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Government set to review smart meter rollout as scheme enters crucial period

The government appears set to re-evaluate its smart meter rollout plans after the Smart Meters Bill committee met to discuss the bill last week.

The Smart Meters Bill 2017-19, which seeks to extend the powers of the energy secretary beyond the current 2020 timeframe, is currently progressing through the House of Commons. Having passed Committee stage recently it is currently at the Report stage and is expected to have its third reading in the coming weeks.

But the government’s approach could change markedly, after energy minister Richard Harrington agreed to annual reviews of the scheme before any potential extension of it.

Statistics reported by BEIS last week revealed that at the end of Q3 2017 around 8.61 million smart meters had been installed in both non-domestic and domestic properties in the UK, a 12% increase on the total figure at the end of Q2.

Those figures mean that around 1.2 million smart meters were installed by the UK’s energy suppliers in the three months ended 30 September 2017.

If this was being funded with Treasury money, the project would have been binned a long time ago

Meanwhile the statistical release also stated there to be around 25.2 million power meters in the UK. Given that the current government approach mandates that all customers must be at least offered a smart meter by 2020, the most recent figures underline the scale of the task at hand.

BEIS has always insisted that the rollout would be slow to start before picking up rapidly in the 2017/18 and 2018/19 delivery years, but it remains to be seen whether the current rate of increase is as required to meet its ambitious targets.

The approach has also fuelled criticism from industry, particularly Centrica who last month slammed the government’s handling of the roll-out for failing to properly control the costs involved.

The British Gas-owner said that the programme was costing it as much as £300 million each year and called on the government to tackle rampant inefficiencies and strict technology guidelines.

Evidence heard by the BEIS select committee late last month backed up Centrica’s claims. Energy UK’s Audrey Gallacher questioned whether the desired timeframe was feasible and Bill Bullen, managing director at Utilita, said outright that it was unrealistic.

The government has responded by attempting to extend its powers beyond 31 December 2020 to 1 November 2023, effectively giving it a further three years to complete the smart meter rollout. While BEIS has insisted that suppliers would be legally required to complete the rollout by the current timeframe, the Bill would extend its powers over the programme.

This has been met by opposition from the Bill committee and specifically from Labour MP Steve McCabe, who has been a frequent critic of the smart meter programme.

Meeting last week for its fifth sitting, the Bill committee discussed – and Harrington agreed – new, annual reviews of the scheme prior to any extension of the secretary’s powers to 2023.

“There is value in routinely taking stock of progress while this continues… I will undertake to include as part of the smart meter implementation programme an annual report to go through progress in these areas formally,” he said. 

McCabe welcomed that concession, adding that as things stand, the rollout was “heading for disaster”.

“Ministers were refusing to review it despite costs escalating by 160% in the last year alone and there appear to be no proper cost controls in place. Although the government have now conceded that a re-evaluation of the programme is required, there are still a number of complex issues the government must iron out if they are to avoid yet further delays.

“I am concerned that this could end up being yet another IT fiasco and it will be consumers who foot the bill. If this was being funded with Treasury money, the project would have been binned a long time ago,” he said.