Is the smart meter deadline the culprit for programme woes?

The Smart Meter Bill proposes to extend the time the government can intervene in the smart meter programme. Jane Gray asks, could this pave the way for the installation deadline to be put back?

To say there are a lot of problems with the UK smart meter rollout is an understatement. If millennials were running our energy companies today, they’d respond to the observation with a jaundiced #nokidding.

The rollout methodology for the programme was unpopular from its inception, with both suppliers and the jilted energy networks. The technology has suffered setbacks, in-home displays (IHDs) have caused strife, concerns about supply chain readiness and availability of labour have mounded and now, safety concerns are bleeding into the toxic mix of problems.

And yet, this infrastructure mega-project is still held up as a symbol of a more optimistic energy future – a future of engaged prosumers, of enhanced energy efficiency, of time-of-use tariffs that can support the dynamics of a more flexible, low-carbon energy system.

There is an urgent need to resolve this conflict between the programme’s challenges and its promise. At Utility Week’s Energy Summit at the end of June, EDF Energy chief executive Vincent de Rivaz recognised this. “It is vital that the industry gets this critical project right,” he said.

The forthright Frenchman has already urged the government to review its tight 2020 deadline for the smart meter programme in order to help deliver a good outcome. At  the Energy Summit he reiterated the advice: “I renew my call for all interested parties to come together and review where we are with this immense national project.

“Security, safety, quality, customer engagement, cost and timeline, these are the key challenges we are facing and we must address them if we want to make this programme a success.”

De Rivaz is right, all of these issues interplay and exacerbate one another. If they are allowed to continue unchecked, they can only lead to a bodged job and complete the loss of public faith in the energy industry.

Of all the challenges listed, however, it’s the timeline, along with the lack of any central project management to co-ordinate the rollout, that is really key.

With more time, the other problems that suppliers, contractors, manufacturers and the Data and Communications Company have encountered can be sensibly resolved.

Take the growing concern over rollout safety. Industry misgivings about the likelihood that replacing every meter in the country in quick time would compress and increase the run-of-the-mill safety issues that pop up when meters are exchanged, have been rumbling for some time.

At last year’s Utility Week Congress, Wales and West Utilities’ head of emergency services and metering, Clive Book, said: “Obviously, if you’ve got to go in and work on every meter installation in the country – or 80 per cent of them – in the next four years, there will be some consequences and we know that now.”

He added: “When you disturb things, you get leaks, you get problems. However, the volumes could be significant.”

On 28 June, these industry worries were publicly surfaced in a BBC Watchdog TV programme that highlighted several consumer case studies where incorrectly fitted or faulty smart gas and electricity meters had caused safety issues in homes.

Collecting social media responses to these issues, Watchdog said “loads” more consumers got in touch during the live programme to share their experiences and safety concerns about smart meters.

In one case, a missing washer on a gas meter led to a leak. In an electricity example, incorrectly reconnected wires caused a fuse board to burn out, pouring smoke into a child’s bedroom. The family involved were clearly shaken – and then enraged since they had to move out of their house while risks were resolved.

The errors were described by industry experts on the programme as “unforgivable” negligence.

But gas industry veteran Mike Griffin added: “I can’t see there not being more mistakes unless we… take the pressure off the guys who are doing the installing and put the emphasis on a good meter, fitted properly, left safely.”

Griffin’s not the first to say this. Earlier in June, the head of new sales for Siemens’ smart metering business, Jon Turner, told Utility Week “there is a risk” that a scramble to get newly trained engineers into the field and deliver smart meter targets could lead to installation quality failures including gas leaks and reverse polarity situations.

He spoke of “untold” pressures on meter operators (MOPs) to compete for a meagre pool of qualified and capable installers and emphasised that building this talent pool cannot be rushed. Recruits need “training, post-training, coaching and mentoring”, said Turner.

In the meantime, the clamour for established installer skills is causing crippling inflation in the salaries and packages MOPs must offer. This is pushing up the cost of labour on install, an increase that can only be absorbed by the industry for so long before it is passed through to consumer bills, causing yet another public scandal over the cost of the smart meter programme.

Like Griffin, Turner suggested that the best way to “take pressure off” installers and mitigate against safety compromises, along with cost escalation, is to take a “realistic” approach to the programme’s timeline.

On Watchdog, Conservative MP Derek Thomas, who sits on the science and technology select committee responsible for monitoring the smart meter programme, was more explicit. The government has “nothing to lose”, he said, by introducing flexibility on the 2020 deadline and conducting a review of safety issues and their contributing factors.

Even the BBC’s Watchdog presenters, so often combative in their defence of public interest, seemed ready to accept that time pressures, not endemic or deliberate incompetence, were to blame for the incidents they had uncovered.

Interviewing Energy UK’s director of energy supply Audrey Gallacher, Watchdog’s Matt Allwright suggested: “Don’t you just need more time?”.

Somewhat surprisingly, however, Gallacher refused to take this bone. “There’s no doubt that it’s a really challenging programme,” she said, “there’s a lot to be done, but health and safety would never be compromised to meet a target.”

Pressed further, Gallacher repeatedly turned down offers to blame the timeline for programme problems. “I really don’t think there are any systemic risks in the ­programme,” she concluded.

Energy UK’s reluctance to side with the broad church of complainants calling for the smart meter rollout deadline to be put back will seem particularly odd to some in the wake of the Queen’s Speech. The Smart Meter Bill proposes to extend the cut-off date for government powers to intervene in the smart meter programme and some industry figures have suggested this paves the way for also shuffling back the installation deadline.

Ryan Thomson, a partner at energy consultancy Baringa, believes the bill certainly offers “wiggle room”, while Dan Lewis, energy policy adviser for the Institute of Directors, is confident it represents a watering down of the 2020 deadline. The government has acknowledged “there was no way they were going to make the 2020 target”, says Lewis, and he looks forward to some “healthy debate” around the practicalities of smart metering when the bill comes through.

Technically, of course, this is simple speculation. The government has given no formal indication that there is room for negotiation on the deadline. Indeed, it has resolutely maintained rhetoric around the absolute nature of the end date.

It’s understandable that the government would not want to appear soft on the energy industry. Critics would no doubt argue that the 2020 deadline would have been eminently achievable had companies been more proactive from the get-go. But this accusation would overlook the technical hitches that have prevented the widespread early deployment of meters – the grinding process of agreeing meter specifications, hold-ups in the launch of the central data system and overruns in testing for the introduction of SMETS2 meters, for example (these are ongoing).

To have pushed ahead with getting meters on walls while the functionality and performance of meters was fragile would have been the height of irresponsibility and government must accept the truth of this.

Arguably, these technical hitches might have been avoided had there been greater co-ordination and project management from a central body, but again, government chose not to go down this route.

In the cold light of day, the pure impracticality of the 2020 deadline must be accepted and measures taken to bring all stakeholders together to resolve programme challenges once and for all. Without this ­pragmatism, the industry, and customers, will miss out on the great promise that smart metering should deliver.

It’s not all bad

Despite the significant challenges faced by the smart meter programme, there is evidence that the technology can deliver on expectations for it to make customers more engaged with their energy use, and to reduce consumption.

In February this year, Smart Energy GB – the body responsible for consumer awareness of smart metering – published the results of a survey of more than 10,000 UK adults, asking them about their perceptions and experience of smart meters.

Of those who had already had a meter installed, 81 per cent said they would recommend them to others. Furthermore, respondents on lower incomes were even more likely to recommend smart meter adoption to others (88 per cent) – an encouraging result for those with concerns that vulnerable customers might miss out on the benefits of smart energy.

Other insights in the report were that 82 per cent of people who have smart meters have taken at least one step to reduce energy usage and that 87 per cent of those with smart meters believe they now have a better idea of what they are spending on energy.

Meanwhile, 70 per cent of respondents with smart meters said they now feel confident that they have the information they need to choose the right energy tariff, compared with 57 per cent of respondents without smart meters.

Smart Energy GB is not alone in receiving positive feedback from early smart meter adopters. Independent research conducted by Utility Week, in partnership with Harris Interactive, found that 64 per cent of smart meter customers have enjoyed better visibility of their energy costs since having the meter installed. While the result is lower than Smart Energy GB’s finding, it is nonetheless encouraging.

Furthermore, when Utility Week probed customer experience of the meter installation process, 97 per cent said they found the process straightforward, suggesting that concern over customer irritation and inconvenience during installation may be significantly overstated.

Smart metering technology does have the potential to transform the energy industry, and consumer engagement with their energy use. However, the importance of tackling a low volume of high-impact negative experiences should not be underestimated. The rollout still has a long way to go.