Britain’s proposed program for a nationwide rollout of smart meters, is challenging and subject to significant uncertainty, according to the Commons Public Committee.
The Committee reported issues around the cost and benefits and the impact on vulnerable customers, based on evidence provided by The Department for Energy and Climate Change, EDF, and the consumer bodies for Citizens Advice and Which?.
There is an uncertainty that all consumers will benefit from having the smart meters in their homes, and the plan is to install around 53 million smart electric and gas meters in all homes and small businesses by 2019, costing approximately £11.7 billion.
The conclusions noted by the Committee include that the costs of the installations will be paid for by the consumers through their energy bills, and the benefits will not be passed onto the consumers in the first instance. At present, there is no clear mechanism to ensure that energy suppliers pass on the savings to the consumer, and the recent track record does not inspire confidence that this will happen.
Competition between energy suppliers is also queried. While the DECC insists competition is the best way to ensure consumers benefit from suppliers’ savings, past performance suggests that it does not work effectively in this market and should not be relied on to keep prices low.
There are some significant problems anticipated in a number of key areas in the program. Installation of the smart meters may not be welcomed by some consumers, and significant practical difficulties may arise in installing the required data communications service before the planned rollout of smart meters in 2014. The DECC needs to resolve the uncertainties before pursuing the project that involves spending such a substantial amount of money.
There are issues around cyber security that need to be addressed and steps need to be taken to ensure that people on low incomes and those with pre-payment meters will also see the benefits of smart meters.
“Consumers will benefit from smart meters only if they understand the opportunity to reduce their energy bills and change their behavior,” said Committee chairman Margaret Hodge. “So far the evidence on whether they will do so has been inconclusive. Otherwise, the only people who will benefit are the energy suppliers.