UK.gov's smart meter cost-benefit analysis for 2019 goes big on cost, easy on the benefits

Did someone mention a delay? Rollout given another 4 years as price tag soars to £13.4bn

The UK government has confirmed that electricity suppliers have an extra four years to hit targets for installing smart meters.

The original EU target was 2020, now pushed back to 2024. The appraisal period has also been extended from 2030 to 2034.

The project has been described as "a dog's breakfast" and faced criticism from the National Audit Office late last year for going £500m over budget.

The meters were meant to provide suppliers with accurate and automated readings to help punters reduce energy use and costs. But the original-spec (SMETS1) boxes were often effectively tied to one supplier, reverting to dumb meters if the customer switched.

SMETS2 devices capable of actual smartness and broadcasting usage data were hit by delays and did not become available until July 2017. The second-generation boxes with "In-House Displays" (IHDs), which show energy use in real time, are meant to be the most effective way to change consumer behaviour and reduce overall consumption. The government scheme assumed that this would cut domestic energy use by about 3 per cent.

The Department of Business, Energy and Industrial Strategy (BEIS) also allowed two suppliers to pilot mobile applications in place of IHDs. A third supplier gave up on its project. But BEIS found that the mobile apps were less effective at reducing energy use so it will not reduce the requirements to provide IHDs.

Total costs of the project are also going up – to £13.4bn compared with previous estimates of £11bn.

Problems with the rollout have been well-documented. The Business, Energy and Industrial Strategy Committee warned in February that the government's approach was too passive and relied on hoping that "everything would turn out alright in the end".

TechMarketView managing partner Anthony Miller commented with tongue firmly in cheek: "I'm shocked and horrified. When the government set out a plan to replace every single gas and electricity meter in the land by 2020, who would have thought that anything could possibly go wrong? I certainly didn't!"

The cost-benefit analysis is available to download here. ®

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