The smart meter roll-out: Will the 2020 deadline be met?  

50 million energy smart meters are planned to be installed in homes and businesses in Great Britain before the end of 2020. 

Supported by successive governments and envisaged as a key enabler of a future Smart Grid, benefiting customers, suppliers and networks, the roll-out began in 2011 but has faced a number of challenges, including re-occurring delays.  

The Smart Meters Act 2018 received Royal Assent in June 2018 and part of the Act extended the Secretary of State’s powers in relation to smart meters, from 2020 to 2023. The Government say this will allow it to “undertake a review of the whole programme” after the roll-out. However, some have asked: will the 2020 deadline be met?   

Why the delay?

The powers for the smart meter roll-out were first introduced in the UK in the Energy Act 2008. The roll-out is supplier-led, meaning energy suppliers are required to ‘take all reasonable steps’ to ‘offer’ a smart meter to all customers by the target deadline of the end of 2020. Customers do not pay for individual smart meters, but instead the cost of the overall programme is passed on as a levy on bills. Any costs from delays to the roll-out will also likely fall to consumers. 

Originally, the Government intended for energy suppliers to complete the roll-out by 2019, but in 2013 that target was pushed back to 2020 when the industry said it needed more time.   

Additionally, the roll-out was supposed to switch to more advanced meters, known as SMETS 2, in 2014. This was pushed back to 2015 and has since been delayed further, with the less advanced meters, known as SMETS 1, still being installed until October this year. Recently, the Government launched a consultation on pushing the switch over date back a further two months, to December 2018.   

What’s the problem?  

Suppliers are reportedly having issues with a lack of trained installers, and with the data communications network that the new SMETS 2 smart meters should use to communicate. 

Due to be online in 2015, the network eventually ‘went live’ in 2016 but the consultation on extending the deadline suggests further delays are possible, with the Government expressing concern over “the risks of a premature transition”. 

There have also been concerns with the effectiveness of the roll-out to date. Existing SMETS 1 meters communicate via mobile networks. When customers switch supplier, there is a risk the new supplier will use different networks, and the meter will no longer be able to communicate, meaning it can go ’dumb’. This can also happen in areas of poor mobile coverage. The Government eventually want all meters to be returned to ‘smart mode’ by extending the data network to SMETS 1 meters.   

 

What’s the progress?

The latest Government data showed that by the end of March 2018, 11 million smart meters were operating across homes and businesses, leaving the vast majority still to install. The charts below show the installation levels to date, and the amount required over the next two years.

 

Domestic smart meter installations in the UK

 

non-domestic smart meter roll-out

 

The graphs only show large energy supplier installations, as small suppliers report their data less often. The graphs also only show installations towards the target, and do not include meters that have been offered and rejected. They also do not distinguish between SMETS 1 and SMETS 2 meters.

What has Parliament said?

Members of both Houses have not missed this trend. Lord Teverson said, “clearly it is not” possible to meet the target, describing it as “la-la land” and called on the Government to re-plan the target “sensibly”. Former energy ministers Ed Davey MP and Mike O’Brien MP have also critiqued the roll-out in the press.  

A recent report by the British Infrastructure Group, signed by 91 parliamentarians, found that to meet the target date:  

“[Suppliers need to install] almost 1.3 million meters a month. By April 2018, large suppliers were only managing to install around 420,000 each month.  

Although the Group stated support for the smart meters, they called on the Government to review the roll-out, as the deadline would “almost certain[ly]” be missed, and there were possible impacts on the cost and consumer benefits.”   

The Government insist that the roll-out is “on track”. However, it has also said it will fall to Ofgem, the energy regulator, to deal with any failings to meet the target.    

Despite the delays, customers who do receive their smart meter appear to be content. Analysis by the Government published in August 2017, showed that 80% of those who had a smart meter were satisfied with it.    

A report by the National Audit Office on smart meters is expected later this year, as is the Government’s annual report on the roll-out 

 

Further reading: 

Energy Smart Meters, The House of Commons Library. 

 

Suzanna Hinson is a Senior Library Clerk specialising in energy consumer issues and energy production at the House of Commons Library.