Smart meters approaching ‘powerful tipping point’

The minister overseeing the smart meter programme has predicted that bills for customers using conventional devices will rise as they become more expensive to operate.

The BEIS (business, energy and industrial strategy) committee held a hearing yesterday (30 October) to probe the faltering rate of progress on the smart meter roll out.

In September, the BEIS department announced that the deadline for installing smart meters had been pushed back from next year to 2024, when there is expected to be 85 per cent coverage

Lord Duncan, junior climate change minister, was pressed on how to persuade currently reluctant customers to take up smart meters.

He said: “Once you have 85 per cent smart meters, the network cost of maintaining the operation of non-smart meters is significant.

“There is every possibility that it will become more expensive to hold a non-smart meter and it will cost you more to maintain the old-fashioned installation rather than a new one.”

The cost per customer of maintaining the old-fashioned devices, such as employing meter readers, will rise further as they are borne by a diminishing pool of households, he said.

“The expense of maintaining these relic smart meters will be very high indeed and you will really have to love your old meter because the costs will be very significant.”

Lord Duncan also expressed the hope that the savings achieved from variable rate tariffs, using usage information available from smart meters, would be another incentive to switch to the more modern devices.

And he warned that those suppliers, which fail to meet the 85 per cent target of 2024, could be subject to both fines and pressure from members of the public wanting to know why they have not installed equipment that can help to cut emissions.

“There will be a lot of climate protestors glued to their building because they have failed,” the Conservative peer said.

Mary Starks, executive director of consumers and markets at Ofgem, told the committee that there could be “quite a powerful tipping point” when smart meters become a “normal way of doing things”.

She also revealed that six suppliers, which have been placed on a performance improvement plan because they have not offered energy savings advice to a large enough proportion of smart meter customers, have all upped their game.

As an example, she said that Eon had improved its advice offer rate from below 60 per cent to “comfortably above” 70 per cent and is “on track” to exceed 80 per cent.

She said that the biggest suppliers are all achieving 70 to 80 per cent rates, which she described as “pretty good”.

“The bigger challenge is newer and smaller suppliers who are not performing well and we need to change that.”

Richard McCarthy CBE, chairman of the Data Communications Company, defended the rate of progress on converting SMETS1 meters, which cannot necessarily be switched from one supplier to another, to become fully inter-operable.

He said that testing had proven that dormant first-generation meters could be turned back on in fully smart mode with migration of the first cohort about to begin.

McCarthy said the migration of currently active SMETS1 meters to smart mode is due to be completed by the middle of 2021 with the daily number due to increase from the current rate to 1,000 per day to up to 70,000.

He also said that the number of SMETS2 installation is now running at 70,000 a month – 22,000 of which are happening in the north of England following the resolution of technical problems that allow the more sophisticated devices to work within the region’s radio frequencies.