Smart meters will benefit suppliers nearly twice as much as consumers in terms of cost savings, according to an assessment by the late Department for Energy and Climate Change.
The government's £11bn smart meter project will require energy suppliers to offer 53 million meters to homes and small businesses by 2020. Smart meters are being rolled out in two phases.
The mass rollout phase is expected to begin next month, after several major delays. There are now more than 3.6 million smart meters in operation.
A Parliamentary Science and Technology Committee “evidence check” of smart meters noted that "although the scale and durability of such savings is contested and it would appear that the rollout could alter consumption levels by 2–3 per cent.”
DECC's assessment of the cost savings, contained in the evidence check, found that overall consumers in the UK would save £4.3bn, while suppliers would save nearly £8bn by cutting site visits and reduced inquiries.
Nick Hunn, CTO of WiFore Consulting, told the committee he was sceptical of the extent to which consumers will change their behaviour for a relatively modest financial reward, arguing that “£26 a year or 7p a day is not a big incentive”, and that “there are far cheaper ways of achieving savings”.
The government has pegged the overall cost benefits at £17bn, which will also include network benefits such as reduced outage notification calls, fault fixing; generation benefits, and reduction in CO2. However, the committee criticised the smart meter rollout for having too many objectives.
"The government should be clearer about the primary purpose of smart metering and use this to drive evaluation of the project. Taking this approach will help make future evidence check statements clearer,” it said.
It also said the government needs to do more to communicate the national benefits of smart metering alongside the potential cost savings and efficiencies for individual consumers. The impact of smart meters will be limited without this support from installers and Smart Energy GB, the public engagement body for the programme, according to the committee.
Rob Smith, head of policy and public affairs at Smart Energy GB, has also warned that the programme will only succeed if people are made aware of the benefits.
The report also found "unwarranted concerns in media reports" about smart meter security could diminish public trust in the programme. It said further efforts may be necessary to convince the wider public that smart meters are secure.
It added: "We were assured that consumers will own their data and be able to decide who can access it. Wider questions about processes for anonymisation and the ethics of data usage and consent will need to be considered carefully by the Data Services Ethics Council being set up by the Government following our big data dilemma report." ®
The Department for Energy and Climate Change was merged into the Department for Business, Energy and Industrial Strategy after Theresa May became prime minister in July 2016. The assessment referenced by the Science and Technology Committee was written before the change in government.