The roll-out of smart meters is at risk of going over budget and past its deadline and must be reviewed immediately, a group of MPs and peers has said.
The £11 billion project to place 53 million of the devices in 30 million homes and small businesses by 2020 has been “plagued by repeated delays and cost increases”, the head of the British Infrastructure Group of Parliamentarians (BIG) said.
The group also warned of high numbers of the devices “going dumb” after installation due to problems caused by switching provider or mobile data coverage.
The Department for Business, Energy and Industrial Strategy (BEIS) project is already being investigated for a third time by the National Audit Office (NAO), the public spending watchdog.
In a report backed by 93 parliamentarians, the BIG said suppliers were “almost certain” to miss the 2020 roll-out deadline and its benefits were “likely to be slashed even further”.
“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,” said the group’s chairman, Conservative MP Grant Shapps.
“This report… calls on the UK government to immediately review the progress of roll-out, and intervene to tackle its points of failure and risk.”
The report referred to a 2016 paper by the BEIS that said the expected saving on an annual dual fuel bill in 2020 has fallen from £26 to £11.14.
Meanwhile, costs are increasing, with installation costing £1 billion more than planned, threatening to eventually outstrip the £16.7 billion gross benefit the project was supposed to deliver.
The BIG said Government predictions that consumers would see savings of £300 million in 2020, rising annually after that, were “inflated”, “outdated” and “based on a number of questionable assumptions of personal, industry and environmental savings”.
Groundwork for the project began under Labour in 2008 and had been billed as having no downsides, with the technology helping consumers to reduce energy use and suppliers manage demand more efficiently.
In theory this would cut costs to suppliers and reduce consumer bills while being better for the environment.
However, suppliers have fallen behind schedule, with just over 11 million smart meters reported to have been operational by March 2018.
That leaves three years to fit more than 40 million by the 2020 deadline, equalling nearly 1.3 million a month. By April 2018 large suppliers were only managing to install around 420,000 a month.
The BIG also warned that suppliers were still rolling out “obsolete” first generation smart meters, which were supposed to have been succeeded by November 2016.
Meanwhile, more than half of the smart meters “go dumb” when a consumer switches provider – around 500,000 a year.
Poor mobile data signal in some areas can also cause the meters to “go dumb”, the group said.
The report says: “BIG fully supports the rationale behind the energy smart meter roll-out, and the goals it seeks to achieve.
“Without urgent action, however, it believes the roll-out could become yet another large-scale public infrastructure project delivered well over time and budget, and which fails to provide the expected consumer benefits.”
Robert Cheesewright from Smart Energy GB, the independent firm publicising the rollout, said the introduction of smart meters is a “vital investment for Great Britain, leading to savings that will outweigh the costs by billions of pounds”.
“The Government and Ofgem have been clear that they expect energy suppliers to pass these savings on to customers,” he said.
“The alternative to smart meters is an expensive and outdated analogue system with customers facing the uncertainty of estimated and inaccurate energy bills.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel