UK’s £10.9bn smart meter programme could be a’ costly failure’, warns ECCC

Energy and Climate Change Committee report says plans to roll out 53 million smart meters in 30 million homes and business by 2020 are in danger of veering off-track

UK’s £10.9bn smart meter programme could be a’ costly failure’, warns ECCC

Plans to install energy saving smart meters in every UK home and business by 2020 are in danger of veering off-track and could prove to be a costly failure because the project has not been driven forward effectively, the Energy and Climate Change Committee has warned.

In a new report the MPs raise concerns about technical, logistical and public communication issues which have resulted in delays to a national roll-out programme.

Tim Yeo MP, Chair of the Committee, said: "Time is running out on the Government’s plan to install smart meters in each of the UK’s 30 million homes and businesses by 2020. Smart meters could generate more than £17bn in energy savings for the country yet a series of technical and other issues have resulted in delays to the planned roll-out.”

Yeo continued: “This Committee first looked at this programme in 2013, highlighting issues which we urged the Government to address. While some progress has been made since then, it’s not enough. The energy industry told us that it needs the Government to enable industry-wide solutions, rather than the less efficient alternative of letting each energy supplier develop its own solution.

“Without a significant and immediate change to the Government’s present approach which aims to install smart meters in 100% of UK homes and businesses, the programme runs the risk of falling far short of expectations. At worst, it could prove to be a costly failure. So, the Government is at a crossroads on its smart meters policy.

“It can continue with its current approach and risk embarrassment through public disengagement on a flagship energy policy, or it can grip the reins, and steer the energy industry along a more successful path which brings huge benefits for the country."

The Department of Energy and Climate Change (DECC) claimed that significant progress has been made with over one million meters in operation and cost savings already achieved in the back-office infrastructure that will support the smart meter roll out.

Smart meters allow energy suppliers to get remote electricity and gas readings from households and businesses using mobile phone-type signals and wireless technologies. The potential consumer benefits from smart meters include lower energy bills through reduced energy consumption alongside energy efficiency.

The roll-out of smart meters in the UK is due to take place between 2015 and 2020 with an estimated 53 million devices to be installed by energy suppliers in 30 million homes and businesses. DECC estimates that the roll-out of smart meters will cost around £10.9 billion and these costs will be passed onto consumers. However, the cost is expected to be offset by expected savings of £17.1 billion, in part from energy efficiency.

The Committee has reviewed the progress of the roll-out and said it is disappointed by the ongoing policy delivery challenges which the Government has failed to resolve, including:

• Technical communication problems with multiple occupancy and tall buildings which should have been resolved by now
• Compatibility problems between different suppliers and different meters
• A slow start to full engagement with the public on meter installation and long-term use
• A delay by the Government-appointed communications infrastructure company, which has further set back confidence in the programme
• A reluctance to improve transparency by publishing the Major Project Authority’s assessments on the smart meter programme. The energy industry is also calling on Government to do more to address the challenges.

Commenting on the report, Daniel Knight, technical director at Fibaro UK, which uses Z-Wave wireless mesh technology to provide a solution for the monitoring, management, and intelligent automation of living environments, said: “The news of the delay in the Government’s plan to install smart meters in UK buildings within the next five years raises doubt as to their effectiveness.

“There is a common perception that they are the magic cure to energy efficiency issues, but in reality they don’t help any more than telling a consumer how much energy they are using in total; not why, or where, or how. While a consumer can see in real-time that boiling a kettle causes a spike in energy usage, it doesn’t get into the nitty-gritty details or offer a solution to a consumer.

“Smart home technology is a far more powerful option, helping consumers regulate energy usage by actively mitigating the circumstances that lead to wasting energy in the first place (e.g. controlling lights and heating remotely, dimming lights, setting up smart devices to turn it off and save power),” concluded Knight.

You can access the ECCC report here:

See also:
DECC confirms Telefónica and Arqiva for UK smart meter licences

Telefónica and Arqiva scoop £2.1bn UK smart metering contracts



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