Energy giant outsources smart meter services to Logica

Scottish and Southern Energy (SSE) has outsourced some of its smart metering processes to Logica. The IT services firm will provide the communications between smart meters and SSE, manage the data collected and create pre-payment systems.

Two-way communication capabilities will enable SSE to engage with its customers about their energy consumption.

The UK Smart Metering Implementation Programme (SMIP) aims to help users manage their energy consumption and reduce carbon emissions. The Department of Energy and Climate Change (DECC) has 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. Smart meters are expected to start rolling out to the mass market in 2014.

Tony House, smart programme director, SSE said the outsourcing agreement will allow SSE "to build momentum as part of its preparations for the mandated roll-out of smart meters."

There are significant IT costs associated with the SMIP project. A new company - the Central Data and Communications Company (DCC) - will be set up to manage the data that smart meters send and receive. The DCC will require support from IT and communications service providers. It will collect information from smart meters in homes and send information on to utility companies to enable them to bill accurately.

SMIP is adding momentum to an already anticipated increase in the amount of outsourcing done by utility companies. Ovum recently predicted that a recent spike in outsourcing activity among utility firms will continue as they strive to cut costs.

But there are fears of initial price rises and a lack of evidence on future savings that could de-stabilise the smart metering plans.

The huge IT infrastructure required to make the SMIP effective could raise prices in the short term and turn the public against it.

A survey of 1,000 consumers, commissioned by smart meter technology provider T-Systems and carried out by the Economist Intelligence Unit, revealed antipathy towards the government's plans to roll out smart meters to 30 million homes by 2020. Consumers are more concerned about the financial costs of using smart meters than the environmental costs of inefficient energy use.

Photo credit: Tom Raftery on Flickr.