Sunday 30 April 2017


Six million smart electricity and gas meters installed in homes since 2012 may have to be replaced to make them work with a new communications network which was switched on in November but is still not being used. Despite that energy companies are busy installing more of them to try to meet a government target to get one in every home by the end of 2020.

All the meters installed so far are an early design called SMETS1. They use existing mobile phone networks and the communications system is specific to each supplier. That means if you switch your fuel provider to get a cheaper deal – it is Government policy that you should – then the smart meter will almost certainly go dumb. Then it has to be read manually either by the householder or a meter reader. Some people have complained that reading a dumbed down smart meter is much more difficult than reading a traditional meter designed to be read by a human. Instead of a visible dial with numbers turning round buttons have to be pressed in the right - and forgettable - order. 

The upgraded smart meters – called SMETS2 – have been delayed partly because a new £3 billion communications network was not ready for nearly a year after the planned date. It went live in November 2016. But five months on energy suppliers are still testing it with the new smart meters. They had to be extensively redesigned after security concerns and discussions with GCHQ. If all goes well fitting the new meters will start later in 2017. Those meters using that network should be able to work with all suppliers and allow switching supplier to be easier and quicker. 

But the Data Communications Company, part of Capita which is responsible for the new network, could not tell me when or indeed if the old SMETS1 meters would be connected to it. A spokesman told me that the consultation on how that might be done had not even begun. He said it would “go live in the next few weeks”. The consultation that is. He could not confirm a date for the start or the end of that consultation still less for when SMETS1 meters would be connectable or indeed if that would ever happen. He agreed it was possible that SMETS1 meters would have to be replaced with SMETS2 meters.

He repeated that to a Money Box colleague the next day. But when asked if he would confirm it in writing all DCC would say was “DCC will be consulting with industry on plans outlining how SMETS1 meters will be enrolled into the network.” And he stressed the word 'how'. The Department for Business, Energy, and Industrial Strategy (BEIS) would not deny that there may be problems but told us "The project is on working out how they will be enrolled into the new network not whether they can be enrolled. Our expectation is that all SMETS1 meters will be enrolled into DCC."

Others are not so convinced. Technology consultant Nick Hann, who was involved in early designs of smart meters, told me on Money Box on 29 April.

"It is something that the industry has been very aware for three or four years. The new SMETS2 meters are far more complex and there's always been a question of whether it's possible to upgrade the existing ones. But it is one of those things that everyone has been desperately hoping we can magically wave a wand and all the old ones will start working. It now looks as if reality's starting to bite and people are beginning to think that may not be possible."

The ambitious programme to replace more than 50 million gas and electricity meters in every home is expected to cost at least £11 billion. By the end of 2016 around five million had been installed, nearly a million of those in the final quarter of 2016. Today the number is probably over six million. The remaining 44 million should be replaced by 2020 which will mean trebling the current rate of installation. 

If all the SMETS1 meters have to be replaced or modified that will add to the cost and increase the timescale. Nick Hann said it might add 50% to the costs and call the viability of the whole project into question.

Meanwhile the energy companies are busy encouraging people to accept smart meters – all of the old type – without any clear idea when or if those meters will make use of the new DCC network. Energy companies are not informing customers of these potential problems. And nor is Smart Energy GB which will spend nearly £50million in 2017 telling us all that smart is the way to control dumb old 'gas and leccy'.

Read my updated blog on the smart meter project with links to the Cost/Benefit Analysis 
Listen to Nick Hann's interview on Money Box.

1 May 2017
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