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Smart meter roll out could cost households an extra £100

November 23, 2018

By Paul Homewood

 

The National Audit Office blasts the smart meter roll out, as the Telegraph reports:

 

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The government’s smart meter roll out is in chaos and could end up costing every British household £100 more than first expected, spending watchdogs have said.

Multiple failings including delays and technical problems are threatening to add nearly £3bn, or around a quarter, to the cost of the project, according to a National Audit Office study published today.

Originally Ministers had said the total cost would be £11bn, or £374 per household, paid for by consumers through higher energy bills.

However an extra £3bn cost would mean an extra £93 charge on each household, effectively wiping out five years worth of savings generated by the devices, the report suggests. According to the NAO smart meters are predicted to save each household an average of £18 a year over the coming decades.

The report is the most critical assessment of the UK’s smart meter program so far, warning it is fraught with technical problems which have been ignored by the Government.  

The UK will not meet the 2020 deadline by which every home should be offered a smart meter, it said, which could lead to energy firms being fined. 

It also pointed out an unknown percentage of first generation meters may need replacing as they cannot be upgraded to stop them "going" dumb" when people switch to a better deal.    

Head of regulation at uSwitch.com, Richard Neudegg, said: “As many as 70 per cent of the 12.5 million smart meters installed so far will go ‘dumb’ if an energy customer switches supplier. That means there’s a risk that up to nine million may need to be ripped off the wall and replaced at considerable cost and inconvenience to households." 

It also warned that the installation of second generation meters in the North of England and Scotland is lagging behind the rest of Great Britain due to problems integrating them with communications infrastructure.

Experts last night called for the roll out to be delayed while technical problems are fixed, but writing in today’s Telegraph energy Minister Claire Perry MP, said there were no plans to put it on ice.

She said: "Pushing back the rollout now – as some have suggested – would only delay millions of households from enjoying the substantial benefits of moving to a smarter energy system, and take the wind out of the sails of a rollout which is adding nearly half a million new meters a month." 

As of the beginning of November, just 3,000 second generation meters had been installed in the North of England and Scotland, compared to 106,000 in the rest of Great Britain, it said. 

Amyas Morse, 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.”

https://www.telegraph.co.uk/news/2018/11/23/smart-meter-roll-could-cost-households-extra-100-means-homeowners/

 

It is the usual head in the sand response from Claire Perry, who fails totally to justify spending £14bn on the roll out, equivalent to over £500 per household.

38 Comments
  1. Jack Broughton permalink
    November 23, 2018 3:12 pm

    The claimed savings by using “smart meters” ought to be reviewed along with the cost. The savings are a fiction as electricity usage is by need not price. For example lights are used for safety and life-quality and simple replacement with LEDs achieves a massive saving if the primary-us lighting is replaced. (I have reduced my electrical usage by about 40% by these).
    The only way any savings will be made is time-of-day pricing: a policy that would take the post code lottery into electricity usage: power on demand for the wealthy.

    • A C Osborn permalink
      November 23, 2018 3:58 pm

      Jack, how has changing over to LEDs saved you 40% on your total Electricity bill?
      Also what was the outlay for those LED bulbs, I am looking at a 16 fold increase in price over the old 60W or 100W incandescent bulbs.

      • November 23, 2018 5:40 pm

        One of the UK pound shops (not sure which one) has ELECTREK LEDs for … £1, they don’t have really bright ones, but are adequate for most applications.

  2. November 23, 2018 3:15 pm

    This initial cost to the consumer is just the starters. Once installed these smart meters will be used for what is euphemistically called “Demand Management “; whereby by either pricing or switching off, energy prices will escalate in proportion to the incompetence of the energy policies.
    The price range being in the order of £50/MW to £1500/MW. Not the mention the cost of not having energy available when you need it.

    A final point from a personal view: these units will inevitably be hacked; so beware! Avoid them if you can; but I suspect that if you refuse to have one your tariff will be markedly escalated. This is already happening now on a stealth basis from my experience.

    • A C Osborn permalink
      November 23, 2018 4:00 pm

      Which is why so many people have switched to other suppliers.

  3. Geoffb permalink
    November 23, 2018 3:20 pm

    Same conclusions as the 2014 auditor general report on Ontario introduction of smart meters, a complete fiasco and no change in consumer habits. They had Time of Use (or Day) pricing in place from the start.
    Claire Perry misses the point that without a TOU price increase for peak times, there is no incentive to change usage patterns so there is no way a smart meter can save you money. Our electricity costs the same 24 hours per day, the only way you can save money is not to use as much.

    http://www.auditor.on.ca/en/content/annualreports/arreports/en14/311en14.pdf

  4. Harry Passfield permalink
    November 23, 2018 3:54 pm

    I wonder what Perry means by “Substantial benefits”? She probably didn’t write the piece and doesn’t know anyway. All I know us that when Maxine Pike comes on the radio with tgat fatuous ad for smart meters, I switch off. (Which probably saves some energy!)

  5. November 23, 2018 4:16 pm

    I’m always amazed by how many people allow a “smart” meter to be installed. Over my dead body.

    https://www.bbc.co.uk/news/business-46305961

    • November 23, 2018 4:35 pm

      It’s one for electricity and another for gas, where both are supplied.

      Your traditional gas and electric meters will be replaced with smart meters which send your meter readings to your energy supplier(s).
      https://www.smartenergygb.org/en/about-smart-meters/what-is-a-smart-meter

      • Joe Public permalink
        November 23, 2018 5:03 pm

        But with SMETS1 meters, only if you remain with the original supplier.

        Having recently moved into a home with both gas & electric so-called ‘smart’ meters, it’s amazing how dumb they are.

        Although less than 3 years old, the SMETS1 meters were originally fitted by one supplier; the previous occupant then changed to different gas and elec suppliers. The IHD will *display* the aggregate of day & night electricity quantities, but not separate day & night electricity quantities; it can’t display gas quantity; it won’t transmit either gas or electric meter readings to our current suppliers.

        We ‘save’ money because our current supplier is a small supplier, so is not obligated to spend its income installing smart meters, and therefore undercuts the big(ger) boys’ commodity prices because they *are* obligated to pay for the meters & pass those costs onto *their* customers.

        YCMIU.

  6. Athelstan permalink
    November 23, 2018 4:21 pm

    Big government decided, big government decreed, westminster rubber stamp shoppe ie – parliament and totally subservient, submissive said OK and look see and again and again; they ****ed up in big style, ‘smart meters!”, it’s another green inspired disaster but hey it ain’t their money – now is it?

    if you vote liblavCon – you voted for it.

    • November 23, 2018 5:44 pm

      I suspect it originated in an EU directive.

      • Robert Jones permalink
        November 23, 2018 8:45 pm

        It did. Curiously not every EU member is fitting smart meters, so why are we?

      • Kenm permalink
        November 24, 2018 4:54 pm

        Yes this was a EU directive Germany and France said it would cost to much to
        To carry out but Ed milliband as energy minister in the labour government went ahead with it, we had a choice the EU
        Said it was the countries own choice to go ahead with this crazy ,costly roll out.

  7. Geoffb permalink
    November 23, 2018 4:33 pm

    Well I just spent an hour reading the full report….Looks like The Department (for Business Energy and Industrial Strategy) has continued to screw up and cover up their failings on this project. Whats new?

    I did find the information I was interested in.. The implementation of Time of Use pricing. It says that by 2018 it was going to be in common use….Just 6 weeks to go….

    Peak load shifting
    2.18 Smart meters enable the deployment of tariffs that vary by time of day (time of use
    tariffs). These are expected to save money by reducing the need for extra generating
    capacity, especially if in future the power system increasingly relies on intermittent
    sources like wind. Peak load shifting accounts for around £0.9 billion (5%) of expected
    programme benefits, based on an assumption that time of use tariffs would be in
    common use by 2018. However, time of use tariffs are unlikely to be widely available
    on the market until Ofgem introduces reforms ensuring that energy suppliers will have
    financial incentives to shift demand, known as ‘market-wide half-hourly settlement’.19
    The move to market-wide half hourly settlement is unlikely to happen before 2022 at the
    earliest. Some £0.2 billion of the £0.9 billion in expected benefits from peak load shifting
    were forecast to occur before 2022, with the remainder coming after. It is now clear that
    the benefits forecast before 2022 are unlikely to be realised.
    2.19 The Department told us that the potential benefits of peak load shifting in the
    2020s may have increased since it performed the 2016 cost–benefit analysis, because
    the number of electric vehicles expected to be in use has increased significantly since
    then. Electric vehicles would create considerable additional ‘flexible load’ (i.e. demand
    for electricity that can be shifted outside the peak).

    • It doesn't add up... permalink
      November 24, 2018 2:40 am

      Kathryn Porter has an excellent piece on ToU tariffs here, debunking the likely benefit:

      http://watt-logic.com/2018/11/05/time-of-use-tariffs/

      I suspect that vehicles will need something quite else: essentially, the vehicles in a street will have to negotiate with each other to prevent overloading the local transformer, especially if some of them want to fast charge. That will take sophisticated software on board each vehicle, and means of communication with some local hub, and very likely an app on your phone where you have to decide whether to outbid your neighbour for a fast charge, or for a full charge by a given time. I have yet to see any evidence that the dolts at BEIS, OFGEM and National Grid have worked this out yet.

      Incidentally, with the peak as seen by the grid (which doesn’t see private stand-by generators start up to avoid taking grid power) largely eliminated by the one important form of ToU pricing we do have – Triad charges for large industrial consumers, based on their consumption during the three heaviest demand half hours over the winter – we have the problem that there is very little spare capacity during the day for recharging vehicles, as this chart shows:

  8. Schrodinger's Cat permalink
    November 23, 2018 5:07 pm

    The idea that smart meters would save a lot of money was always a flimsy justification. I’m sure it is more to do with reducing consumption when electricity availability is in danger of causing blackouts. This could be done by alerting the consumer that he has just been placed on a high price tariff. Perhaps in the future the meters will be able to reduce the supply or communicate with smart appliances to achieve a reduction in consumption.

    If this is the true purpose, the public should be told. It would explain the determination of Perry to get these things installed. But they seem unable to get the meters to do basic stuff so it will take many more years, and billions to just get them more reliable. In the meantime, I have heard that people who resist having a smart meter are being put on a much more expensive tariff.

    • It doesn't add up... permalink
      November 24, 2018 2:42 am

      Another tactic is to impose unduly large estimated bills.

  9. November 23, 2018 5:27 pm

    This is Claire Perry’ statement in reduttal of the NAO teport, no doubt written for her by a Greenblob civil servant:

    “Smart meters are the smart choice, now and in the future. Smart meters are the cornerstone of our smart energy system of the future, unlocking billions of pounds worth of benefits for consumers and industry.”

    “Dial-up internet access, VHS and rotary phones are quite rightly consigned to history, and now we can order anything at a click of a button and can stream Netflix from your smart TV while booking our next holiday on your smart phone.

    Given this technological revolution in our daily lives, it’s quite frankly baffling that many of us still think it’s normal to grab a torch, sweep away cobwebs and hunker down under the stairs to get readings from our ancient, dusty electricity and gas meters. But if you don’t face this hassle, you risk an estimated bill way out of line with your actual energy use, potentially paying more or less each month causing cash flows and direct debits to fluctuate, making it difficult for families to budget.

    It doesn’t have to be like this. The smart choice is a smart meter. Customers across Great Britain have already chosen to install more than 12 million smart meters in their homes and small businesses. These devices give them real-time information about their energy use in pounds and pence and provide meter readings to suppliers automatically, putting an end to estimated bills. Smart meters give people control over their energy use, help them make choices to save money and give households more information so they can switch to cheaper deals. Better information also encourages consumers to be take more savvy actions, such as buying more energy efficient appliances or switching to LED lighting.

    Our intelligent, data driven, and smarter energy system is taking shape and smart meters are the key link in the chain to make this a reality. Not only will a smarter system deliver cheaper energy for consumers it will also help us meet our climate change commitments by ensuring our energy use is more flexible and efficient. A resilient energy system will also accommodate more renewable generation and provide clean power for the growing fleet of electric vehicles.

    The report by the National Audit Office today highlights the progress of the rollout so far as well as raising some concerns about the technology and costs. What it doesn’t acknowledge is how the UK has led the world in evolving its energy market to meet the needs of customers, and smart meters are the next step. Our rollout covers all household and small business energy needs – gas, electricity and prepayment – and will meet their requirements both now and in the future. Yes there will be some temporary teething problems with a technological overhaul of this ambition and scale, but these are small speed bumps in our journey to a smart energy revolution that will change our lives for the better.

    The business case for smart meters remains overwhelmingly positive with nearly £17 billion worth of savings forecast for everyone from this technology alone. When you consider there are up to £40 billion of benefits a smarter system will deliver between now and 2050, and you can see why we remain determined to meet our commitment of everyone being offered a smart meter by the end of 2020.

    But I am aware of consumers’ concerns so I want to reassure consumers that we are not complacent and issues with switching will start being resolved as meters are moved into our new national smart metering network. There will always be shifting sands in a first of its kind programme of this size and significance, and we are working hard to iron out operational issues as it progresses. Pushing back the rollout now – as some have suggested – would only delay millions of households from enjoying the substantial benefits of moving to a smarter energy system, and take the wind out of the sails of a rollout which is adding nearly half a million new meters a month.

    By 2030 this tiny seemingly inconsequential device, tucked away in a corner of your kitchen, will wipe £1.2 billion per year off people’s bills – an average annual saving of £47 per household.

    If we all got one and use it to better inform our energy use, we could save enough to power every home in Aberdeen, Cardiff and Manchester for a year – every year.

    Years from now, getting a reading from the analogue meter in a cupboard under the stairs will seem as strange as unhooking your landline to connect to the internet or playing your favourite song on a cassette player. Smart meters will make our lives simpler and easier and our bills more affordable, now and in the long-term. They are clearly the smart choice.”

    https://www.gov.uk/government/speeches/smart-meters-are-the-smart-choice-now-and-in-the-future?utm_source=50dd5d37-a191-462b-87be-b662e6bf7b06&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

    • Dave Ward permalink
      November 23, 2018 6:08 pm

      “And now we can order anything at a click of a button and can stream Netflix from your smart TV while booking our next holiday on your smart phone”

      Except when the renewables powered “Smart” grid collapses, and all battery powered infrastructure falls over after a few hours. Mobile phone base stations, and before too long 21CN landlines need a local power supply, as does “Fibre to the Cabinet” street corner internet equipment. The excellent publication “Living without electricity – One city’s experience of coping with loss of power” by the Royal Academy of Engineering, showed just how quickly the modern, interconnected world fails when the power goes off, and this event occurred 3 years ago – it would be far worse in the near future when the technological advances I mentioned above are commonplace.

      https://en.wikipedia.org/wiki/BT_21CN

      https://www.raeng.org.uk/publications/reports/living-without-electricity

      Oh, and by the way, Ms Perry – VHS and audio cassette tapes still work after donkeys years, which is more than can be said for most modern types of data storage. The technical blogs and forums often report that tape back-ups are still the preferred medium in many large organisations.

    • November 23, 2018 6:22 pm

      I don’t remember the gov’t campaign to get us all to install DVD players and throw our VHSs in the skip. If someone wants a smart meter, let them damn well buy it themselves if they think it will benefit them so much. All the sensible types who see them for what they are should a) not be paying for everyone else’s and b) should not be strong-armed into having them.

      • HotScot permalink
        November 23, 2018 9:04 pm

        Jit

        Top comment.

    • Robert Jones permalink
      November 23, 2018 8:54 pm

      Philip, the Claire Perry statement has been put together by an airhead marketing man, it bears no resemblance to reality. I will not be allowing anyone to enter my house to fit a Smart Meter and will happily forego the illusory saving of £11.00 per year providing that I am not billed the £400/500/600.00 cost of having it fitted.

    • Joe Public permalink
      November 23, 2018 9:01 pm

      “… you risk an estimated bill way out of line with your actual energy use, potentially paying more or less each month causing cash flows and direct debits to fluctuate, making it difficult for families to budget.”

      Scaremongering bullshit.

      1. Utilities are pretty adept at providing relatively accurate estimates, factoring-in weather-related data to historic consumption patterns etc. By no means perfect, but tolerable.

      2. It’s a 50:50 chance the estimate is either an under- or over-estimate. So it’s cash-flow neutral.

      3. “causing … direct debits to fluctuate, making it difficult for families to budget.” NOT if they’re monthly 1/12th of ‘annual-cost’.

      4. An estimated bill ALWAYS gets self-corrected at the next actual meter reading.

      • November 23, 2018 10:00 pm

        Dead right.

        I suspect most people now are on monthly direct debits, which average charges over 12 months. You only need one reading every 12 months to balance things up

      • November 23, 2018 10:41 pm

        With online direct debit at least one provider lets you adjust the monthly payment yourself, within certain limits.

    • Derek Buxton permalink
      November 24, 2018 11:11 am

      She is a lousy MP totally illiterate….and she is an MP, god help us all!

  10. iananthonyharris permalink
    November 23, 2018 5:28 pm

    A complete con and waste of a huge amount of money to be got back from consumers. I absolutely refuse to have one. Govt should scrap this right now (with HS2)

  11. Geoffb permalink
    November 23, 2018 6:03 pm

    Wow….superb bullshit…where does the figure of £1.2 billion off peoples bills come from when the NAO has stated that The Departments figures are optimistic…did she not read the report.

    If the only justification for this billions of pounds spend on smart meters is to save me from 3 minutes time spent reading my meters then its poor value for money.

  12. HotScot permalink
    November 23, 2018 6:06 pm

    Government chooses a technology, again, and screws up, again.

    A Smart Meter is, what, £250 of technology? But the cost to every household is £500?

    An Electric car is £20,000 (minimum), that means the actual cost to consumers will be £40,000, because big government is arrogant enough not to learn an effing lesson repeated over and over again.

    The free market would successfully manage the introduction of smart meters and EV’s at the appropriate time, if they were required and commercially viable.

    It’s a pity the free market can’t manage the introduction of politicians. We might then get some useful enough to manage the country!

  13. MrGrimNasty permalink
    November 23, 2018 6:32 pm

    Even though I have made it clear to EDF, I am still being harassed by automated calls and junk mail. I’m invited to ‘claim my free smart meter’. I can’t possibly use less electricity, I use the absolute minimum as is.

    • November 23, 2018 7:28 pm

      Since they tell you that you can have a free smart meter, why don’t you ask them to send you a hundred of them?

      • HotScot permalink
        November 23, 2018 10:11 pm

        Only one per household sir, thank you for your interest, now just sign here.

        Universal sales manual Version 1, Volume 1, Chapter 1, Paragraph 1: Always close the deal when there’s an opportunity.

    • HotScot permalink
      November 23, 2018 9:20 pm

      MrGrimNasty

      A few options here.

      1) Change supplier, some are worse than others.

      2) Write to your supplier withdrawing your consent for them to use your data for marketing purposes.

      3) Report your supplier to the Data Protection Commissioner.

      4) Use a phone service with an ID blocking facility (iPhones seem good for that, if not ‘Trucaller’ isan option on a mobile phone) if you use a landline you might want to consider a VoIP service as they usually have it as a standard option and much easier than a conventional phone as it usually has online control. https://www.voipfone.co.uk seems good although I haven’t used them much, yet.

      • MrGrimNasty permalink
        November 24, 2018 8:57 am

        Yes, thanks, I’ve considered/tried some.

        They probably ‘harvested’ my phone number from when I paid on the phone – I never gave it to them or consented. I use the BT privacy service but they use several numbers – until I have them all!

        It’s just hassle I don’t need, wasting time dealing with them directly or wasting my time making complaints.

        And contrary to what we are told, although I have never switched, other than DDebit saving, because of my single-fuel low use profile, I can’t save by switching other than peanuts – and I’m sure in a year or so smart meters will be made compulsory (with a few minor exceptions).

  14. Kenm permalink
    November 24, 2018 4:23 pm

    Only one winner the energy companies will they pass on saving’s by not having to send meter
    Reader out, l bet they will not,if l was told that if
    I spend over £300 pounds to save about £11 pounds a year this sounds about right for a government plan always ends up costly
    Fiasco.

  15. Kenm permalink
    November 24, 2018 4:56 pm

    Yes this was a EU directive Germany and France said it would cost to much to
    To carry out but Ed milliband as energy minister in the labour government went ahead with it, we had a choice the EU
    Said it was the countries own choice to go ahead with this crazy ,costly roll out.

  16. Yvette Taylor permalink
    November 24, 2018 9:49 pm

    Again the Government can’t see the Wood for the Trees. I knew that this wouldn’t work for 2 reasons. 1, you can’t change supplier. 2, the metres will need reprogramming for each tariff. A lot of money for the Public to think about.

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