The target rollout date for smart meters is to be delayed by four years and the number of smart meters involved has been reduced to 85% of domestic properties.
BEIS says around a quarter of households now have smart meters but initial plans to roll out the meters to all domestic customers by the end of 2020 (later modified to an ‘offer’ of a smart meter to all customers) are set to be abandoned. BEIS is consulting on a new target date and a ‘tolerance’ on the rollout that would mean requiring 85% of meters to be installed by the end of 2024.
Annual obligations will be set separately for electricity and gas meters and will be on a ‘straight line’ basis so companies do not ‘back load’ the rollout to delay costs. But there will also be a mid-period review to allow BEIS to adjust targets against market conditions and external factors.Supliers would alos have flexibility around customer ‘churn’.
BEIS also plans to alter the future allocation of charges for the central DCC. It was due to move from a market-share to an enrolled meter basis for domestic meter points in December 2020. But this change “could unfairly penalise those energy suppliers that have made more progress under the 2020 rollout duty,” BEIS admits. It says there is “a strong rationale for moving to a market-share basis”.
New or fast-growing suppliers may in future be able to join the central Smart Meter Delivery Group.
Performance among suppliers on the rollout is patchy. BEIS analysis shows the slowest suppliers will have just 30% of their smart meters installed by the end of 2019, reaching 50% by the end of 2020. It says the requirement to take ‘all reasonable steps’ to achieve the rollout is now no longer appropriate and instead a licence condition will require delivery of a market-wide rollout as soon as practicable. But BEIS fears that “without further government action investment in the rollout will slow down and it will be difficult to regain momentum.” Smart Energy GB’s latest research suggests that at present only 39% of consumers who do not have a smart meter would actively seek or accept one and BEIS said, “We do not consider that a market-wide smart meter rollout can be delivered solely through consumers actively choosing to accept a smart meter.” It said, “It is therefore important that the Programme’s ambition is set beyond 2020 to enable momentum and that we consider incentivisation of consumer uptake to deliver a market- wide rollout.”
The consultation closes on 11 November .
Further reading
Ofgem warns suppliers to step up smart meter rollout as it admits 2020 deadline is not achievable
SSE pays penalty for slow gas smart meter rollout
BEIS offers £4.4M funding to develop products that help smart meter owners cut power consumption
Smart meter installations slow
Is the aim of the smart meter programme just to save money?
Smart meter installations are slowing, reveals industry data