Will the Smart Meter Roll-Out be Another Government IT Disaster? By Andrew Warren

Andrew Warren Fears the Government’s Flagship Smart Meter Programme Could be Heading for Trouble

Republished from www.businessgreen.com

Last year, in March and July, the government undertook two public consultations on the Smart Energy Code. With the sole exception of Citizens Advice, nobody else seems to have responded. Perhaps not altogether surprising as these concerned debate around such specialist areas as Repository Test Scenarios, Gas Proxy Functions, the DCCKI Infrastructure Certificate, Non Gateway Interference and the role of the Smart Meter Device Assurance Ltd.

All the time, 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 estimate from earlier experiments in the UK and elsewhere in the world. Whilst 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 two per cent” saving.

Significantly the German government has ruled out mandating any similar programme, entirely on the grounds that their own research has concluded that the net benefits to the German economy will be seriously negative.

A big problem is that the UK 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 This is leading to consumers paying for investment in a system that is already out of date.

Kit that is being installed in homes and businesses as standard is seldom compatible with smartphone apps, despite many consumers expecting to be able to use their phones to monitor usage. As smartphones spread, so the entire in-home display requirement becomes redundant.

Even more basically, whilst it does display consumption in terms of cost as well as the conventional kilowatt hours that existing meters provide, its “smartness” does not even require it to inform anybody about precisely which items in the building are causing the meter to gather speed – thus rendering even short-term behavioural change less likely.

Every gas and electricity supplier is permitted to develop and install their own meters, even though one energy company, EDF, reckons that a national procurement programme would be saving £1.24bn. There is no requirement to provide compatible pre-payment meters. And nothing to stop suppliers removing pre-installed meters when they lose customers – feared to be particularly likely to occur in rented properties, and those occupied by the vulnerable or fuel poor.

Little account has been taken of how 99.25 per cent penetration can occur where key telephony requirements remain unavailable.

In macro-terms, the government is primarily relying upon assumed competition in the gas and electricity supply industries to control costs and deliver benefits.

A large part of Ms Leadsom’s claimed net benefits are dependent upon these suppliers passing on to consumers practically all the enormous system savings they will be making on reading meters, dealing with estimated bills, time-switching and so on. Past experience suggests this may well prove insufficient on its own to protect consumers. Hence the massive, recently concluded, referral of the entire energy market to the Competition and Markets Authority.

Already the various House of Commons oversight committees have raised warnings. In September 2014 the Public Accounts Committee produced a litany of recommendations for change, seemingly few of which have been followed-up. Last year the Energy Select Committee warned that plans to install energy saving smart meters in every UK home and business by 2020 were in danger of ending up a “costly failure.” This is because Departmental civil servants had not been managing the project effectively.

The MPs raised detailed concerns about failures with technical, logistical and public communication issues – each of which have resulted in yet further delays to the much-postponed national roll-out programme. The committee had “inspected the programme’s progress back in 2013, highlighting issues which we urged the Government to address”. Many of these had not been corrected. So “the programme runs the risk of falling far short of expectations”.

The entire smart meters policy is at a “crossroads.” Continuing with the current approach would “risk embarrassment through public disengagement”, turning this “flagship policy into a costly failure.”

The consumer group, Which?, has already called for the complete abandonment of the smart meter roll-out programme. The Institute of Directors has expressed concern that it may end up being yet another government IT programme failure.

If these commentators prevail, then please don’t let this be branded as another failure of an energy saving project to deliver. That will only be a very, very peripheral reason.

Republished from www.businessgreen.com

warrenAndrew Warren is Honorary President of the Association for the Conservation of Energy.  


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