meter installers Trialling and testing systems and approaches –Domestic –Non-domestic –Vulnerable and prepayment customers Energy Suppliers’ progress and plans

13. Energy Suppliers’ findings on consumer benefits Supplier research shows that consumers are actively engaging with their in-home displays, eg E.on research shows that 53% of consumers using their display at least once per day. EDF Energy, first:utility, British Gas and E.on seeing consistently high levels of customer satisfaction with smart meter installations