Energy suppliers may have been given wiggle room to complete the rollout of smart meters after 2020.
The Smart Meter Bill, contained within the Queen’s speech, reiterates that the requirement to offer a smart meter to all households and business by 2020 remains in place. However, it will also “extend the Government’s ability to make changes to smart meter regulations by five years, making sure the rollout is delivered effectively, and that benefits are maximised into the future”, (see this link, p32).
Industry body Energy UK’s line is that suppliers “remain committed to the offer of a smart meter to all homes and businesses by 2020.” But it is not yet clear what the Bill means in practice.
An implicit extension to the rollout would be welcomed by some suppliers, which have suggested that delays to critical infrastructure and standards have led to increasing costs, which are driving up customer bills.
Government’s own figures suggest those delays have helped wipe £415m from net projected benefits of smart meters. Because of the compressed timetable, SSE last winter urged government to rethink the rigidity of its deadline and requirements.
“It is … SSE’s view that a reconsideration of the delivery timetable is urgently required in order to protect customers and ensure benefits are delivered,” said the firm. It also suggested unshackling suppliers from the mandate to take “all reasonable steps to offer a smart meter” to all customers.
Precisely what constitutes ‘all reasonable steps’ is yet to be defined by regulator Ofgem.
Business leaders have also urged government to shelve the programme. The Institute of Directors stated last month that, “The programme has already failed to deliver interoperable meters for switching, is behind schedule, is over-budget and wedded to out of date technology. Not only that, the legal obligation on suppliers to install potentially incompatible meters by the deadline of December 2020 or else pay large fines is already pushing up inflationary costs in wages and advertising.”
It added that “much cheaper solutions” could be delivered instead.
To date, British Gas has installed the lion’s share of the UK’s 6m+ smart meters. As of late February it had installed around 3.5m. Eon had installed more than 750,000, SSE around 400,000 and EDF 150,000. At the end of 2016 Npower had installed 130,000 smart meters. Scottish Power had installed 240,000 according to February’s full year results, and stated it would install 2,500 a day over 2017.
Perhaps anticipating a deadline extension, Scottish Power has signed up Actavo to help deliver almost a million additional smart meters across the Midlands over five years. That would take its rollout to 2022.
Update: A spokesperson for the department for business, energy & industrial strategy (Beis) said there is “no change to the timetable for the offer of a smart meter to all consumers by 2020” and that the five-year extension for rule changes was “the normal period for these types of things”.
Firms involved in metering and billing also told The Energyst that while completing the rollout by 2020 was “highly unlikely” without spiralling costs, the government could not be seen to take pressure off suppliers. In any event, said one, requiring suppliers to simply ‘offer’ a smart meter “provides sufficient leeway in terms of the timetable for physical installation”.