Smart meter rollout won’t be met as costs set to rise

THE Government’s target of installing smart meters in every home by 2020 will not be met and the cost of the rollout is likely to “escalate” beyond expectations, the spending watchdog has warned.

The National Audit Office (NAO) said the Department for Business, Energy and Industrial Strategy’s (BEIS) latest 2016 estimate that the programme will cost £11bn – the equivalent of £374 per dual fuel household – “underestimates the true cost of rolling out smart meters”, which had since increased by at least half a billion pounds or the equivalent of an extra £17 per household.

Up to 53 million smart meters, which will replace traditional electricity and gas meters in homes and businesses, were due to be installed across Britain by the end of 2020, saving households an average of £18 a year between 2013-30.

However, the rollout has struck a number of issues, with the NAO finding that about 70% of first-generation SMETS1 meters “go dumb” when people switch to a new supplier.

The NAO said suppliers installed seven million more SMETS1 meters than planned after BEIS underestimated how long it would take to implement the infrastructure and technical standards for their secondgeneration successors, with the mass rollout adding to the complexity and cost of the programme.

BEIS planned to resolve the problem by connecting SMETS1 meters to updated infrastructure, but this project had been delayed by six months to May 2019 and the NAO said it was not certain if it would work as intended.

The NAO said the significant delay to the start of the second-generation rollout was increasing the risk of escalating costs and technology being rolled out before defects had been addressed, also warning that it could take years before it was known if it entirely worked.

It also found that installation of SMETS2 meters in the North of England and Scotland was lagging behind the rest of the UK due to problems integrating them with communications infrastructure, with just 3,000 of them in place as of the start of November compared with 106,000 in the rest of the country.