The Department of Energy and Climate Change (DECC) has announced the IT suppliers that will provide the technology to underpin the government’s ambitious Smart Metering Implementation Programme (SMIP).
With a planned 53 million smart meters to be installed in homes and businesses across the UK, the Smart Metering Implementation Plan aims to allow gas and electricity consumption to be monitored to provide information that will help consumers and businesses use energy more efficiently.
There are three services to be set up: the Data and Communications Company (DCC), Data Services Provider (DSP) and Communications Service Providers (CSPs).
There is a single licence for the DCC. Regulated by Ofgem it will be responsible for ensuring an effective service is provided to energy suppliers, network operators and other authorised parties.
Capita, through its Smart DCC subsidiary, has been awarded the DCC contract with an estimated value of £175m over 12 years. It will manage the smart metering service on behalf of users. It will contract and manage the DSP and CSPs.
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The DSP contract has been awarded to CGI with an eight-year contract worth £75m. It will develop and operate the system controlling the movement of messages to and from smart meters.
The CSPs, which provide the communications network that messages travel across, have also been named. They will establish a wide area network connecting the data application with gas and electricity meters in domestic and some non-domestic premises.
Arqiva Smart Metering is the CSP for the North region with a 15-year contract worth £625m
Telefónica UK has been named CSP for the Centre (Midlands, East Anglia and Wales) and South (south of England) regions. The two Telefonica contracts over 15 years are worth £1.5bn.
In May 2011, DECC put out a notice to IT suppliers informing them to be ready to bid for work in its plan to introduce smart meters to UK homes, businesses and public sector organisations. It said it will begin procurement even before DCC is established.
The smart meter project has already proved controversial. Some experts have raised concerns over the economic impact and benefits, the technical infrastructure and the IT project management behind the UK's smart meter programme. But others have defended it as a necessary initiative.