Slowing smart meter roll-out puts 2020 deadline at risk
The smart meter installation rate is slowing, and with 18 months until the December 2020 deadline, achieving the Smart Meter Programme’s aims now looks very unlikely
The UK’s Smart Meter Programme installation rate slowed by almost a fifth year-on-year during the first three months of 2019, putting the government’s target for every home and small business in the UK to have been offered a smart meter by the end of 2020 at risk of being missed.
New statistics released by the Department for Business, Energy and Industrial Strategy (BEIS) have revealed that from January to the end of March, 1,031,600 smart meters were installed by the large energy suppliers – those defined as having over 250,000 gas or electricity customers, including the likes of British Gas, E.ON, EDF, Npower and SSE. This is a drop of 6.7% compared to the last three months of 2018, and 17% compared to the same period last year.
This means there are now 15.97 million smart meters in domestic properties – 15.32 million owned by large suppliers and 653,000 by small ones – which is a rise of 6.9% on last quarter’s cumulative total.
A further 2.3 million smart meter units are also operating in non-smart or traditional mode, which means either they cannot communicate with the wide area network (WAN) specifically set up for them; that customers have switched to a supplier that cannot operate their specific model due to lack of interoperability; that the meter was installed in traditional mode; or that the smart meter is installed but is yet to be commissioned, i.e. in a new-build property.
At these rates, it would now be virtually impossible for every home and small business property in the UK to receive a smart meter in time for the Smart Meter Programme to hit its targets.
In its report, BEIS said: “Energy suppliers are responsible for maintaining and delivering the installation of smart meters for their customers, and are free to plan the roll-out in a way that suits their business and the needs of their customers, subject to the requirement ot complete the roll-out by the end of 2020.
“As such, energy suppliers proposed approaches to the roll-out vary and take into account factors such as the location of their customer base, installation workforce, and when their customers would need traditional meters replaced on a routine basis,” said the report. “The approaches adopted by energy suppliers may also change as they progress through the roll-out. Fluctuations in the number of smart meters installed each quarter is therefore expected.”
Gillian Guy, chief executive of Citizens Advice, said: “Today’s figures show yet again that the target for everyone to have a smart meter by the end of 2020 is unfeasible.
“The government’s last cost-benefit analysis anticipated that 15 million meters would need to be installed this year. In order to hit that target, suppliers will need to install meters around three times faster than they did in Q1.”
Guy called for the Smart Meter Programme deadline to be extended to 2023, and for BEIS to publish more up-to-date information on the scheme’s costs and benefits. “A rush to install meters to hit the 2020 deadline risks giving customers a poor experience and undermining people’s faith in this important technology,” she said.
Which? head of home products and services Natalie Hitchins blamed the energy suppliers for dragging their heels over installations.
“It is also unacceptable that millions of energy customers have been left lumbered with ‘dumb’ smart meters, especially if they’ve switched to avoid expensive energy tariffs or escape poor customers service,” she said.
“Smart DCC urgently needs to get on with rolling out its fix for first-generation smart meters without further delay and installing second-generation meters more widely must be a priority for all parties,” said Hitchins.
“Customers should benefit from monitoring their energy use and using this information to switch to a better deal – rather than enduring hassle and soaring costs.”
Read more about smart meters
- Energy supplier Npower is using Apple Business Chat to help users through the process of switching onto new smart gas and electricity meters.
- Energy companies may end up spending billions unless they can install smart meters more cheaply.
- An Ofgem report has warned of the difficulties in getting consumers to engage with smart meters.
BEIS said that Smart DCC – the company charged with installing the internet of things (IoT) networks on which smart meters rely, which is ultimately overseen by Capita – had now established a national data communications infrastructure that would allow energy suppliers to begin to install second generation Smets 2 smart meters, which will hopefully eliminate the problem of lack of interoperability between meter estates. Older Smets 1 meters should also be able to be enrolled onto the national network.
BEIS said it remained committed to ensuring every home and small business was offered a smart meter by the end of 2020.
The Smart Meter Programme has already been subject to lengthy delays and cost-overruns. Last year, a report by the cross-bench British Infrastructure Group (BIG) of parliamentarians, chaired by MP Grant Shapps, called for the government to intervene to address the project’s failings.
“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,” said Shapps.
More recently, a National Audit Office (NAO) report warned that the overall cost benefits of the Smart Meter Programme were at risk of being compromised.
“Costs are rising, and timescales slipping, but smart meters can still succeed over time. BEIS has taken most of the decisions that matter on the programme so far. They now need to take responsibility for getting it back on track and protecting the interests of consumers, who will ultimately meet the bills,” said NAO head Amyas Morse.