UK smart meter roll out rolls on and on until 2024
Shifting goalposts deadlines, poor planning, unfulfilled promises, no we’re not talking about Brexit, but about the UK’s equally interminable smart meter rollout. A deadline for their installation in every home by 2020 has been postponed by four more years. The government hopes that energy suppliers will now install the technology in at least 85% of homes by 2024.
What are smart meters?
Like traditional meters, smart meters measure electricity or gas use. However, they don’t just record your usage, they are also supposed to send your readings to your supplier automatically.
Government-sponsored PR said they would help reduce energy use, lower bills and cut down on greenhouse gas emissions.
Uploading data to power companies was also to end estimated billing. Customers would be billed for what they actually used, letting them budget better and tackle fuel poverty, with annual savings of around £26 promised.
Smart meters are actually a system rather than a single device. There’s an electricity meter, a gas meter, a transmitter and a display.
Energy providers were required by their licence to provide them to all domestic and small business customers by the end of 2020 at an estimated cost of £11.3bn.
Is the postponement good news or bad news?
Citizens Advice has been among the voices warning that the deadline should be delayed.
Chief Executive Gillian Guy said the postponement was a “common-sense move”.
“It’s been clear for a long time that the 2020 deadline wouldn’t be met and today’s announcement finally recognises that reality,” she said.
“This new deadline gives suppliers time to fix ongoing technical problems and make sure customer service isn’t sidelined as the rollout continues.” Citizens Advice Chief Executive Gillian Guy
She highlighted certain companies “aggressive” pressure to convince customers to fit the meters urgently because of the looming deadline.
Many only offer their cheapest tariffs if customers agree to an installation and some agents even incorrectly threatened fees or fines for anyone not fitting one.
Who’s paying?
Ms Guy also pointed to the budget overrun afflicting the scheme.
Based on the £11.3bn cost, the government had originally predicted a net benefit to the UK of £7.3bn.
According to the latest analysis that has dropped to £6bn. With costs continuing to increase it remains to be seen what the final figure will be.
The government estimated that households would save £47 a year, by 2030. However, this saving was calculated in light of the original estimated £11.3bn cost and has been repeatedly rounded down. The projected price tag has now increased to £13bn.
A highly critical report released by the National Audit Office last year estimated that British customers might be looking at a £500m increase on their energy bills due to repeated problems.
This is despite the government promising the consumer would not foot the bill for its smart meter boondoggle. That report also estimated the saving per household would be £11 a year by 2020, or in other words a whopping 21p per week off your energy bill.
“It’s also apparent that the cost of the rollout is escalating, and the public are picking up the tab through their energy bills,” Gillian Guy from Citizens Advice said.
“People will still benefit in the long run, but today’s cost-benefit analysis shows focusing on speed hasn’t worked.”
The British Infrastructure Group, a cross-party body focused on developing UK infrastructure anticipated this in a 2018 report.
"Although the entire programme has been funded by customers through higher energy bills, unlike energy suppliers themselves, they are not presently guaranteed to see the majority of the savings that do materialise,”
What progress has actually been made?
The latest figures available show that in June 2019 only 15m smart meters had been installed, a long way from the 53m target.
In fact, according to figures from the Department for Business, Energy and Industrial Strategy, the number of domestic smart meters installed between April and June actually fell by 2.2% compared to the period from January to March.
Only two million of the rolled out 15 million meters are second generation SMETS2 systems. The other 13m are outdated, mostly SMETS1, which suffer many problems and lose their “smart” capabilities if customers decide to switch supplier.
Some customers were still being offered them as recently as March this year, despite a 15th March cut off for the installation of obsolete devices.
At least 10% of smart meters are unable to transmit data, meaning customers have to report their readings themselves.
There is an upgrade of SMETS1 systems in progress to allow customers to keep the devices’ smart functions when changing suppliers. However, in many areas, especially in the countryside, technological limitations mean smart meter capabilities will be degraded, negatively affecting customer experience.
How does the UK compare?
A 2014 EU report looked at individual analyses of smart meters by member states. It found that only four countries, the UK, Romania, the Netherlands and Italy, predicted a smart meter programme would provide a net benefit. Eight countries, including Germany, decided the costs would not justify any potential benefits.
Many governments have thus decided to let nature take its course and allow the adoption of smart meters to happen gradually as old equipment fails and is replaced or as new homes are built.
The UK public has been subjected to a steady drumbeat of pro-smart meter PR over the last decade or so.
The boring box under the stairs that no-one looked at was reinvented as a must-have lifestyle accessory that no modern home could do without.
In the cold light of 2019, the UK obsession seems rather strange.
The promised financial savings do not amount to much, at a mere 21p a week. The ongoing SMETS1 not-so-smart-meter debacle makes many people’s lives more difficult instead of easier.
The UK government attitude to smart meters seems to be that customers can dread them, run from them, but smart meters are going to arrive all the same.