Member News
By Gerrard Clark - 30th June 2011
Plans by the department of energy and climate change (DECC) to install 'smart' electricity and gas meters in all homes in the UK could backfire, a report has warned.
Energy suppliers are obliged to replace around 53 million gas and electricity meters in the UK, costing a total of £11.3bn.
Reporting on the installation programme, the National Audit Office(NAO) found that historically, project costs have escalated by between 10 and 200 per cent. However, the current estimated figure only accounts for a 10 to 15 per cent escalation cost.
According to DECC, consumers with smart meters will consume 2.8 per cent less electricity and 2 per cent less gas annually than consumers without smart meters. Between 2011 and 2030 this will produce an economic benefit of £18.6bn, achieving a net benefit of £7.3bn.
Currently there is no clear message to consumers to encourage them to use smart metering technology in order to reduce their energy consumption.
In the report, 'Preparations for the roll-out of smart meters', published today, the National Audit Office warns that there is "uncertainty over how much, and for how long, consumers will change their energy use and therefore whether the benefits will be fully realised".
The NAO report goes on to caution that "rapid technological change could potentially render some smart metering technology obsolescent".
The department of energy and climate change estimates that it will need to spend £100m on consumer engagement, and that smart meters will have a 15-year life on average. Future technological developments could change the requirements for meter specifications.
Speaking as the report was launched, NAO head Amyas Morse said: "The benefits of proceeding with this major technological and logistical undertaking are still uncertain. There is limited evidence of how much and for how long British consumers' behaviour might change, and costs could escalate.
"The department has more work to do before roll-out starts."
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