Broadband over Power Line (UK)

The changing regulatory framework for BPL

This is a groundwork posting.
My groundwork postings will tend to be a bit boring and dry but they’re here for people who want to try to look under the hood of the emerging Broadband over Power line industry.

Understanding the political and legislative environment will help explain a very important strand to the convergence of opportunity for BPL. If you’re interested in knowing more, try following the links or I'd be happy to try and answer any questions.


The following is taken from the soon to be enacted European energy Services directive.

“Energy services” is an expression used to denote those services or physical amenities that energy provides to the end user in an integral package, including the technology needed to produce these services. Examples are indoor thermal comfort, lighting comfort, domestic hot water etc, all of which can have quality standards attached to them. Energy end-use services thus require a combination of energy (either commercial energy or energy obtained from the environment via passive means) and energy-using equipment or technology. With energy services, payment for the service is integrated to include a single charge or payment for the energy used and for the technology involved. This payment is usually made directly by the consumer who benefits from the energy service. Such a single charge facilitates comparison of the actual costs of the energy service involved. For example, illumination in a building may consist of a package of services that includes lighting equipment, maintenance and electricity, a package that provides a predetermined level and quality of lux that is billed on the basis of €/m 2 per year. With similar illumination services being offered by different enterprises, end-use efficiency improvements included in and paid for in this way will thus compete with each other to minimise the total cost of the package without reducing the quality or amount of the service provided. Thermal comfort paid in €/m 3 per year is another example of this kind of integration which can lead to greater energy efficiency as well as economic efficiency.”


“The objective of the proposal is to promote energy efficiency and energy services and to develop the markets for these as a means of contributing to environmental protection as well as to the security of energy supply.
This proposal is designed to help remove informational, financial, institutional and other barriers that prevent the realisation of the significant energy savings potential that exists in all the Member States. It does this by laying down requirements in the following areas: improved information; better qualification and accreditation of providers of energy services and energy efficiency; the promotion of financial instruments for energy savings; improved tariff structures; better funding mechanisms; improved energy audits; and improved metering and billing. To ensure the fullest possible implementation of the Directive it also sets out an annual uniform energy savings target, as well as obligations for the public sector to save energy. Moreover, obligations are placed on energy retailers and distributors to provide their customers with energy services and energy efficiency improvements. To measure and report all of these improvements in energy efficiency the Directive also provides for a uniform measurement methodology and for reporting requirements for the Member States. “

The rules are being changed so that we purchase “energy services” rather than separate energy appliances and energy. The directive contains all of the articles needed to stimulate and promote the market in energy services. The funding and targets articles within the energy services directive will mean that it is cheaper to purchase combined energy services than it is to purchase the appliances/technology separately from the energy they use.

This change is being viewed in the political world as the best way to address the dichotomy between the need to save energy and the fact that energy suppliers make their money by selling more energy, not less. It has been reported that by 2030 the European Union will be relying on imports from some of the most unstable parts of the globe for at least 70% of its energy needs, some reports are as high as 90%, the do nothing option has passed.

The directive will be published in the official journal in April or May, from which time member states have two years to apply the directive into national legislation. The UK has led the world in establishing legal and regulatory frameworks to implement the earlier gas and electricity directives by opening up our markets to competition; I expect the same to happen with the energy services directive.

The full European legislative process can be followed here;
http://europa.eu.int/prelex/detail_dossier_real.cfm?CL=en&DosId=187530


The second important development is the UK regulator OFGEM’s consultation on “Domestic Metering Innovation”. The regulatory world is a shadowy place and I don’t really understand why they are rushing this consultation through before publication of the European directive, but they are. What I do know is that the DTI and DEFRA have already decided that smart metering is an important part of their energy efficiency strategy.

http://www.ofgem.gov.uk/temp/ofgem/cache/cmsattach/13745_2006.pdf

These initiatives call for high quality, high-bandwidth two-way communications between appliances, meters, consumers and the utilities industry participants. In my view, the best way to achieve the communications aspect of smart metering is via BPL.

As I mentioned, sorry if this posting is heavy going, I’ll try to look at some of the more interesting commercial opportunities in some of my future posts.

posted by Energy Broadband @ 4:21 AM