British Gas will need to replace some of the smart meters installed in homes after the government published new technical requirements for the devices.
It has so far installed around 400,000 smart meters in homes and businesses, but only domestic devices - about half of the installed total - will be affected by the announcement. British Gas declined to say how many of the 200,000 smart meters will need to be replaced.
The main difference in technical specifications is that the new smart meters have to be capable of receiving system upgrades remotely, said a British Gas spokesperson. This was not possible with the older model that British Gas rolled out in the early phases of its smart meter programme, which started in 2010.
The smart meters that the utility company is currently rolling out – a trial of which started towards the end of last year – comply with the new government specifications.
British Gas said that it was not surprised by the government announcement and that it had always expected to replace some of the earlier smart meters by 2019.
"Any suggestion that this has been a bad outcome for British Gas is wide of the mark.
"British Gas is leading the way on smart meters for one very simple reason – so our customers can be the first to benefit from a smarter energy future. At British Gas we are working hard to make sure as many homes and businesses as possible can benefit from smart before the official switchover," said Gearoid Lane, managing director of British Gas New Markets.
The energy firm said that starting the rollout of smart meters early has helped it to become a leader in building robust systems and processes for smart customer service.
It added that it has only been installing smart meters where dumb meters needed to be replaced, when it had the choice to fit in a new dumb meter or a smart meter in its place. This has helped keep costs to the business down, it said.
However, British Gas has significantly scaled back its ambitious smart meter rollout target.
In parent company Centrica's corporate responsibility report in April 2011, it revealed that more than 258,000 smart meters had been rolled out, and that it would be speeding up the programme to meet its target of installing two million smart meters in homes and businesses by the end of this year.
But earlier this year, Centrica said that it was refraining from making a full-scale rollout of smart meters until the government clarified its smart meter plans.
Today a British Gas spokesperson confirmed: “[We are] aiming for around a million by the end of 2012.”
The government is preparing for a mass rollout of smart meters in 2014, and has proposed that 30 million homes and small businesses in the UK will have smart meters by 2019.