2020 smart meter target ‘will not be met’ as Scotland lags behind rest of UK

The National Audit Office (NAO) said today that the Department for Business, Energy and Industrial Strategy (BEIS) expected the cost of the programme to be £11 billion in 2016, equivalent to £374 per dual fuel household.

But it has now found the figure “underestimates the true cost of rolling out smart meters” and has since increased by at least £0.5 billion, equivalent to an extra £17 per household.

Up to 53 million smart meters, which will replace traditional electricity and gas meters in homes and businesses, were due to be installed across Britain by the end of 2020 to meet the government’s target, saving households an average of £18 a year between 2013 and 2030 after they have met the costs of the programme.

However, the rollout has struck a number of issues, with the NAO finding that about 70% of first generation SMETS1 meters “go dumb” when people switch to a new supplier.

Significant technical delays resulted in the first smart meters only being installed in July 2017, over three years later than first planned. In their absence, energy suppliers have installed 12.5 million SMETS1, 7.1 million more than the 5.4 million planned by BEIS.

Because the start of the SMETS2 rollout was significantly delayed, sticking to the 2020 deadline is putting increasing timetable pressure on the programme, the NAO said. This increases the risk of cost escalation and/or technology being rolled out before defects have been addressed.

The NAO also found that installation of SMETS2 meters in the north of England and Scotland was lagging behind the rest of Great Britain due to problems integrating them with communications infrastructure, with just 3,000 of them in place as of the start of November compared to 106,000 in the rest of Great Britain.

The NAO also criticised energy suppliers for “falling short of their obligation” to provide consumers with advice on how to save energy, which was likely to limit how much money they could save with their smart meters.

However, the NAO concluded: “The facts summarised above, and many more, are not fatal to the viability and value for money of the programme.

“However, there are serious issues that need to be addressed if smart meters is to progress successfully and deliver value for money.”

NAO head Amyas Morse said: “Costs are rising, and timescales slipping, but smart meters can still succeed over time.

“BEIS has taken most of the decisions that matter on the programme so far. They now need to take responsibility for getting it back on track and protecting the interests of consumers who will ultimately meet the bills.”

Rachel Reeves, chair of the Business, Energy and Industrial Strategy select committee, said: “The NAO’s report highlights the massive delays and problems associated with the roll-out of smart meters. Costs are rising, and the 2020 target will not be met.

“Consumers have faced considerable frustration, experiencing glitches with their meters, or finding their smart meters go ‘dumb’ when switching supplier. It’s important that consumers are genuinely able to realise the savings available from having smart meters installed in their homes. The Department for Business, Energy and Industrial Strategy have serious questions to answer about their management of the smart meter roll-out programme and, as a Committee, we will be keen to examine in our evidence hearing in the New Year whether it is feasible, desirable and cost-effective to continue to plough ahead with the Government’s 2020 target.”