Smart water metering – making the right decisions

Most of the England and Wales water companies are planning for significant investment in smart water metering in their draft business plans, which are now with Ofwat for review. The regulator will decide which investment programmes to support and the efficient cost allowance for these programmes.
Arqiva is a technology and managed communications service provider rolling out smart water metering in the UK. They have asked Frontier Economics and Artesia to produce a short paper that evaluates the risks and opportunities around these important decisions.
These investment plans are vital to meet the ambitious targets for reducing water demand in the face of climate change and population growth, with government having set 2038 targets of 37% leakage reduction, consumption reduction to 122 litres per person per day (from the current level of 145 litres) and a 9% reduction in non-domestic consumption.
There are a range of smart metering solutions however, there is currently no defined smart metering standard in the water sector, which means there is no common definition for the performance of a smart water meter. As a result, less functional smart meters will only deliver 50-67 percent of the benefits of the highest performing solution.
This means that Ofwat will need to be consistent in the assessment of costs and benefits for different smart meter solutions, and take account of the role smart metering plays in delivering water efficiency programmes, supporting vulnerable customers and providing valuable data to the wider industry.
Technological lock-in means that water companies should consider whether the smart metering solutions selected in AMP8 are able to deliver the expected benefits over the next 15-20 years, can adapt to future uncertainties and support longer-term regulatory expectations. Defining expected levels of performance for smart meter solutions in the context of adaptive planning would be helpful and bringing customers along the smart metering journey, will be critical.