Proving the Business Case for the Internet of Things

MPs criticise UK government smart meter programme

Steve Rogerson
March 16, 2015
Plans to install energy saving smart meters in every UK home and business by 2020 are in danger of veering off-track and could prove to be a costly failure because the project has not been driven forward effectively, the Energy & Climate Change Committee has warned. In a report, the MPs raised concerns about technical, logistical and public communications issues that have resulted in delays to a national roll-out programme.
"Time is running out on the government’s plan to install smart meters in each of the UK’s 30 million homes and businesses by 2020,” said Tim Yeo MP, chair of the government select committee. “Smart meters could generate more than £17bn in energy savings for the country yet a series of technical and other issues have resulted in delays to the planned roll-out.”
The committee first looked at this programme in 2013, highlighting issues that it urged the government to address.
“While some progress has been made since then, it’s not enough,” said Yeo. “The energy industry told us that it needs the government to enable industry-wide solutions, rather than the less efficient alternative of letting each energy supplier develop its own solution.”
He said that without a significant and immediate change to the government’s present approach, which aims to install smart meters in all UK homes and businesses, the programme runs the risk of falling far short of expectations.
“At worst, it could prove to be a costly failure,” he said. “So, the government is at a crossroads on its smart meters policy. It can continue with its current approach and risk embarrassment through public disengagement on a flagship energy policy, or it can grip the reins, and steer the energy industry along a more successful path which brings huge benefits for the country."
Smart meters allow energy suppliers to get remote electricity and gas readings from households and businesses using mobile phone-type signals and wireless technologies. The potential consumer benefits from smart meters include lower energy bills through reduced energy consumption alongside energy efficiency.
The roll-out of smart meters in the UK is due to take place between 2015 and 2020 with an estimated 53 million devices to be installed by energy suppliers in 30 million homes and businesses. The UK government’s Department of Energy & Climate Change estimates that the roll-out of smart meters will cost around £10.9bn and these costs will be passed onto consumers. However, the cost is expected to be offset by expected savings of £17.1bn, in part from energy efficiency.
The committee reviewed the progress of the roll-out and was disappointed by the on-going policy delivery problems that the government has failed to resolve. These include technical communications problems with multiple occupancy and tall buildings that should have been resolved by now, compatibility problems between different suppliers and different meters, a slow start to full engagement with the public on meter installation and long-term use, a delay by the government-appointed communications infrastructure company that has further set back confidence in the programme, and a reluctance to improve transparency by publishing the Major Project Authority’s assessments on the smart meter programme. The energy industry is also calling on government to do more to address the problems.