Capita Wins £135M Extension On Much-delayed UK Smart Meter Rollout

The poster child of UK outsourcing, Capita, has won a two-year extension to its license to manage the delivery of the UK's smart meter secure communications platform, a system dogged by delays.

The UK-based outsourcing and IT services company won an extension to its Data Communications Company (DCC) Licence in a deal worth up to £135 million ($180 million). DCC is set to continue to operate the secure platform supporting the UK's smart meter rollout until September 2027. It first began work on the project in 2013.

Last year, MPs called for the UK government to plan the replacement of millions of smart meters that will be defunct when 2G and 3G mobile networks in Britain are switched off in 2033. The cross-party Public Accounts Committee (PAC) report also pointed to multiple deadlines missed, along with projected costs of £13.9 billion for the scheme (c $17 billion).

In June 2023, the National Audit Office (NAO) found that as of March 2023, energy companies had made 57 percent of meters in homes and businesses "smart" (roughly 32.4 million out of a potential install base of 57.1 million) four years after the planned completion deadline. Of these devices, around 9 percent were not functioning properly.

The public spending watchdog also found that indicated savings from smart meters equated to £56 annually per household, a little less than £5 ($6.60) each month.

Back in 2012, the UK government created a legal obligation for energy suppliers to ensure they completed the rollout of smart meters by the end of 2019. Subsequently, the government pushed back the deadline three times, first to the end of 2020, then to 2024, and then to 2025. Back in February 2023, the government launched a consultation on plans to have smart meters installed in 80 percent of homes and 73 percent of small businesses by the end of 2025.

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Smart DCC Limited, a wholly owned but non-consolidated subsidiary within the Capita Public Service division, has been awarded the license by the UK government to build and manage the central network for smart metering across Britain since 2013. Regulated by Ofgem, the Capita unit is also responsible for operating the secure platform, which connects 53 million smart meters to energy suppliers, distribution network operators, and other authorized third parties, such as SaaS providers.

In a pre-canned statement, Capita Public Service CEO Richard Holroyd said: "We are exceptionally proud of the central role Capita plays in enabling the technological transformation of the UK's energy system.

"We will continue to leverage deep technical expertise and regulatory knowledge to deliver smooth migration to smart meters, helping UK consumers to become more energy aware as well as helping them manage their costs," he added. ®