£11bn UK smart meter programme could be a ‘costly failure’, MPs say

Technical problems, interoperability standards, delayed communications infrastructure and a reluctance to improve transparency across the UK’s smart meter scheme have all contributed to the delay, the report found.

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Government’s ‘disappointing’ £11 billion scheme to install smart meters in every home and business by 2020 is unlikely to materialise and “could prove to be a costly failure", MPs have warned.

Any delay will mean the initiative - implemented to reduce energy bills - will actually cost utility firms and their customers dearly, the energy and climate committee stated in a report released over the weekend.

Technical problems, interoperability standards, delayed communications infrastructure and a reluctance to improve transparency across the UK’s smart meter scheme have all contributed to the delay, the report found.

SSE, an energy firm that supplies electricity and gas to nine million homes, said that it had concerns about increased installation costs, lack of customer engagement and that the 2020 target was unrealistic.

Further, British Gas said that technical issues and a lack of a universal solution, or standard, was hampering the scheme. The utility firm was one of the first to begin installing smart meters. However, after a change in the specification for the devices from the government, it will have to replace some of its 800,000 meters it has already installed by 2020 – at extra cost to customers.  

Jorge Pikunic, managing director of Smart Metering at British Gas said: “What we probably need there is an industry solution. An industry solution will be a lot less expensive, a lot cheaper, than having each supplier going into a building installing their own technology.”

Out-of-date tech ideology

The legal responsibility to install smart meters in every customer’s home by 2020 will mean that more of these out-of-date devices could be implemented to cut costs and reach the quota, the report found. Because of this, the committee added, this will cause longer term interoperability issues when devices will not be able to communicate with each other in the future.

While the use of smartphone apps might be a useful workaround for interoperability issues, utility firms told the committee that they are forced, by law, to provide an in-home display to show energy usage.

Melissa Gander, managing director of in-home Technology at Ovo Energy, said: “The technology is there and we can use it to be able to give customers their data on a smartphone. The challenge is that we are still mandated to provide an in-home display so that cannot enable the smartphone usage.

“Do we give the customer an in-home display and the piece of kit that allows the customer to see the data on a smartphone and have that additional cost? There is the challenge. It is just adding more and more cost to the programme. We want to innovate and we want to be able to give customers their data in the format that best suits them.”

The report concluded: “These policy problems are symptomatic of a national programme that the government has left largely to suppliers and failed to drive forward effectively.”

Communications infrastructure pushed back, again

Just days before the damning report was published, the deadline for the communications network, which will support the smart meters once they are installed and ready to communicate data, has been pushed back from December 2015 to April 2016.

The network is managed by data communications company (DCC), a firm set up by the government especially for the smart meter program.  

Image credit: iStock/Alex Raths