Data Communications Company (DCC)White paper released examining DCC licence tender challenges

Correla recently published a white paper which examines the progress to date and the upcoming challenges of the next tender of the Data Communications Company (DCC) Smart Meter Communications Licence (DCC licence).

The DCC licence, regulated by Ofgem, allows for the linking of smart meters in homes and small businesses with energy suppliers, network operators, and energy service companies.

Awarded to Capita in 2013, the contract aimed to complete the rollout of 53mn smart meters by 2020.

The report sets out the current state of play for the smart meter rollout, detailing that at the end of 2023, there were almost 35mn smart meters installed in homes and businesses in the UK.

It notes that, according to DESNZ, almost 4mn of these smart meters were not working properly. Correla also outlines wider challenges the DCC faces on the operational challenges of the rollout, explaining that around 25mn homes will require their SMETS 1 meters to be swapped out and replaced with SMETS 2 meters, with communication hubs also required for all SMETS 2 meters for them to continue to work over 4G.

Following analysis of the Ofgem consultation responses and the Smart Energy Code (SEC) modifications, alongside a range of interviews with relevant industry stakeholders, the paper groups the current performance of the DCC:

> Transparency: Users were found to want the DCC to be aligned with them, incentivised and reporting against a set of KPIs that users need the DCC to deliver against.

> Operational performance: Users recorded concerns around the system architecture and operational efficiency, especially in the North. Frequent In-Home Display disconnections and communication hub failures were noted.

> Cost: Users were found to perceive the DCC as not providing value for money, citing imposed costs and non-competitive procurement processes, alongside issues with maintenance outages and defect fixes. It reveals that the most affected are organisations that rely on DCC availability for real-time processes such as Distribution Network Operator network monitoring.

> Governance: Frustration with the composition of the DCC Board and lack of industry representation, transparency, and consumer focus was strongly recorded by users. As a result, users were found to turn to the SEC for operational support, but industry code modification processes are not designed for resolving operational issues.

It revealed that many users have continuously lobbied Ofgem and DESNZ to get support.

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