House of Commons Library

Energy Smart Meters

Published Monday, October 7, 2019

Between now and the end of 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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Background

Energy smart meters are advanced electricity and gas meters which can offer a range of intelligent functions. The Energy Act 2008 gave powers to begin a smart meter rollout. Since then, successive Governments and Ofgem (the energy regulator) have been working on a rollout programme (this only applies in Great Britain as Northern Ireland has a separate energy market).

The Government have committed to offer more than 50 million energy smart meters to homes and smaller non-domestic sites in Great Britain by the end of 2020. Energy suppliers have a legal requirement to take all reasonable steps to install smart meters for their customers by this deadline. Due to rollout delays, the Government has proposed introducing a new obligation to 2024 that would apply after the current duty ends.

The Roll Out

The smart meter rollout began in 2011. Until recently the only type of smart meter being rolled out was the SMETS1 specification, which has caused some interoperability problems when consumers switch supplier. Suppliers should now be installing the more advanced SMETS2 meters, though there have been delays to the SMETS1-2 switch, and there are reports that ongoing problems with the infrastructure mean that some SMETS1 are still being installed. The SMETS2 meters are using new infrastructure, provided by the Data Communications Company. Eventually, the Government want SMETS1 meters to also be using this infrastructure.

The latest Government data showed that by the end of June 2019, 14.9 million smart and advanced meters were operating across homes and businesses, leaving the vast majority still to install.

Benefits and concerns

The Government’s 2019 cost-benefit analysis estimates that by 2034, the rollout of smart meters will have delivered just under £6 billion of net benefits to consumers, energy suppliers and networks, made up of £19.5 billion of benefits offset by approximately £13.5 billion of costs.

Smart meters are intended to have benefits for consumers, suppliers and networks. For consumers, smart meters could provide more accurate bills, easier switching, clearer energy use through an in-home display, and the potential for reduced bills based on reduced consumption. For suppliers, smart meters could mean avoiding site visits (for example to check meters) and reduced customer service overheads due to more accurate billing. For networks, smart meters could facilitate a smarter grid, and the real-time data supplied by smart meters could make balancing the grid easier.

In addition to criticism for the repeated delays to the rollout, there are also customer concerns regarding energy smart meters including 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’.

Commons Briefing papers CBP-8119

Authors: Suzanna Hinson; Sarah Barber; Paul Bolton

Topics: Companies, Consumers, Energy, Utilities

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