Cost fears hinder smart meter rollout

The government has again delayed a decision on the future of smart meters, amid concerns that a nationwide rollout will cost up to four times more than energy industry estimates.

The Department for Business, Enterprise and Regulatory Reform (DBERR) was due to respond last month to a consultation on metering and billing conducted for the energy white paper released in May last year, but has yet to do so.

The industry says that rollout will cost between £5bn and £10bn, but DBERR figures suggest the price will be £10bn to £20bn over 30 years.

The government expects to respond some time this month, but needs to be absolutely sure of getting this right, according to DBERR.

“We are still consulting on whether or not there is going to be a rollout,” said a spokeswoman.

“It is beneficial to the energy companies to have smart meters, so their estimates may be more favourable than ours. We have to be more conservative.”

Utility firms are still waiting for government commitment and they cannot move forward without a mandate, said Russell Hamblin-Boone, director of corporate affairs at the Energy Retail Association (ERA).

“It is disappointing that the government was unable to make an announcement in March,” he said.

“We are encouraged by recent statements that the government is committed to a rollout of smart meters. But until we receive clear direction in the form of a mandate it is not possible to progress the planning stage that will be crucial to successful installation.”

Collaboration between the industry and government is essential, according to EDF Energy, which starts new smart meter trials in the next few weeks as part of the Energy Demand Research Project (EDRP), a pilot scheme in conjunction with Ofgem and DBERR.

“To enable a robust and effective early rollout of smart metering in the UK within the next 10 years, we must work in partnership with the government, the regulator and the ERA to establish the basis for a legal structure and framework,” said Ashley Pocock, EDF Energy director of home technology.

E.ON is also running a trial under EDRP and will provide electricity meters to 7,000 customers, while 5,500 will also have a gas meter.

“If you give people information, it has an impact on their energy use,” said a spokesman for E.ON.

“We want our customers to use less energy, and smart metering is a key way to help reduce our customers’ impact on the environment and help us provide accurate bills.

“Like everyone else, we are expecting a decision on how smart meters will be mandated.”