Smart meter technology

Smart meters are becoming a ‘white elephant’ as costs rise fast

Image credit: DREAMSTIME

The rollout of smart meters in the UK will become “a very expensive IT white elephant” unless costs for the scheme are brought under control according to a Labour MP.

Steve McCabe urged ministers to “show that they haven’t got their heads in the sand” and address concerns over rising costs and the impact on consumers of the programme.

The ambitious project to install smart meters in every home in Britain by 2020 is currently running way behind schedule, with only around 10 per cent of the devices now operational in households nationwide. 

In addition the first generation of devices ceased to work when customers switched their energy supplier, meaning some had to be swapped for older, ‘dumb’ meters, which will in turn have to be upgraded eventually.

McCabe also issued a warning over Capita subsidiary Data Communications Company (DCC), which manages the network connecting smart meters to the business systems of energy suppliers, amid concerns over the financial health of its parent company.

He told the Commons that estimates suggested the cost per household of the rollout has risen from £5 to £13 in only a year.

Centrica estimated the costs were now about £40 for the average household, McCabe said.

“Almost all the large suppliers now say the rising costs of the smart meter programme are one of the main reasons for the rise in customer bills,” said the Birmingham Selly Oak MP.

“Of course, were Capita and the DCC to find itself in financial trouble, something that was ruled out at the committee stage, that would have very serious implications for who would pick up the tab.

“Obviously, if the costs of the rollout continue to increase and visible benefits decrease, this could become a very expensive IT white elephant.”

The Government would intervene “if the costs to the customer are rising beyond what is reasonably acceptable”, said McCabe.

“How much higher does it have to go before it’s not acceptable,” he added.

“At that point, who pays? Will it be the taxpayer? Well of course, but they are also the customer.

“There’s still time for ministers to show that they haven’t got their heads in the sand over this programme.

“There’s still time for this Bill to be improved and concern for the rising costs and the impact on consumers to be taken seriously.”

His comments came as the Smart Meters Bill passed through the Commons, with the Bill set to undergo further scrutiny in the Lords.

McCabe said he hoped peers “would look seriously at the risk of a technology white elephant, outrageous rises in energy bills and the risk of a failed smart meter programme”.

Last year E&T looked at what it would take to slow the rollout of smart meters while their technical shortcomings are worked out. 

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