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My Lords, more than 19.3 million smart and advanced meters have been installed in Great Britain as of September 2019. The programme is making progress, with more than 1 million smart meters installed every quarter in 2018 and 2019.
My Lords, anecdotally at least, the system does not seem to be working as well as originally envisaged, particularly with connections to suppliers and moving smart meters when changing suppliers. Given that we are all paying for this with a supplement to our energy bills, could my noble friend assure us that we are getting value for money?
The noble Baroness is correct to state that there have been some challenges in the rollout of the smart meter programme. I will say no more on that particular point, but there is a recognition that smart meters are vital if we are to meet net zero by 2050. They will remove some 45 million tonnes of carbon dioxide by 2034 if they work well, thus also bringing about substantial savings for customers and the nation.
The Minister’s predecessor, the noble Lord, Lord Henley, wrote to me about this in July 2019. He said that the 13 largest energy suppliers had submitted plans to cover the rollout for 2019-20 and that,
“underpinned by a strong evidence base, plans are now in place and define binding milestones that those suppliers will be held to account against in 2019 and 2020.”
Just 18 months since the legislation was passed and seven months since I received that letter, the binding milestones that were in place seem to have gone off again and the target they would have to reach by the end of 2020 has been delayed by four years to the end of 2024. Does the Minister agree that public confidence in the smart meters programme has been badly damaged by the delays and failure of government policy? Can he say what the Government’s current estimate is of how much each household will benefit if and when they get a smart meter 2 that works and is operable? Finally, on a scale of one to 10—popular in the Labour Party these days—how confident is he that households and businesses will have a properly functioning smart meter installed by the end of 2024?
In order, the answers are no, £175 per year and 10—but I think the noble Lord will want a bit more detail than that, so I will give him that. The important thing is that once smart meters are installed they make a significant difference. People begin to understand what they are consuming in electricity and gas and they see it in pounds and pence, not in kilowatt hours, which are more challenging. The rollout has been difficult, because Great Britain’s housing stock is wide and diverse, as is its topography. That has been a challenge as well. We have been trying to ensure that we learn lessons as we go. We will end up by the end of 2020 with some 27 million smart meters working in households. That will be critical.
My Lords, the Minister will be aware that many energy customers discover, on switching energy providers, that their smart meter no longer works with their new provider. Will the Minister tell the House what measures the Government have taken to require energy providers to replace existing non-compatible smart meters, which they seem very reluctant to do? What proportion of installed smart meters are currently estimated to be non-functioning as a result of lack of compatibility?
We need to recognise that when a smart meter stops being smart, it does not stop being a meter. It still records the consumption of gas and electricity, but it stops being able to tell you what exactly is going on.
Sometimes the answer is slightly amusing, I am afraid. In answer to the question about how many such meters exist, out of the current 19.3 million the figure is way too high at 3.1 million. So, moving from SMETS 1 meters, which were the first installed meters, to SMETS 2 is a priority in those areas, and, going forward, the rollout of the second generation, not the first generation, is critical. The key thing, again, is that we are making that progress and we have the commitments to deliver against the targets.
I hope that my noble friend is not losing too much sleep over this, because the prefix “smart”, as far as government policy is concerned, is being questioned across the nation. For example, on reading meters, if we have not educated the last three generations to be able to do a simple multiplication calculation to work out what something times something will mean every quarter, we have seriously failed. Does my noble friend agree that, if people do not understand that to save electricity and gas in their household they simply have to wash on low temperatures and turn the light off when they leave the room, the better policy would have been to have installed slot meters? There is nothing like that to concentrate the mind if you think the electricity is going to go off.
Yes, I agree with all of those things. The smart meter gives you a very visual sign of what you are consuming, and it should be able to highlight when you are consuming at the most expensive part of the day. So, if you are clever and are able to put the two things together, you can reach the point where you make savings as well as reducing carbon emissions.
Is the Minister aware that, although I am not as smart as I used to be, I am still very suspicious of companies whose main aim is to make profits for their shareholders, when they phone or send messages telling you that you are going to save a lot of money by doing what they are doing? Is it not the case that, in almost everything they do when they say that, they are trying to tie you down so that you do not move to another supplier?
A sensible supplier will keep a hold of customers by offering the best quality of service. If they do not, I have no doubt that a smart man such as the noble Lord would move quickly to one that is better for him. The reality remains that there are good commercial enterprises and bad commercial enterprises. Bad ones should suffer and good ones should prosper.
My Lords, I have tried to have smart meters installed both in London and in Wales. In both cases, when the installers arrived, they found that the combination of the meter’s design and the layout of the space made it impossible to install. Would it be possible to consider whether meters could be not just smart but flexible?
I am sorry to heart that unfortunate news about the meters. There should be a pre-screening stage when you fill in a series of questions regarding your house, the thickness of your walls, the location of your meters and so on. That should give the company an indication of whether it can ultimately install them. However, I will look at that again. If it is not working, it should. That is key to making the process of installation work well.