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Energy Smart Meters

Published Friday, October 20, 2017

Between now and 2020 more than 50 million new energy ‘smart meters’ are being rolled out to 30 million homes and smaller non-domestic sites in Great Britain.

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Between now and 2020 more than 50 million new energy ‘smart meters’ are being rolled out to 30 million homes and smaller non-domestic sites in Great Britain. These energy 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. Since 2009, the Department for Energy and Climate Change – now the Department of Business, Energy & Industrial Strategy – and Ofgem have been working on a rollout programme.

The rollout only applies in Great Britain as Northern Ireland has a separate energy market from the rest of the UK.

The rollout is composed of two stages – the Foundation Stage and the Main Rollout Stage (also referred to as the Installation Stage). The Foundation Stage ran from 2011 to 2016 and was designed as a transitory phase during which the Government set the regulatory and commercial frameworks and for suppliers to start rolling-out the early version of energy smart meters.

The programme is currently in the Main Rollout Stage which is due to end in 2020 but it is facing delays when it comes to rolling-out the second generation of meters. As a result, the early version of meters is currently still being rolled-out. This may continue until July 2018 .

A new communications network infrastructure is being built for energy smart meters, through the Data Communications Company.

Ofgem considers that energy smart metering could “transform how energy markets operate”.   The Government’s most recent cost-benefit analysis estimates that by 2030, the rollout of smart meters will have delivered about £5.8 billion of net benefits to consumers, energy suppliers and networks, which are offset by approximately £11 billion of total costs.

Potential benefits of energy smart meters are that they make energy visible to customers in near-real-time; thus enabling them to change their consumption. This in turn helps with demand management and ensuring security of supply. However, evidence from behavioural research suggests that influencing consumer understanding and behaviour around smart meters is an important part of any rollout process.

The same research has often concluded that public authorities have a role in making sure that consumers are engaged through marketing, education and information campaigns. Smart Energy GB was commissioned by the Government with responsibility for promoting and explaining the national rollout to consumers.

Customer concerns regarding energy smart meters include data protection and privacy, connectivity in areas with low or no mobile coverage, installation visits and doorstep selling, health concerns, disconnection of prepayment meters, and the ability to switch supplier and keep the ‘smart functionality’. These concerns are addressed in details in this briefing paper.

The National Audit Office and several select committees have raised concerns about the ambition of the programme, its risks and the extent of the potential benefits to consumers. Most recently, the Science and Technology Committee published a report on the smart meter rollout in which it stressed that energy smart meters alone would not lead to energy savings without “a programme of user engagement before, during and after installation”.

Nevertheless, the rollout is going ahead at a substantially increased pace with a 288% increase of domestic installations between 2015 and 2017. Government data shows that as of June 2017, nearly 7.7 million smart meters have been installed in homes and businesses.

Commons Briefing papers CBP-8119

Authors: Jeanne Delebarre; Sarah Barber

Topics: Companies, Consumers, Energy, Utilities

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