MPs have scolded Ofgem for failing to punish energy suppliers that are not meeting smart meter obligations. Meanwhile, the business and energy department’s public stance on the 2020 deadline may be starting to soften.
Questioned by the Beis Select Committee following a critical report by the National Audit Office (NAO), minister Claire Perry said it was “absolutely right” to look beyond 2020.
The NAO suggested the rollout might get to 75% of homes by the 2020 deadline, which is broadly in line with suppliers’ best guesses.
Around 25% of households currently have a smart meter, or at least an early ‘smets1’ version, with 12.8m meters installed. Only 250,000 properly functional smart meters, or ‘smets2’ versions, have been installed to date.
Perry suggested the rollout would accelerate, but said it is “absolutely right to think about that [post-2020] landscape”.
Daron Walker, director of smart meters and systems at Beis, said the installation rate must increase to around 8-9m meters a year from around 4-5m a year at present to hit 70-75% of households by 2020.
“You are right to say that is a challenge,” he told the Committee.
Industry body Energy UK and consumer watchdog Citizen’s Advice advised the Committee that the deadline should be reassessed. Chair Rachel Reeves urged Perry to “take on board” their views to avoid benefits being lost. Meanwhile Beis said it would publish an updated cost benefit analysis of the smart meter programme by summer.
Ofgem was criticised by the Committee for not taking a harder line on suppliers that fail to meet rollout obligations.
Suppliers are mandated to give energy advice when installing meters, but according to recall surveys, almost one in three households cannot remember them doing so.
Ofgem director of retail systems transformation, Rob Salter-Church, said the regulator had “used the threat of enforcement” to encourage suppliers to improve performance, and did not “rule out taking enforcement action in the future”.
Reeves said that was not good enough. She urged Ofgem not to spare the rod.
“Ofgem is given important powers. We would ask you to use those powers. The whole point of smart meters is to benefit customers. They will not benefit if they do not get [energy] advice. You are given those powers, use them,” she said.
“We want to see regulators enforcing against the powerful on behalf of the vulnerable. That is your job.”
Watch the session here.