£500 million of forecast benefits out of its flagship £11 billion smart-meter scheme, has been quietly chopped by the Government, and the energy industry tried to bury the news in the aftermath of the US election. When Gordon Brown was the chancellor of the exchequer nearly a decade ago, ministers set out plans to install smart meters in every UK home. Claiming that the roll-out would cost as little at £7 billion, and also that it would save £11.8 billion, including £4 billion in cheaper bills for the users. However, a 12,000-word report (written in August, yet published on the Government’s website just hours after Donald Trump was declared president) from the Department for Business, Energy and Industrial Strategy dramatically reins previous promises. Since the previous forecasts just two years ago, the total costs have shot up by £54 million. Also, benefits are now £415 million lower- just £11 per household in 2020, less than half of the £26 estimated previously. The total value of rolling out smart meters across all UK homes and small and medium-sized businesses is now put at £5.75 billion, as opposed to the previous estimate of £7 billion- or £469 million less than earlier ministerial claims.
Big six providers have seemingly been trying to keep a lid on the diminished benefits. They are also being forced to pay for most of the roll-out, and are using the scheme as an attempt to boost their damaged reputations. In an email seen by the Standard, an industry insider suggested to colleagues, that the figures had been slipped out after the US election “in a very busy news week,” in an attempt to keep them under the radar. The smart-meters work by recording gas and electricity consumption every 30 minutes and they are supposed to be encouraging households to use less energy. The roll-out smart-meters have been the focus of a large publicity drive, with the “out of control” cartoon characters Gaz and Leccy ads being voiced by Sir Bob Geldof.
The public spending watchdog, the National Audit Office, has warned of “significant risks” of the £11 billion smart-meter scheme, including the proposed technology not working in up to a third of the British homes. As there is a string of delays with the scheme’s IT system, designed by outsourcer Capita, major energy providers have demanded that the Government postpone its 2020 installation deadline. It only went live last month, more than a year late. Also, Business Secretary Greg Clark vowed to investigate the claims that energy suppliers are making larger profits that they have admitted. “Smart Meters could save British Households £300 million on their energy bills in 2020. That is just the start – these savings could increase to £1.2 billion in 2030. “This analysis was published as part of the government’s wider vision for a future smart energy system, which was announced in the Secretary of State’s speech at the Energy UK annual conference, a full two days after the presidential election” said Energy Minister Baroness Neville Rolfe.