£11bn ‘waste’ of rolling out smart meters

System

From evidence to the Select Committee:

Q6 Nick Hunn: I think that £26 a year or 7p a day is not a big incentive. Back in 2010, we started to roll out in-home displays, which were much cheaper devices. People could clip them on to a meter. Essentially, they showed the same information—how much energy you were using. You could see that in real time, so people would turn their kettles off. There are far cheaper ways of achieving savings than trying to justify a smart metering programme just on those savings. Some people will do it for 7p a day, but how many people here would change their behaviour to save 7p a day?

Q46 Carol Monaghan: You are saying that potentially we will need a new set of meters to keep up with the technology. At the moment, we have a massive infrastructure project to get the system in place. Who is going to pay for the next infrastructure project to get the next set of meters into position?

Nick Hunn: I have been asking the question and have not had an answer. I was rather hoping that you might have.


Q47 Carol Monaghan: So there is an issue. I suppose there is a danger—correct me if I am wrong—that the cost could end up back at the consumer’s doorstep.

Nick Hunn: Yes. Traditionally we have put in meters, and in theory they have a 25-year life. I know that recently I had a gas meter replaced that had “1935” on it, so meters last a long time. These meters will need to have at least the communications hub replaced by 2025. We are now looking at meters that will need regular replacement, far more so than any meter has in the past. That means extra cost, and it is invariably the consumer who picks it up.


Q48 Carol Monaghan: The £26 saving a year is really not much of a saving.

Nick Hunn: No.

Q72 Graham Stringer: Do you think the assumptions are justified and will be realised?

Dr Darby: On the basis of what we have seen so far, the 2% to 3% savings that were anticipated are being realised.

Pam Conway: We believe that the savings will increase as we develop more sophisticated feedback and tools for customers. There are instances where customers who are really engaged—for example, customers who have spontaneously requested a smart meter—are saving up to 4%.

Nick Hunn: There have been analyses elsewhere—Germany did one—that looked at both having customer input, with in-home displays, and not. They could not find that it was financially positive. In the early days, there was an independent review, commissioned by DECC, that said that the roll-out would not be financially viable. DECC then produced their own numbers, which had the enhanced customer savings, to say that it would. Some freedom of information requests have been put in to find out what the calculations behind those numbers are. I believe they are still being fought.

Q74 Graham Stringer: Is there any clear national benefit to smart gas metering? We are unusual, if not unique, in combining smart gas metering with smart electricity metering.

Nick Hunn: It is very difficult to argue a reason for it. When cooking, you do not decide to turn something down and cook it more slowly in the hope that it might save energy. I do not think that anybody has ever been able to tell me—I have asked the question in DECC—whether it is more energy efficient to cook my roast dinner at a slow temperature than at a high temperature. Most gas boilers are either on or off. There are a few advanced ones that allow you to change the amount of gas. If you want your house to be warm and you want to save energy, get a smart thermostat. The Hive thermostat that British Gas does is brilliant and will save you far more money than a smart meter ever will.

Q94 Matt Warman: Realistically, in 10 years’ time, do you think that one of those first-generation meters will still be considered good enough by the Department, the industry and so on?

Daron Walker: Yes, I think so. As far as the consumer is concerned, the SMETS 1 meter pretty much does everything that a SMETS 2 meter will do. The main difference is around the fact that currently it operates outside the DCC. It has the ability to do time of use and to talk to an IHD. There is the ability to extract data through a consumer access point. All of that is embedded in the first generation of meters. Fundamentally, where innovation will happen is in the home, making use of the data. We do not see massive innovation in terms of the smart metering system itself; it is more about taking the data and innovating with that. The smart meter will be able to send pricing signals inside the home. If you want to sign up to a time-of-use tariff, devices in your home will be able to listen to the fact that the price is different at a given time of day. It is absolutely right that these meters will still be on the wall in 10 years’ time.

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/science-and-technology-committee/smart-meters/oral/33099.html

reeac

Nick_C wrote: »

Because the cost of charging for use makes up a considerable portion of the cost of supply. Charging a flat rate is cheaper for everyone.

Perhaps we should also charge householders by weight for waste disposal. Charge car owners by the number of miles they drive each year. Charge airline passengers by body weight. Charge library users by the book and number of days.

There is no shortage of water in this country, but the cost of supply has become exorbitant.

I'm in favour of simple cheap admin. but it has to be balanced against other factors such as reducing pollution, traffic congestion etc. I think that we all (or most of us) accept that fuel should be charged according to useage not as a flat annual charge. We do that for oil, gas and electricity and also petrol and diesel. Imagine the consequences of changing those arrangements.
I don't know what proportion of water and sewage bills is due to admin. of the metering and billing as opposed to collecting, storing, treatment and distribution but I would expect it to be fairly small. The fact that the water, in the form of rain, is initially free is only a small part of the whole scene.