The smart meter rollout deadline could be extended to 2024, the Department for Business, Energy and Industrial Strategy (BEIS) has announced.
Initially suppliers were given until the end of 2020 to make all reasonable steps to offer every home a smart meter, a target which has looked increasingly impossible over the past few years.
In a consultation released today (16 September) BEIS proposes to introduce a monitoring framework period from 2021 to 2024. During this time milestones would be introduced, with the achievement of a minimum smart meter coverage of 85 per cent at the end of the framework period.
BEIS says this would be expected to deliver an additional net benefit of around £1.5 billion compared to a “do nothing” policy where the New and Replacement Obligation (NRO) is the sole obligation on energy suppliers relating to the installation of smart meters.
The department added that it is the government’s view that relying solely on the NRO implemented on 30 June this year would be “insufficient to deliver a market-wide rollout in a timely manner that supports the transition to a smart energy system”.
Consumer body Citizens Advice has previously called for the deadline to be extended until 2023.
Responding to the announcement Gillian Guy, chief executive of Citizens Advice, said: “Extending the smart meter rollout deadline is a common-sense move that is good news for consumers. It’s been clear for a long time that the 2020 deadline wouldn’t be met and today’s announcement finally recognises that reality.
“This new deadline gives suppliers time to fix ongoing technical problems and make sure customer service isn’t sidelined as the rollout continues. We’ve seen some energy companies use aggressive techniques to try to persuade people to have smart meters fitted as soon as possible to meet the existing timeline.
“It’s also apparent that the cost of the rollout is escalating, and the public is picking up the tab through their energy bills. People will still benefit in the long run, but today’s cost-benefit analysis shows focusing on speed hasn’t worked.
”We are pleased the government is extending the deadline to ensure the benefits for consumers are delivered.”
Energy UK’s chief executive, Lawrence Slade, said: “Smart meters are essential if we are to deliver the flexible energy system that will help us to achieve our net-zero target by 2050, so we welcome greater clarity on the post-2020 policy landscape.
“Suppliers have been working tirelessly to meet the 2020 deadline and offer all households a smart meter so that as many customers as possible can benefit by saving energy and money – as millions of smart meter owners have already reported.
“The energy sector is committed to working with the government and other partners to complete the rollout so we will now consider the proposals in detail to ensure they are deliverable and do not place unreasonable costs on consumers.”
Meanwhile Robert Cheesewright, director of corporate affairs at Smart Energy GB, said: “We welcome government providing a clear timetable for this. The financial and environmental benefits for households and the country far outweigh the costs by billions of pounds.”
According to the latest figures from the Smart Data Communications Company (DCC) two million second-generation (SMETS2) smart meters are now operational.
The latest from BEIS reveal 14.9 million smart meters were in operation in the UK at the end of Q2 2019.
Last year a report released by the National Audit Office (NAO) warned that the government’s ambition of offering a smart meter to every home by 2020 will not be met, while the cost of the rollout will likely “escalate beyond initial expectations”.
The government also “underestimated” how long it would take to implement the infrastructure of SMETS2 smart meter devices, according to the spending watchdog.
Operational issues have plagued the rollout from the beginning, with some first-generation (SMETS1) devices losing their smart functionality when customers switch suppliers – an issue being rectified by the DCC.