An important milestone in the UK’s rollout of smart metering has been reached with the announcement by the Department of Energy and Climate Change that it has selected Capita, CGI IT UK (CGI), Arqiva, Telefónica and Gemserv Limited (Gemserv) as preferred bidders for contracts in the rollout process. These are in effect the companies that the government wants to run various aspects of the new smart metering regime.

Outsourcing company Capita has been named as the preferred bidder for contract for performing the role of Data and Communications Company (DCC) under the smart metering framework. The DCC would be responsible for operating the data and communications hub that sits at the heart of the smart metering system. If a final contract is signed between the DECC and Capita, Capita would be expected to perform the role of DCC licensee for 12 years and could earn approximately £175 million for doing so.

"Managing the national rollout programme is a huge logistical and technical challenge but Capita’s scale and pedigree in achieving large transformation projects will help to ensure that this programme meets its milestones in a cost efficient manner," Capita chief executive Paul Pindar said in a statement.

CGI has been selected as preferred bidder for the role of Data Service Provider. It would be responsible for developing and operating the system that would control the movement of information to and from smart meters, DECC said. The contract is for eight years and is worth approximately £75m.

Arqiva is to be Communications Service Provider in the north of England and Scotland. The 15 year contract would be worth approximately £625m to Arqiva. The corresponding contractor for the Midlands, East Anglia and Wales, as well as in the South of England area, is Telefónica. DECC said that the prospective contracts would span 15 years and be worth approximately £1.5 billion to the company.

DECC also announced that Gemserv is its preferred bidder for the contract to become the Smart Energy Code Administrator and Secretariat. That role involves undertaking day-to-day governance activities in relation to the Smart Energy Code, which will establish the rules on smart metering which operators, such as energy suppliers, will have to adhere to. The contract for the Smart Energy Code Administrator and Secretariat role is worth approximately £10m and would span four years.