When discussing utilities, water is often either forgotten about or granted a mention towards the tail-end of a conversation.
With a drought declared across eight areas of England and heatwaves dominating the news, water has been moved to the forefront of the conversation. So much so, that the Chairman of the National Infrastructure Commission has urged the deployment of advanced metering infrastructure (AMI) within the water utility industry to allow people to take control of our water consumption whilst increasing efficiency and delivering sufficient demand reduction to enhance drought resilience.
What does AMI mean for the industry?
AMI’s are undoubtedly representative of a pivotal change in the industry. In May, a report published by Frontier Economics and Artesia, revealed that AMI can deliver up to £2.2bn net benefit across England and Wales which is six times that of alternative, ‘drive-by’ solutions. Smart metering eliminates the manual process of sharing readings with suppliers and allows for much closer monitoring of consumption.
Why is it beneficial to have accurate data?
The ability to access accurate data is key in tackling inefficient water usage. It is not possible to manage and reduce consumption for something if you don’t have the correct measurements in the first place. Smart meters remove any guess work or inaccuracies, in turn allowing people and businesses alike to quickly track energy usage, at the same time as holding themselves accountable. They currently make up 31% of meters in the UK and that figure is expected to increase. If we were to see a national rollout of smart water meters, it would be possible to measure the benefits of water efficiency interventions to inform the industry on what approach is best. In the absence of reliable data, it is difficult to national benchmark progress or devise effective strategies.
Why else are smart meters beneficial?
Not only can you see how much energy is used, but you can see where it is used. Smart metering allows you to see how much energy is being used by a particular appliance, allowing people and businesses alike to see which appliances are the most energy efficient. Better energy habits will in most cases mean cheaper energy bills in the long run and in turn is likely to cut down CO2 emissions, helping many businesses meet their net zero targets. To encourage more people to switch to smart meters, many energy suppliers are offering exclusive discounts and cheaper tariffs with smart meters. As people don’t need to take a final reading, switching suppliers will be easier.
The future of AMI?
In spite of the undeniable potential that AMI holds for the water industry, there are a number of critical barriers impeding its widespread deployment; the most significant being funding. Unfortunately, the current price caps are not sufficient for organisations such as Everflow to provide smart meters to customers alone. While the Chairman of NIC advocated for an increase in customer bills to cover AMI, in the current climate a further increase in utility bills is not a beneficial option for many. Despite the clear benefits that AMI will bring, many wholesalers are not incentivised to enter this market and drive down costs.
Whilst disappointing, it is becoming increasingly clear that, much like the energy market, there is a need for greater Government investment to ensure the costs of AMI do not unduly fall on any one stakeholder alone. Ultimately, water companies and the water sector face huge challenges over the coming decades if Water UK’s 2050 vision and the Government’s environmental targets are to be achieved. With a comprehensive national strategy and funding as well as regulatory support, AMI represents a tangible way for the UK to meet these targets.