Samstag, 21. Januar 2012

UK Smart Meter: £11billion smart meter plan "risks fiasco"

The UK House of Commons Public Accounts Committee published its report on preparations for the UK roll-out of Smart Meters. The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, said:

"The idea of smart electricity and gas meters is a good one, but the programme to install 53 million of them in all homes and small businesses in the country by 2019, at an estimated cost of £11.7 billion, is both challenging and subject to significant uncertainty.

Consumers will benefit from smart meters only if they understand the opportunity to reduce their energy bills and change their behaviour. So far the evidence on whether they will do so has been inconclusive. Otherwise, the only people who will benefit are the energy suppliers.
Consumers will have to pay suppliers for the costs of installing and operating smart meters through their energy bills and no transparent mechanism presently exists for ensuring savings to the supplier are passed on. The track record of energy companies to date does not inspire confidence that this will happen.

The Government is relying on competition in the market to drive down prices. But, as has been previously reported by Ofgem, the energy market does not currently operate as an effective competitive market.

The Department should clearly set out what energy suppliers’ responsibilities will be for engaging with consumers to deliver the benefits of smart meters; and how they will be held accountable to both the Department and consumers.

Furthermore, there are obvious risks in implementing such a large IT project which cannot be ignored. They include the practical difficulties of procuring and installing the data communications service and the security of the information held. The Department must take on board the lessons learned from other large government IT projects to make sure that the system can support smart grids and that extra costs are not passed on to consumers.

Of even more concern is how the programme will affect vulnerable consumers and those on low incomes. Expecting these consumers to pay for smart meters is of itself regressive, and there is a risk that they may end up paying more through their bills where the costs of installing the meters outweigh the savings they are able to make. The Department should set out how it intends to ensure vulnerable and low income consumers do not miss out on the benefits from smart metering.

Smart meters will allow energy companies to disconnect customers without entering the property. The Department must also ensure that there are proper safeguards to protect the vulnerable, elderly and those on low incomes to ensure they benefit from the programme.

Reacting on the report, UK Energy Minister Charles Hendry pointed out that the potential benefits of smart meters are £18.7 billion from an £11.7 billion investment.

Source and further information: UK Public Accounts Committee, DECC,

© UK Parliament, Open Government Licence
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