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Water retail market plots course to a smarter future

About the blog

John Davies
Chief Information Officer, Market Operator Services Limited (MOSL).

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  • Water retail market plots course to smarter future

As water companies in England and Wales prepare investment plans for the next five-year period, the gap between water supply and demand is more finely balanced than ever. Pressures from increasing demand, population growth and climate change mean that the majority of regions in England are now under “serious water stress”.

To help manage demand and reduce leakage, companies need access to timely, accurate consumption data – and that begins with investing in water meters. This may sound simple, but the metering landscape is complex – with ageing meter assets and metering improvement programmes varying by regions.

England’s 23 million households currently consume around 70% of the country’s water supply, but only around half have metered supplies. The remaining 30% of water is consumed by just over a million non-household (NHH) customers, of which just 1% consume half of the NHH market’s total water (in Wales, only customers consuming >50 megalitres are part of the non-household market). This, and the fact that nearly 90% of NHH customers have a metered supply, makes these customers ideal for targeted water efficiency measures.

The NHH market is complex in other ways too. For example, retailers own the relationship with customers, including reading meters and billing customers, whereas wholesalers own the meter and are responsible for maintenance and replacement. This separation of responsibilities creates inefficiencies and makes investment planning more difficult.

England’s 23 million households currently consume around 70% of the country’s water supply, but only around half have metered supplies

While there are differences in metering coverage, both markets could benefit from the introduction of enhanced metering technology, which includes ‘smart’ meters - Advanced Metering Infrastructure (AMI) – and add-on Automatic Meter Reading (AMR) technology that enables traditional ‘dumb’ meters to be read remotely by walking or driving past.

Of the 1.3 m meters in the NHH market, just 1% are ‘smart’ (AMI). A further 24% have a form of AMR, although the lack of standardisation means that there are multiple AMR meter reading technologies in the market, which drives up the cost and complexity for retailers.

Although it’s tempting to assume that ‘smart is the answer’, it is not that simple. Smart meters offer significant benefits, but the costs are substantial, both in terms of the meters - particularly for larger/industrial supplies - and the cost of the network infrastructure.

In practice, it’s likely that the solution will require a combined approach of AMI and AMR technology. Whatever the technology, what matters is that the meter reading data is captured and, importantly, standardised so that it can be stored as accurate and up-to-date data in the market’s central system, known as CMOS.

This is where MOSL, the market operator for the non-household water market can play a key role. Improving the quality and timeliness of consumption data in the non-household market and increasing the number of meter reads is a key priority and is at the core of two of our improvement programmes: Strategic Metering Review and Data Insight.

We are currently pursuing initiatives to help resolve a number of metering challenges, such as defining and reducing the number of ‘hard to read’ meters. We are also facilitating conversations with water companies to explore options to develop industry solutions that will benefit not only the NHH market, but which may benefit households and, importantly, support water efficiency savings.

Key to this is to ensure an open dialogue not only with wholesalers operating in different parts of the country, but between wholesalers and the retailers they work with to ensure that any solutions we develop are future-proofed, standardised and efficient.

We have recently commissioned independent research into the potential business case for the implementation of enhanced metering technology, which companies will be able to use as evidence to support their PR24 and Water Resource Management Plan submissions at this critical time in the market’s evolution.

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