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UK regulator impressed with Vector's roll-out, writes Fran O'Sullivan

Vector chief executive Simon Mackenzie believes New Zealand can teach the Brits a good deal when it comes to best practice on smart metering.

The Kiwi uptake for smart meters has been brisk since Vector began its own smart meter roll-out in 2008.

On a recent trip, Mackenzie met with the British Department of Energy and regulator, Ofgem.


"We're clearly quite significantly ahead of where they are and our solution has been developed by a market as opposed to a regulated policy objective," Mackenzie notes.

"Their energy department is trying to work through how they get smart meters out into their communities."

In Britain, network companies put meters on the wall, but have a separate entity for communications and data systems and management which resides in an effective joint venture with Government.

"They were really keen to engage with us about our experience in rolling out our smart metering and some of the challenges that we've had with roll-out, communications - the significant management of data and systems," Mackenzie relates.

"They really thought it was quite impressive that we've rolled out the metering without - for want of a better word - intervention."

Investment in renewables is being stepped up to meet climate change targets set by the British Government. Concerns about dependency on gas coming from Russia and Eastern Europe is an issue.

Mackenzie says the competitive process adopted in New Zealand has resulted in the end user cost to the consumers staying the same after the rollout. "Whereas in the UK the kind of rhetoric they're getting back is this is going to significantly increase costs to distributors."

Mackenzie hints at potential commercial opportunities for Vector in Britain where it is looking at becoming an affiliate member of the UK Networks Association. Vector will gain exposure to how networks of size and scale are being developed and the ability to access a major British Government fund (£500 million) to trial special technologies for further developing smart networks.


"The only obligation is they have to share that information with other people who are members of the association," Mackenzie says. "This is hugely beneficial. "

Foreign ownership of networks is an issue. There are questions over whether companies are committed to Britain's economic growth. "One could argue the regulatory regime and this £500 million fund has been largely developed in response to the ownership structure," says Mackenzie. "They are trying to incentivise people to invest in the network because they see they've got the EU climate objectives but also want to transform their networks to much smarter sustainable technologies.

"The trilema is how do they strike the right balance between energy security, energy affordability and sustainability?"

Mackenzie says Vector also visited California to look at the latest technologies to enable the interface between consumer solutions that are becoming more prevalent whether in electrical vehicles or renewables.

He foreshadows a future where there will be much more ability to control how home appliances interface with networks to maintain health, safety, reliability and not to cause unintended consequences like massive peaks in the system.

Vector is liaising with leading companies on this.

"That is something we can implement in our network environment. We have laid a platform of fibre optics around our network.

"And we've got an open IP environment, which is critical to how we get the benefits of convergence."

* Eliminate the need to issue estimated bills

* Remove the requirement for a physical meter read

* Allow remote disconnections and reconnections

* 2008: Vector began installing smart meters

* 2012 (August): 369,394 meters installed; up 50.5 per cent in 12 months

A smart network is an intelligent electricity network that leverages the benefits of digital technology to provide accessible, flexible, reliable and economically sustainable power supplies. That's how Greenlivingpedia defines smart networks, also known as smart grids. Devices such as smart meters, automated switches, electronic sensors and intelligent devices, as well as the communication networks and back office systems are deployed.

Smart meters transmit energy consumption data through a communication network rather than through periodic meter reading. This allows better understanding of energy use and allows new tariff options such as peak, shoulder and off-peak prices for electricity. In the future smart meters may be part of supporting home energy management solutions.