Changes in the conditions of the procurement contract of smart metering infrastructure

Changes in the conditions of the procurement contract of smart metering infrastructure

Last year Energijos Skirstymo Operatorius (ESO) has signed a procurement contract for smart metering infrastructure with a French company Sagemcom Energy and Telecom SAS. The contract is concluded for a 10-year period and includes the supply of over a million meters, system communication services, installation of smart metering and the support of the entire solution throughout the period of validity of the contract. During the performance of the contract, while designing, certifying meters and information systems as well as in their production process, due to global trends and in the light of new circumstances it became necessary to revise the contract and amend it.

Implementation of the smart metering information system is a complex endeavour, which requires maximum involvement of the supplier’s as well as ESO’s teams from the first phase – analysis, to the last phase – accepting the system.

After the works were initiated, in order to implement the security requirements for the smart metering infrastructure in full and in accordance with the legislation requirements (including future amendments thereof) as well as considering that smart meters’ service life is 18 years, it is necessary to have an opportunity to promptly perform software corrections in the long period. This has led to necessity to add additional hours for the development of smart electricity meters for the entire period of validity of the contract.

It has been assessed that for the last couple of years the electronics industry is facing global shortage of commodities such as copper, steal, plastic and other elements, thus, a significant shortage of electronic devices and their separate components has been recorded.

The COVID-19 pandemic and related restrictions issued by countries as well as global supply chain disruptions, which are mostly affected by Russian invasion of Ukraine, have led to a global industry slowdown and lower production capacity meanwhile the demand for electronic devices and their components in the global market has increased.

The situation has led to an unprecedented global shortage of electronic components and a global price increase. General European industry price index during this time has increased by around 30%. Considering the above, after the negotiations with the supplier, including the need of additional services, the value of the contract concluded on 19 May 2021 for the acquisition of smart metering infrastructure was recalculated, it increased by 13,7% or around EUR 10.5 million.

National Energy Regulatory Council (NERC) in 2019 had coordinated investments for smart metering infrastructure with a total sum reaching EUR 150 million. When conducting the procurement, due to high competition amongst procurement participants, we were able to secure effective offers both in terms of the price and the quality, therefore, the resulting balance allows us to ensure that the total investment sum established by NERC is not exceeded.

The first batch of smart electricity meters for Lithuania will be tested in real conditions in the nearest future, and after additional practical tests are complete, their mass roll-out will begin. Also, the installation, testing and commissioning of information systems necessary to manage meters and their data is nearly complete. Throughout the implementation of the entire programme, the implementation of the highest cyber-security requirements and standards is ensured in order for the systems to receive the data transfered by meters properly and securely.

Smart meters will become an integral part of the network of the entire country, will enable competition in the market, facilitate the market for new services that will benefit all consumers. Smart meters will become a tool which will make personal consumption data easy to access, understand, analyse and help people change their consumption habits.

All relevant information about the smart metering infrastructure project can be found on the website ismaniejiskaitikliai.lt