Smart meter value eroded by tech issues

A report from the National Audit Office (NAO) has found that energy suppliers are not meeting existing demand for smart meters.

While smart meters offer the potential for the National Grid to identify outages and faults, and help the grid cope more easily with peaks in demand, the organisations the NAO spoke to in January 2023 admitted their ability to fully benefit from smart meter data was limited by lower-than-expected smart meter coverage. Some reported they could not always reliably access the volume of data they need from the central platform service, which collects smart meter data.

Among the problem areas listed in the NAO’s Update on the rollout of smart meters report are that some of the meters are still waiting to be commissioned, while others are experiencing communication issues. The report’s authors wrote: “Stakeholders also told us of their concerns that the target framework incentivises suppliers to prioritise installing new smart meters, rather than fixing issues with previously installed smart meters.”

According to data from the Department for Energy Security and Net Zero (DESNZ), around three million smart meters – 9% of the total currently in use – are operating in “dumb mode” rather than “smart mode”, which means they are unable to send energy use information to suppliers. Some may not be able to display energy use on consumers’ in-home displays. The NAO said there was scope for suppliers to improve their performance given the progress some have made.

First-generation smart meters (SMETS1) do not retain smart functionality when a customer switches supplier. As of 5 May 2023, according to the NAO, around four million first-generation smart meters had not yet been migrated onto the central platform service, which ensures the meters maintain smart capability even after a supplier switch.

Smart DCC, a subsidiary of Capita, holds the current central platform service licence. The report noted that in September 2022, Smart DCC told DESNZ that technical limitations meant it may not be possible to migrate more than 500,000 first-generation meters.

The NAO report also listed energy regulator Ofgem’s concerns that the central platform service was too focused on supporting future services rather than ensuring its reliability. “Some stakeholders told us that, at times, they found the service was unreliable and were not able to achieve their expected benefits from the system,” the report stated.

The NAO identified ongoing costs as a possible concern going forward. “Suppliers we spoke to told us that the cost-benefit analysis did not include all the additional costs suppliers will need to incur to ensure smart meters continue to function during and after the roll-out, such as additional home visits and communications hub replacements in the south and central regions when the 2G and 3G networks are shut down,” said the report.