THE introduction of smart meters could pave the way for businesses energy users to switch suppliers within 24 hours, according to Ofgem.
In a report examining the potential impact of the roll-out of smart meters across the UK, the energy regulator said that smart meters could make it possible for domestic and small business energy users to switch suppliers on a ‘next day basis’.
This would benefit business electricity and business gas users who were not on fixed-term energy contracts, or those who been rolled over onto expensive “deemed” rates when their fixed contract expired.
The report proposed a range of other benefits that would stem from the scheduled roll-out of smart meters, which provide real-time gas and electricity meter readings remotely. A key feature of the meters is their ability to measure energy use in blocks of as little as half an hour.
All domestic consumers and small business energy customers will have smart meters installed by 2019, while large business will have ‘advanced’ smart meters installed by April 2014.
Ofgem’s report, released this month, examines the long-term implications – both positive and negative – that will flow from the new technology. One of the key benefits could be an easier switching process.
“Consumers’ right to switch their supplier lies at the heart of the competitive retail markets for gas and electricity,” the report says.
“However, the complexity of the processes can lead to delays, errors and costs, which are often borne by consumers. Even when it works well, this process is relatively slow. It has typically taken four to six weeks to switch supplier. These factors can lead to consumer complaints and disengagement with the competitive market.”
It suggests that smart-meters will make it quicker and easier to switch suppliers because it will streamline the current complex system which leads to delays, errors and costs. Because smart meters allow the transmission of immediate real-time meter readings, there will be no need for switching to take up to 6 weeks as it currently does.
The report examines a range of other challenges and benefits that may flow from smart metering, including more business energy users being rewarded for using energy at off-peak times.
Julian Morgan, managing director of the Energy Advice Line, the UK’s leading price comparison and switching service for businesses, said he welcomed any development that made it easier for business energy users to switch suppliers quickly and easily.
“Business owners have long suffered from the delays, errors and general rigmarole involved in switching suppliers, and if smart metering can alleviate these problems, businesses would be significantly better off,” he said.
“The easiest and most cost-effective way for business energy users to reduce their overheads is to change supplier – but under the current system there are many obstacles placed in the way of them doing this. Hopefully smart metering will form part of the solution.”
The Energy Advice Line is the only independent price comparison and switching service in the UK designed exclusively for businesses. Firms can view the five most competitive energy offers from the UK’s leading suppliers online, compare business electricity prices and gas prices against their renewal quotation and switch at the click of a button.
The Energy Advice Line’s expert team can also offer advice on how to switch suppliers, as well as a renewal reminder service to ensure you do not get caught in an expensive business energy rollover contract.
For more information visit www.energyadviceline.org.uk