ECCC: Cost of smart meter roll-out must be controlled

The Energy and Climate Change Committee (ECCC) has warned that there are still several key issues facing the mainstream roll-out of smart meters in the UK.

The committee recognises that smart metering has the potential to bring wide benefits to consumers, energy suppliers and the UK’s energy infrastructure. However, the ECCC has warned that in order to realise the Department of Energy and Climate Change’s (DECC) projected benefits of £6.7 million, the £18.8 billion cost of the scheme must be kept under tight control.

The committee called into question the level of competition in the energy market – a fact that could mean that the costs of the roll-out could spiral upwards as well as consumers not realising the level of projected savings.  

Sir Robert Smith, acting chair of the ECCC, noted that it was also vital that DECC clearly communicates the benefits of smart meters to the public. He said: “It is crucial that the aims and potential benefits of roll-out are clear and that public concerns about smart meters are addressed.” 

He continued: “Positive consumer interaction with smart meters will be aided by the use of In-Home Displays (IHDs). The accurate, real-time consumption and billing data provided by IHDs is expected to help consumers to understand, reduce and alter their energy consumption habits. Thus, we think that households and small businesses should be offered free IHDs.

The committee welcomed the government’s decision to delay the mass roll-out of smart meters to 2014. Smith commented: “It is better to delay installation until consumers can have smart meters that they can engage with straight away rather than risk alienating consumers with initial installation of ‘dumb’ meters.”

The ECCC has also voiced concerns that not enough has been to done to indentify and quantify the benefits of smart meters in facilitating a smart grid system. Smith explained: “Smart grids have the potential to use ‘demand side response’ to smooth out peaks and troughs in electricity supply and demand by encouraging consumers to use less electricity during peak demand times.” 

Paul Davies, Institution of Engineering and Technology’s (IET) head of policy welcomed the report, stating: “The report recommends that the debate around smart metering should place greater emphasis on the wider benefits to the UK’s future energy security. The IET agrees and emphasises the role that households will in future be able to play by voluntarily shifting a part of their consumption away from peak times, facilitated by the smart metering system.

“In its evidence to the Select Committee the IET emphasised that a smart grid is the real prize and that DECC and the industry need to press ahead with developing clear requirements and the detailed architecture specification to facilitate it.”