House of Commons Library

Energy Smart Meters

Published Tuesday, September 4, 2018

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. This Library briefing covers information on smart meters, consumer benefits and concerns, and evaluations of the roll-out.

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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 roll out. Since then, successive Governments and Ofgem (the energy regulator) have been working on a rollout programme.

Between now and 2020, the Government plan to roll out more than 50 million new energy ‘smart meters’ to 30 million homes and smaller non-domestic sites in Great Britain. The rollout only applies in Great Britain as Northern Ireland has a separate energy market.

The Roll Out

The smart meter rollout began in 2011 and is due to end in 2020. Until recently the only type of smart meter being rolled out was the SMETS 1 specification, which has caused some interoperability problems when consumers switch supplier. Some suppliers are now installing more advanced SMETS 2 meters, with a deadline for a full switch over to only SMETS 2 meter installation planned for later in 2018. The SMETS2 meters are using new data infrastructure, provided by the Data Communications Company. Eventually, the Government want SMETS1 meters to also be using this infrastructure.

There has been concern that the 2020 deadline will not be met. The latest Government data showed that by the end of June 2018, 12 million smart meters were operating across homes and businesses, leaving the vast majority still to install.

Benefits and concerns

The Government’s 2016 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.

Smart meters are intended to have benefits for consumers, suppliers and networks. For consumers, smart meters should 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 should mean avoiding site visits (for example to check meters) and reduced customer service overheads due to more accurate billing. For networks, smart meters facilitate a smarter grid, and the real-time data supplied by smart meters should make balancing the grid easier.

Commons Briefing papers CBP-8119

Authors: Suzanna Hinson; Sarah Barber; Paul Bolton

Topics: Companies, Consumers, Energy, Utilities

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