Ministers' plans for smart meter in every home to be delayed and over-budget, says watchdog

Posted On: 
23rd November 2018

Plans to give every household a smart meter by 2020 will not be met, while the cost of the rollout will likely be higher than expected, the Government’s own spending watchdog has warned.

Ministers have intended for smart meters to feature in every home by 2020
Credit: 
PA Images

The move to offer the devices, which show how much energy consumers are using in pounds and pence, was introduced by the last Labour government in 2009.

But the National Audit Office (NAO) pointed to “significant technical delays” in the scheme which mean the introduction of the newest meters has been slowed by more than than three years while some technology still needs to be developed.

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The body says efforts by the Department for Business, Energy and Industrial Strategy to stick to the initial deadline had ended up putting “increasing pressure” on the programme.

Amyas Morse, the head of the NAO, 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."

The NAO say attempts to make up for the delay by installing over seven million more of the earlier models than planned had made the process more complex and expensive.

Unlike the newer 'SMETS2' model, around 70% of the old 'SMETS1' meters “go dumb” when people switch supplier because the new supplier is unable to communicate with the meter, the watchdog says.

Meanwhile energy suppliers are only able to only install the newer model meters in at most 70% of all households because of limitations with the technology.

The watchdog also said the costs of the project will likely run over the 2016 estimate of £11bn by half a billion pounds – the equivalent of £17 per household.

And they say many consumers will treat installation of a smart meter as low priority, which could prompt suppliers to spend around £200m on promoting them.

'SERIOUS QUESTIONS'

Rachel Reeves, the Chair of the Commons Business, Energy and Industrial Strategy Select Committee said the department had “serious questions to answer” about its management of the programme and whether the smart meters target was still “feasible, desirable and cost-effective”.

Labour's Rebecca Long Bailey meanwhile said: “Tackling climate change and energy poverty means there is a huge amount of work needed across the country on home insulation, low carbon heating and small scale renewable generation.

The Shadow Business Secretary added: What's needed is proper planning and responsible, coordinated provision to win the trust of households. The smart meter fiasco - an example of blind faith in markets - is an example of how not to do it."

But Energy and Clean Growth Minister Claire Perry defended the plans, saying millions of people had "already chosen to have a smart meter and take control of their energy use to cut their bills".

She added: “We’ve said everyone will be offered a smart meter by the end of 2020 to reap these benefits and we will meet that commitment.

“This world-leading upgrade to our national infrastructure is the cornerstone of our move to a smarter energy system of the future and will bring benefits to consumers and industry worth up to £40 billion.”