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NAO calls for clarity over future of UK smart meter installation plans

New report has said efforts to introduce smart meters for electric and gas in UK homes are behind budget and schedule, requiring more clairty over future plans beyond 2020

The Department for Business, Energy and Industrial Strategy (BEIS) must soon decide whether to revise its plans for all UK homes to have smart meters installed by 2020, the National Audit Office (NAO) has said.

A report from the NAO found that long-standing goals for energy suppliers and government to ensure all homes had been offered smart metres in order to improve how energy is used for powering and heating homes were behind schedule and budget. The auditor has said that a rethink is required around the current timeline of the national policy to introduce the new meters and ensure sufficient cost and operational benefits can be realised.

Any such review could have implications for efforts to transform the efficiency of heating UK homes, such as in better managing gas use or supporting the introduction of electric approaches to heat.

The UK has been relatively unique among EU countries in choosing to implement smart gas meters as well as electric devices due to the majority of the country’s heating needs coming from the fuel.

The NAO stated, “Because in-home displays and gas meters are typically located at a distance from electricity meters, the decision to include them in the design of the smart metering system in Great Britain has added to its overall complexity.”

“Devices need a wireless network to connect to each other and, because gas meters do not have their own power supply, smart gas meters require battery packs. Batteries are non-replaceable and must therefore last for the lifetime of the meter. This means that, to save power, gas meters only ‘wake up’ to send and receive information once every 30 minutes. At other times, messages must be queued and this has contributed to technical complexity.”

The report also noted that ensuring the latest range of smart metres (SMETS2) are in place was increasingly important in assisting consumers to be more efficient with their energy use.

However, Specific fears were raised by the NAO concerning the installation of more than seven million older generation SMETS1 meters than originally planned by BEIS as part of the smart meter strategy.

An estimated 70 per cent of this older generation of meters are not interoperable with other service providers and are therefore unable to function after a consumer switches to a new energy supplier, the NAO said. This has resulted in these meters entering a “dumb mode”.

The report said, “As of the end of June 2018, around 943,000 smart meters were operating in dumb mode. This means that many consumers will face a choice between remaining with a more expensive tariff or losing the benefits of their smart meter.

“This risks undermining the government’s aim of increasing the number of consumers switching energy supplier to ensure that consumers get value for money.”

BEIS is being urged by the NAO to update its existing cost-benefit analysis of the value for switching over to smart meters, while also setting out clarity for its policy beyond the 2020 target.

Other recommendations include setting up contingency plans for any further delays to introduce interoperable meters or unexpected cost increases for the technology.

An independent expert review to determine if there is sufficient interoperability between different appliances and energy suppliers should also be launched, the NAO added.

The National Energy Action charity said the NAO findings that government smart meter ambitions would not be met on time or budget required immediate and urgent actions to ensure benefits from the programme can be realised.

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