Energy: Meters

Energy and Climate Change written question – answered on 8th September 2014.

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Photo of David Davies David Davies Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

To ask the Secretary of State for Energy and Climate Change

(1) with reference to the policy document entitled, Helping households to cut their energy bills, supporting pages on smart meters, updated online on 24 July 2014, who receives the benefits of £17.1 billion for the installation of smart meters in homes; and what form those benefits take;

(2) with reference to the policy document entitled, Helping households to cut their energy bills, supporting pages on smart meters, updated online on 24 July 2014, who incurs the costs of £10.9 billion for the installation of smart meters in homes.

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

Smart meters will bring an end to estimated billing, helping consumers to budget better and help make switching between suppliers easier and faster. Domestic and non-domestic consumers will have near-real time information on their energy consumption to help them control their energy use, and avoid wasting energy and money. Smart metering can transform the prepay experience. Topping up a smart meter in prepay mode should become as easy as topping up a mobile phone. New products and services will be supported in a vibrant, competitive, more efficient market in energy and energy management.

Suppliers will have access to accurate data for billing and to improve their customer service. They will also be able to reduce costs, for example by reducing call centre traffic, removing the need for a site visit to read meters and better manage debt.

Energy networks will have better information upon which to manage and plan their activities and smart meters enable smart grids which support sustainable energy supply.

Energy suppliers will be responsible for purchasing and installing smart meters. Energy suppliers and other energy industry participants, such as network operators, will also incur costs as part of upgrades to their systems and for Data and Communications Company services, so that they are able to take full advantage of smart metering.

As is the case with traditional meters, the Government expects that both costs and cost savings as a result of smart metering will be passed to consumers by competing energy suppliers through energy bills. We estimate that this is will result in energy bill reductions as a result of smart metering of £26 a year by 2020, rising to around £43 per household a year by 2030, for the average dual fuel domestic consumer—taking into account all the costs and savings.

The Impact Assessment, updated in January 2014, provides further details of these benefits and costs:

https://www.gov.uk/government/publications/smart-meter-roll-out-for-the-domestic-and-small-and-medium-non-domestic-sectors-gb-impact-assessment

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