NEWS

Having finally admitted the previous 2020 deadline was impossible, the government has pushed back the smart meter rollout target. But is this a good move or simply postponing the inevitable? Let’s find out.

At Meter Corp, we’ve been keeping a very close eye on the UK government’s plans to swap everyone in the country’s energy meters for new smart meters. We’ve talked about how the smart meter rollout is not as eco-friendly as you may think. We also talked about how the government’s 2020 deadline to finish the rollout was far too optimistic, bordering on impossible.

It seems someone was listening, because the government has decided to abandon its commitment to finishing the rollout by 2020, pushing the deadline back by four years to 2024. If we look at this news in more depth, additional questions come up. Should there be a deadline at all? Is there a better way?

Why has the government extended the smart meter rollout deadline?

As we wrote in the earlier article, there were several reasons why replacing every household in the UK’s energy meters by 2020 was unachievable, despite ministers’ protestations. The cost of replacing old meters was higher than initially thought, as well as the price of analysing all of the data smart meters produce. There was also a shortage of actual smart meters.

However, perhaps the most significant cause of delays to the rollout was technical problems. The first generation of smart meters, known as SMETS 1, had been fitted in more than 12.5 million homes. However, an issue was discovered, which meant they could stop working if a customer switches their utility supplier. This is known as ‘going dumb’ in the industry. A new smart meter standard, SMETS 2, which does not have this issue, has been developed, but the infrastructure to link SMETS 2 meters to their suppliers still doesn’t exist in many parts of the UK, notably the North of England.

As a result, the rollout was way off target:

• Only 50% of households will have smart meters by 2020
• The cost of the project has risen from £11 billion to £13.5 billion
• Customers have experienced aggressive tactics on the part of energy suppliers to agree to have smart meters fitted

Our view

Many welcome the news that the government has admitted that finishing the rollout by 2020 is impossible. It’s something that should’ve happened a long time ago. However, we are not convinced that the new target of 2024 is achievable. There is a view that extending the deadline is simply kicking the can down the road.

But, maybe there doesn’t actually have to be a deadline for the smart meter rollout at all. A better solution would be to replace every household’s energy meter with a smart meter when its existing meter has come to the end of its life, if the customer wants it.

Switching meters as and when needed, rather than to meet an arbitrary deadline brings so many benefits.

Scrapping the deadline lowers costs

The costs of the smart meter rollout programme have already run into the multiple billions and are predicted to reach more than £13 billion by the time it is finished. That is an astronomical figure, especially when you consider what else that money could be spent on. Energy companies are spending billions on smart meters which they could use to focus on renewables and getting to net-zero carbon emissions.

At the moment, the bill for the smart meter rollout programme, including fixing the myriad of technical issues, is passed on to the consumers through higher bills. Could abandoning the deadline mean customers pay less for their energy?

When replacing the meters is increasing bills to consumers and the existing meters work perfectly well, why do it?

Finally, as we talked about in the earlier article, the jury is out on whether smart meters really help customers save money. On average, customers with smart meters use 2% less energy than customers without. While every little helps, it’s hardly earth-shattering. Is it really worth it?

It’s more eco-friendly

One of the primary aims of fitting smart meters as a matter of urgency is that it will help us consume less energy, making the UK more eco-friendly. However, when you look more deeply, having a deadline for completing the rollout is not eco-friendly at all:

• Scrapping and recycling (where possible) legacy meters requires energy
• Some parts of meters cannot be recycled and will be sent to landfill sites
• Fitting the meters uses energy, while transporting them raises emissions
• Manufacturing and transporting smart meters are not eco-friendly
• Smart meter households only use 2% less energy, on average

Why are we doing all this when we don’t actually need to? Good, working meters do not have to be destroyed unnecessarily.

End-of-life meter replacement will be more popular with the public

The public, who don’t give a second’s thought to their energy meters most of the time, are not clamouring to have their existing meters replaced with smart ones. In fact, if leaving things alone will lead to lower bills, reduced waste and less environmental strain, I imagine they would be in favour of abandoning the deadline.

It would also mean that energy companies do not have to resort to aggressive techniques to get customers to accept having smart meters.

It would be better for energy companies

Another reason for scrapping the 2024 smart meter rollout deadline is that it would do the energy suppliers a favour. It would give them time to fix all the technical and infrastructure problems once and for all, rather than solving problems on the hoof. It would also mean there is less of a rush to manufacture smart meters – getting them built abroad and shipping them to the UK to meet an arbitrary deadline is not a good use of resources. It also means they can concentrate time and resources where it is needed, such as the focus on renewables.

Final thoughts

To sum up, while it is good that the deadline has been pushed back, easing the pressure slightly, it would be better if the deadline is erased altogether.

It makes sense. Let’s hope the government realises this soon.