Andrew Warren sees a smart meter dilemma
The Smart Metering Implementation Programme requires energy suppliers to replace 53m meters in 30m homes and small businesses with “smart” electricity and gas meters by 2020. All costs of the exercise are being borne by consumers via their energy bills. To date, around 2m have been installed.
The overall programme costs have crept up, from an initial £5bn, to the current official £10.9bn, towards a (very possible) £14bn.
Why has this been mandated? Back in 2008, with Ed Miliband as the energy secretary, the then-Government introduced this policy, beginning in 2012 and concluding by 2020, for several practical business reasons. Each remains very beneficial for energy retailers.
For a start, no more visits by meter readers: such people would become redundant. As would 30 per cent of those employed in energy company call centres: that is the proportion dealing with queries regarding estimated bills. Plus reductions in theft from tampering. And better payment management. All considerations pertinent to today’s market.
These are genuine rational savings, that should improve the gas or electricity suppliers’ bottom-lines. Certainly, practically all discussions on the protocols being laboriously developed with Government are heavily dominated by just two interests: the energy suppliers, and (very understandably) the meter manufacturers.
Government Ministers have continued to reiterate the energy-saving benefits to consumers of these new meters. As other parts of (particularly residential) buildings-oriented programmes have been dismantled, so the rhetoric on the energy savings to consumers from smart meters is hyped up. Emblematic was the continuingly unsuccessful efforts of the energy efficiency minister Lord Bourne, appearing before the Commons energy select committee last month, to invite questions on the virtues of the programme regarding reducing overall consumption. Similarly, Andrea Leadsom, his Minister of State, is claiming that by 2030 smart meters will be showing a net benefit of an astonishing £6.2bn.
The problem is that there is very little evidence to support this from earlier experiments in the UK and elsewhere in the world. While there may well be a short-term impact, this swiftly fades. Even the Smart Meter programme managers claim to be anticipating no more than an “up to 2 per cent” saving. A big problem is that the Government has got itself locked into mandating existing technologies for smart meters, when technologies are changing so fast. This is leading to consumers paying for investment in a system that is already out of date.
To read the full article, see the latest January edition of EiBI by registering for free here.
