The UK’s smart meter rollout programme is at risk of being derailed, MPs have warned, urging urgent government action to avoid making one of the UK’s flagship mandated energy policies a “costly failure”. They suggest it may be time to take the rollout off energy suppliers and hand over to energy networks.
The Energy and Climate Change Committee’s smart meters report catalogued a host of major problems with the rollout.
Delays in setting up the co-ordinating technical body, agreeing meter specifications and engaging the public all risked policy failure, the report suggested. Ultimately, it called for energy networks to be brought in to help sort out the mess created by the government opting to proceed with a supplier-led rollout.
The report pulled few punches. It suggested that the body contracted to co-ordinate the technical side of the rollout, the data communications company (DCC), appeared to have “a poor understanding of its contractual obligations”. That in turn, the Committee said, represented a “failure on the Government’s part to ensure it was contracting with a partner capable of delivering what it requires.”
The Committee said it was taking too long to sort out technical issues around smart meters installed early on (so-called Smets1 meters) and the later agreed standard for smart meters (called Smets2). It suggested that early installed meters that were close enough to the agreed advanced standard should be left in use to avoid further delays to the programme. Many suppliers, particularly those with a strategy to ‘go early’ on smart meters to gain competitive advantage, have lobbied hard for this solution.
The report said that the central comms body tasked with co-ordinating public engagement (Smart Energy GB) had to “step up delivery” of its communications programme. It needed to prove it had a “clear plan”, the Committee said.
Bring in the networks
Energy networks were left aghast when the government opted for an energy supplier-led rollout. The report suggested it may be too late to reverse that decision, but made clear its appraisal of the outcome. Cataloguing a swathe of major problems with the rollout, the report concluded:
“All the problems which we have identified are symptomatic of a national programme whose management the Government has left largely to suppliers.”
Taking the rollout off the suppliers and handing it to the networks would be a huge decision for the next administration. The report acknowledged that it may be too late to completely hand over to the network operators, but left the door open:
“The Government must give serious consideration to whether or not it is possible to reduce costs to consumers by streamlining the roll-out of smart-meters, perhaps through more active participation of DNOs.”
Either way, government could not leave it to commercial companies to deliver such a nationally significant project, the report concluded:
“The Government must also take a more active role in driving forward the industry-led roll-out, seeking and facilitating industry-wide solutions to the technical challenges that remain. Getting it right will eventually cut energy usage and bills for 30 million homes and businesses in the UK. Getting it wrong risks embarrassment for the Government through public disengagement with a flagship energy policy and a costly missed opportunity.”
See the full report here.
Updated: Decc and Ofgem have now responded to the report. The department disagrees with many of its central recommendations and insists that energy suppliers rather than networks remain best placed to deliver the rollout. Read the response here.