Delays, cost increases and increasingly obsolete technology continue to plague the national roll-out of energy smart meters around the UK, and the government should intervene to address these failings, according to a report issued by a cross-bench group of MPs and Lords.
The report, Not so Smart, was produced by the British Infrastructure Group of Parliamentarians (BIG), a body dedicated to “championing better infrastructure across the UK”.
The group, chaired by MP Grant Shapps, said the £11bn roll-out of 53 million smart meters to 30 million homes and small businesses was plagued with problems, and suppliers were now almost certain to miss the 2020 deadline for completion, which means that the programme’s benefits – such as more efficient energy consumption and therefore lower bills – were likely to be slashed still further.
Also, they said, because the programme has so far been funded through higher energy bills, consumers are not guaranteed to see most of the savings that do materialise.
“The roll-out is at serious risk of becoming yet another large-scale public infrastructure project delivered well over time and budget, and which fails to provide energy customers with a meaningful return on their investment,” wrote Shapps in the report’s preamble.
“Despite this, energy smart meters retain the ability to provide benefits for all connected parties, and are an important facilitator for the transition towards a smart grid. It is therefore in the core interest of both the government and industry, as well as energy customers, to see that the roll-out succeeds.”
The smart meter programme, which started out under the purview of the Department for Energy and Climate Change (DECC) but switched to the Department for Business, Energy and Industrial Strategy (DEIS) after the Conservatives abolished DECC, has been heavily criticised many times during its troubled lifetime.
As far back as 2013, the whole project was shifted back a year because of delays in procuring the communications network needed to run it. By 2015, the project was deemed to be in danger of veering dangerously off-track due to logistical, technical and public awareness issues, and in a damning report, the Institute of Directors called for it to be “halted, altered or scrapped”.
In September 2016, the Science and Technology Select Committee accused the government of mishandling the roll-out and overstating the potential cost savings for consumers, and just two months later, BEIS was forced to admit that the gross benefit of the scheme was likely to be more than £400m less than previously thought, while costs spiralled out of control.
The BIG report said many of these issues still persist, and as a result it believes that not only will the 2020 target be missed, but there is now further doubt over whether the programme will deliver any meaningful returns for consumers.
In particular, it focuses on the fact that obsolete first-generation meters, which were supposed to be phased out in November 2016, are still being installed, and that second-generation meters, which were supposed to start being rolled out two years ago in time for the November 2016 deadline, are only now beginning to be deployed in earnest. In January 2018, BEIS minister Claire Perry admitted that only 450 of the meters were connected to the network, and most of those were in test environments, with just 80 live in homes.
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BIG also pointed out that most of the current installed base of meters are not interoperable across suppliers. Of the million or so customers with a smart meter who switch provider every year, more than half end up with a meter that has lost its smart features. A further concern is that new suppliers often replace meters that still work when there is no real need to.
The group identified further problems, including meters that rely on existing mobile networks to run being subject to widespread issues around mobile not-spots, which essentially render them useless, and problems with a lack of supplier installation capacity slowing things down.
Turning to costs, the report noted the delays and cost increases, and said the latest cost-benefit calculations are outdated and based on questionable assumptions. On the regulatory side, it accused the government of not doing enough to get suppliers to actually pass savings on to customers in reduced bills, and suppliers of using scare tactics, such as telling consumers that smart meters are compulsory, or their current meters are unsafe, to bump up the numbers.
The group urged the government to take urgent steps to review the timetable and economic case for smart meters, and outline updated, costed scenarios for the likely event that the roll-out is still going strong as late as 2022.
It said the government should also do more to enhance consumer protections and force suppliers to pass cost savings on, and use the data to recommend cheaper tariffs.
On the technological side, it said BEIS and Ofgem should take steps to fast-track the roll-out of second-generation meters, and to give users access to a unified data control point where they can see who is accessing their smart meter data and why – something that is not currently possible.