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Smart meters

Published Thursday, September 11, 2014

Between now and 2020 more than 50 million new ‘smart meters’ will be rolled out to 30 million homes and smaller businesses in Britain. These are intended to allow consumers to see and adjust in real time what energy they are using. The Public Accounts Committee considers the challenges associated with roll-out 'huge'.

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Between now and 2020 more than 50 million new ‘smart meters’ are being rolled out to 30 million homes and smaller non-domestic sites in Britain. These smart meters, which will include an offer of a free in-home-display for households, are intended to allow consumers to see and adjust in real time what energy they are using.

Ofgem considers that smart metering could “transform how energy markets operate”. The Government estimates that over the next 20 years, the roll-out of smart meters will deliver about £7 billion of net benefits to consumers, energy suppliers and networks. Since 2009, DECC and Ofgem have been working on a roll-out programme.

The National Audit Office (NAO) and the Public Accounts Committee (PAC) have raised concerns about the ambition of the programme, its risks and the extent of the potential benefits to consumers. In two reports PAC considered the challenges associated with roll-out ‘huge’ and the benefits slim. DECC stated in May 2013 that it now expects suppliers to be ready to start their full scale roll-out by autumn 2015, for completion by 2020.

Issues that may be of concern to constituents include the extent to which smart meters will be mandated, consumer protection during the installation process, and concerns about privacy and access to smart metering data. Suppliers must operate in line with an installation code of practice which came into force on 1 June 2013, backed by legislation. Among other things, this bans face-to-face marketing activity of specific products without prior consent during installations, with a complete ban on completing any sales. On data access, energy suppliers will be able to access consumption data on a monthly basis, with a clear consumer opt-out for daily access by suppliers and an opt-in for more frequent access. Concerns have also been raised by some groups about health effects from smart meters.

The licence conditions for the roll-out of gas and electricity smart metering equipment and a code of practice for the installation of smart metering equipment came into force on 30 November 2012. Licence conditions relating to other aspects of the smart metering roll-out including a consumer engagement strategy most of those relating to data access and privacy came into force on 4 March 2013.

Commons Briefing papers SN06179

Authors: Patsy Richards; Mike Fell; Edward White

Topics: Climate change, Electricity, Energy, Energy conservation, Fuel poverty

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