Smart rollout needs political leadership

One of the most telling findings from our research on the market’s readiness for the smart meter rollout is the estimate of cost per household. Suppliers believe it will cost an average of £227.57 per home. Distribution network operators predict £374. The suppliers are leading the rollout and may well know something the rest of the market doesn’t, but this discrepancy neatly illustrates the confusion surrounding the rollout; the lack of confidence the rest of the market has in the suppliers’ ability to deliver; and the poor communication between various market participants. Our research also shows that supplier confidence is not backed up with fact: only one in five reported having the processes in place to identify and deal with multiple dwelling units. Only 35 per cent of supplier respondents had processes in place to deal with difficult meter locations.

These are shocking statistics to report less than two years before the mass rollout is due to start in autumn 2015. It’s no secret that some suppliers are far ahead in their preparations, but surely to have thought about the details of installing meters in blocks of flats, for example, should be a bare minimum.
But who can really blame them when the technical programme itself is still stuttering into life? As we reported last week, there are growing concerns that the timetable for delivery could slip even further, with the final meter specifications still up in the air. Those suppliers that have started early on the rollout could find themselves stranded with tens of thousands of obsolete meters. Meanwhile, distribution networks are left to stick a finger in the air and guess how much the rollout will cost them in terms of increased call outs and interventions.
This programme has been at risk of failure since the government made the misguided decision to hand it to the suppliers. But, to borrow a phrase from the banking world, it’s too big to fail. If it goes wrong, the financial and reputational costs will be crippling. If it goes right, it could provide a much-needed reset for the relationship between energy companies and their customers. The programme needs strong leadership from central government, detailed preparation and immovable, enforced deadlines – and quickly.