By Jonathan Briggs, Innovation Strategy Manager, Gentrack
The UK is rolling out smart meters…still
I had my first taste of the Government mandated initiative to roll out smart meters back in 2016, as Business Architect on one of the traditional big six’s smart programmes. Yet, data from September 2021 shows that the UK is still only at around 47% smart and advanced meter penetration, despite last year being the biggest yet for meters installed.
It can’t be denied that the lockdowns of 2020 had a hugely negative impact on the rollout plans, but we can’t allow that to cloud the fact that the programme has been plagued by delays since the start. From technical delays to negative press and the resulting challenges in getting consumers to actually have smart meters installed, the rollout has struggled to hit targets. Had the original date for completion of the programme been achieved, the vast majority of customers would have had smart meters installed well before the pandemic hit.
A new target framework; needle moving or pure optics
A recently announced 4-year targets framework from the Government is now hoping to give the rollout programme a new lease of life, with a revised deadline of 2025. The key change in the legislation is move to individual annual installation targets for suppliers, on a trajectory to 100% coverage. This toughens up the previous approach to targets, where suppliers submitted annual milestones under the “all reasonable steps” obligation to meet the market-wide smart metering programme.
But how much difference will this really make? My big concern is that this new framework does not address the fact that the largest part of the challenge in actually getting meters on the walls in homes and small businesses remains predominantly a supplier problem; all the pressure and workload stays firmly in their court. Amending the approach to reporting or target setting doesn’t get the root cause of the problem. At the end of the day, Consumers can still simply say no – as they have been for the last 10 years
Is 100% smart penetration achievable without a mandate?
It still seems contradictory and illogical that such a vital infrastructure program can mandate suppliers to fit smart meters while in parallel allowing consumers can choose whether or not to have one fitted. While some people may argue that is the correct approach is to allow consumers choice, and that suppliers are best placed to help customers understand the benefits of having a smart meter, will it result in a successful rollout?
I am reminded of a talk I attended a few years ago, where the programme manager for Estonia’s national energy data platform highlighted the success of their smart rollout as a key enabler. While significantly smaller in number of installs, the audience were impressed with the speed and efficiency of the rollout and the question was asked how they managed it. It was simple, their Government told everyone they had to have one.
Should we really leave such a vital decision to consumers?
Smart meters are, in the Governments own words, “a vital upgrade to our national energy infrastructure and underpin the cost-effective delivery of the Government’s net zero commitment”. Allowing consumers a choice over whether to have a smart meter leaves me concerned that it will be difficult to convince many consumers to voluntarily have a new meter fitted no matter what innovative tariffs and products come to market. A survey from MoneySuperMarket in August 2021 found that only 43% of customers who had a smart meter fitted believed it was worth it, while 24% of billpayers did not think that the smart meter rollout had been worth it. While recent price rises might offer opportunities for suppliers to push positive messages around the energy saving benefits of a smart meter, the price rises are just as likely to create further distrust and frustration with the energy industry, resulting in negative or neutral impact on the smart rollout.
It strikes me as incredibly risky to leave vital infrastructure to consumer choice and fundamentally, there is a concern that some customers could ultimately be penalised for not having a smart meter, either through higher prices or lack of access to future products and services. There’s also a concern about the potential for further delays, or the continued low take-up of smart meters impacting on the UK’s commitment to net zero, given the vital importance of smart meters in the delivery of that commitment.
All of which makes me question, why not simply mandate them for all? At this critical point, here at Gentrack, we believe Government must take bold action to accelerate the uptake of smart meters. A majority smart energy system will then enable Half Hourly Settlement and the mass uptake of flexible products and services, ensuring that no customers are left behind. Mandating the rollout for consumers would be more cost effective for suppliers, enabling them to optimise their field forces and remove the burden of responsibility to convince customers to have a smart meter fitted (in an already low trust environment). But perhaps most crucially it would empower the energy industry and all of us as consumers to fully focus on the burning issue of reaching net zero faster and more effectively.