Isra-Mart srl : British Gas beefs up smart meter clout with AlertMe investment

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The UK's energy industry is continuing to quietly lay the groundwork for the universal roll out of smart meter technology, signing two major deals this week designed to support the installation of domestic real-time energy meters.

Smart meter specialist AlertMe announced today that British Gas has joined its latest £15m funding round and has signed a commercial deal with the company worth over £20m that will see it provide the energy giant's customers with its home energy management products and services.

Under the terms of the deal, British Gas has shelled out £5.7m for a 15.96 per cent stake in AlertMe. The energy giant joins existing investors Good Energies, Index Ventures, SET Venture Partners and VantagePoint Venture Partners in the company's second funding round and will also now take a place on the board.

AlertMe said the fresh funding would allow it to continue to expand its channel to market in the UK, Europe and the US, while also extending its portfolio of smart meter and online energy management technologies.

The deal will also underline British Gas' position as arguably the leading British energy firm in the smart meter space. The company has pledged to install smart meters for two million of its customers by 2012 and, earlier this year, inked a major deal with smart meter manufacturer Landis+Gyr, believed to be worth around £200m, to support the roll out.

Phil Bentley, managing director at British Gas, said the addition of AlertMe's product portfolio to the company's range would further strengthen its smart meter offering to customers. "AlertMe’s innovative product portfolio is a great addition to British Gas’ current service offering, and will provide our customers with a range of new, easy-to-use tools to reduce their energy consumption and cut their fuel bills," he said.

The news comes just a day after OnStream, the metering subsidiary of National Grid, announced that it has signed a £2.4m smart metering contract with Logica that will see the IT services firm provide communication, data and pre-payment services for a minimum of 26,000 residential smart meters in Great Britain over the next five years.

Under the terms of the deal, OnStream will install and maintain the smart meters, while Logica will provide the supporting communications infrastructure.

The move will strengthen Logica's position as one of the leading providers of infrastructure services to smart meter projects, with the company claiming that it is now supporting installations in 15,000 homes a month, giving it a market share of over 75 per cent.

The two deals are the latest in a series of moves by British energy firms as they prepare to roll out smart meters capable of providing customers with real-time information on their energy use to every home and small business in the country.

The government is expected to finalise the specifications for the meters next year and has set a provisional target of completing the rollout by 2020.

However, energy minister Charles Hendry recently signaled he would like to see the deadline for the rollout moved forward to 2018 – a decision that would require the industry to install 85,000 smart meters a week every week between 2013 and 2018.