Last week the British Infrastructure Group (BIG), comprising 93 Members of Parliament and the House of Lords, delivered a devastating report on the British Smart Metering Project. Titled “Not So Smart”, their headline assessment is that it is a “roll-out which is set to become yet another large scale public infrastructure project delivered well over budget which fails to deliver the expected benefits.”
It is very gratifying to see the issues I’ve been writing about for the last six years confirmed. In the past, the energy industry and civil servants have succeeded in pulling the wool over the eyes of various Parliamentary Committees, who, lacking adequate technical expertise, have simply repeated the mantra that the project is more or less on track. The British Infrastructure Group have cut through that obfuscation. In their summary they suggest that the average consumer saving will be reduced to just £11 per year.
Whilst I applaud this report, I fear that the group members may still be wearing their rose-tinted ermine. Their conclusion about the reduced savings comes from looking back at BEIS’ numbers from 2016. If you look forward at the additional problems and costs which are still in the pipeline it becomes clear that the GB Smart Metering programme is no longer financially viable. Rather than a saving of £11 per year for each household, it’s more likely to result in an increase in annual energy bills of £67 for the next decade. With the publication of this report, the last vestiges of BEIS accountability have been ripped away.
What do you do when your smart metering plan isn’t working? Looking at the efforts of Smart Energy GB, who are tasked with persuading the nation to install 50 million smart meters which aren’t really fit for purpose you do two things:
The particular advert I’m talking about demonstrates one of two things – either that Smart Energy GB are lying through their teeth, or they can’t add up. Although given the sad history of this program, there’s a fair chance it could be both.
That’s right. Britain’s smart meters are now officially the most expensive smart meters in the world. For those of you who have not been following the story, let me provide a brief précis. Back in 2010 the Government mandated that every home in Britain should have a smart gas and a smart electricity meter by 2020. Instead of using off the shelf smart meters, they decided to design their own. DECC worked with some vested industry interests to do a classic Government IT committee job, producing the most complex smart meter specification the world has seen. That design was called SMETS1 – short for Smart Metering Equipment Technical Specification. Not only was it the most expensive, but it was also insecure. When GCHQ looked at it and considered the potential implications of connecting it to our national infrastructure they demanded a redesign, resulting in the SMETS2 specification. SMETS1 meters look as if they won’t work with the SMETS2 software infrastructure, so any SMETS1 meters already installed will probably need to be replaced. Throughout this fiasco, the Government has not relaxed its requirements for every home to have a smart meter fitted by 2020, which means fitting around 50 million new meters.
Which brings us to today. The SMETS2 meters are enormously complex and are pushing the limits of the industry to design them. With the 2020 deadline barely 30 months away you’d hope that the bulk of them would be fitted by now. But I’ve just been talking to contacts in the industry who have told me that currently there are only around 80 SMETS2 meters fitted. Do the sums based on what has been spent so far on the GB smart Metering programme and you’ll find that it equates to around £28 million for each of these meters. It is an obscene example of a Government IT project going wrong. But it gets worse. Not only will the overall project cost consumers around £12 billion, it has the potential to destroy Britain’s leading position in the development of the Internet of Things. It also seems to be exerting a curse on any Government minister involved in the project, with Amber Rudd, our former Minister for Technical Illiteracy the latest to feel its effect.
This evening, the BBC’s Watchdog Live programme did a follow up to its previous investigation on fires that have potentially been caused by poorly executed installations of smart meters. Since the original investigation they’ve been contacted by more people affected and tonight showed the devastating consequences for two families, whose homes had been gutted by fire – one from a faulty gas meter installation, and the second attributed to a faulty electricity meter installation.
The fact that 20 million smart meters may need to be replaced may sound bizarre, especially given the fact that so far only around eight million have been installed as part of the GB Smart Metering deployment, but unfortunately it looks as if it could be true. It’s yet another indication of the scale of mismanagement within this programme, which reminds you of a line from Steve Aylett’s “Bigot Hall” – “Ignorance run like a well-drilled army”. Ministers and civil servants are trying to deny the fact, but the project is starting to unravel. Unless it is cancelled, the only thing it will produce is an inexorable rise in consumer bills as energy companies install wave after wave of obsolete meters.
BEIS (the Department for Business, Energy and Industrial Strategy), which gobbled up DECC last year, has been trying to assume a brave face, using their PR mouthpiece – Smart Energy GB, to put out the message that everything is going well in the world of smart metering. However, there has been a growing number of questions being asked. The national press is regularly reporting cases of dangerous installations which have caused fires, smart meters which don’t work and cases where consumers are receiving bills which are vastly more inaccurate than from their old dumb meters. The trade press has highlighted other issues – notably concerns about a lack of experienced installers and the more important questions about whether the current smart meters will need to be replaced.
The need to replace the meters currently being installed is a question that the industry has been keen to sweep under the carpet. Cracks started to appear in that approach at the end of April, when the DCC – the company run by Capita and which will receive data from the smart meters finally admitted to the BBC’s Money Box programme that none of the six million smart meters that had then been installed were likely to work with its software. If that is true, it means they will need to be replaced. It’s the first time that anyone involved in the project had been prepared to break rank and admit the truth. Within the industry, it’s been a well-known fact that the meters currently being installed are obsolete and likely to need to be replaced, but like the story of the Emperor’s new clothes, no-one has dared to point out that the whole programme is built on a succession of fictions, lest it all comes toppling down. What no-one is yet admitting, is that these numbers may just be the tip of the iceberg. The final count could well be over 20 million.
BEIS (the Department for Business, Energy and Industrial Strategy) have just released their long overdue assessment of the cost of the country’s smart metering program. Hidden among the figures is the amount of money that they have spent. So far, they have squandered £450 million on the project, despite the fact that not a single compliant smart meter has been installed in any house. By a strange coincidence, that’s exactly the same amount as the shortfall in BHS’ pension fund which occurred when Philip Green flogged off BHS.
The £450 million hole in the BHS pension fund had MPs baying for Philip Green’s blood, threatening to remove his knighthood and demonising him in the press. The £450 million expenditure by BEIS on civil servants and consultants, with nothing to show for it, has elicited virtually no reaction from Parliament, yet it will end up costing the taxpayer far more.
Let me reiterate this, as it is truly shocking. Over the last six years, DECC, BEIS and Smart Energy GB have spent £450 million on consultations, developing specifications, fighting Freedom of Information requests and spinning PR stories, yet we have not had a single smart meter installed which conforms to their specifications. Isn’t it time that Parliament stops fuming about super yachts and calls BEIS to account? Not least, because the latest report from BEIS shows they can’t even manage simple arithmetic.