Smart Meters Bill

Lindsay Hoyle Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 5th February 2018 Commons Chamber

[Stephen Kerr]

The hon. Gentleman makes a valid point. The purpose of the Bill, in facilitating the roll-out of smart meters, is to create a more energy-efficient economy, which should be reflected in cost savings for families, individuals and businesses. If that was not to be realised through the smart grid, that would be very disappointing.

There is so much in the future in terms of the changes we are seeing in the economy. I think of ultra-low emission vehicles, where there will be a necessity for smart meters and the smart grid for us to cope with the increased load on the grid. In response to the hon. Gentleman, I hope that somewhere in the not-too-distant future is the promise of an energy market that is more competitive and more responsive to its customers’ energy requirements.

Mass usage of ultra-low emission electric vehicles is inevitable. We will get to a tipping point with those vehicles, on account of the cost per unit, improvements in battery technology and the visible availability of the necessary infrastructure for charging at home and recharging away from home. All those things will create new demands on the grid, and all the flexibilities we will need to meet those demands depend on the smart grid and smart meters. Things such as new tariffs, variable tariffs and smart devices that can interact on the basis of the smart grid will all be a feature of the future.

However, there are things referenced in the new clauses and amendments that concern me. We heard evidence in the Public Bill Committee from Dr Richard Fitton of the University of Salford, who is responsible for a task group for the International Energy Agency on the use of smart meter data for determining the energy efficiency of properties. He made the point that for consumers to be fully engaged with smart meters, they need to be able to log on to the smart meter and connect it to smart devices in and around the home. He described the frustration that he and his team of experts have had in being able to make that connection happen. He said:

“a magic black box called the consumer access device…streams real-time data to things such as smart appliances and smart heating systems for homes.”––[Official Report, Smart Meters Public Bill Committee, 21 November 2017; c. 48, Q94.]

He went on to say that neither he nor any of his colleagues had ever been successful at connecting SMETS 2 meters to those devices. That is a concern, but it is not directly related to the amendments, so I will return to them.

There is evidence about the impact of smart meters on consumer behaviour. The literature produced by the Department talks about how these meters will facilitate switching. In fact, all the evidence that the Business, Energy and Industrial Strategy Committee and the Public Bill Committee received suggests that smart meters probably will not have a direct impact on the rate of switching in the energy market. It should change consumers’ behaviour by piquing natural curiosity. When we first get a smart meter and have an in-home display, we can see how the energy usage in our home is affected by using different appliances around the house. That is very interesting and makes us aware of which appliances are the most energy-greedy, which could lead to a change of behaviour.

I would like to make some other points on energy awareness and my concerns that relate to new clause 4, with which I am broadly sympathetic but will not vote for. Even though I have sat through the Public Bill Committee and all the Bill’s stages, I am still not clear exactly what the Government’s objective ultimately is. They say they will make an offer of a smart meter to every consumer by 2020. That seems a rather fuzzy objective. How do we define what it means to make an offer? We could say that by sending out an email, letter or brochure to every household, every energy retailer has fulfilled its obligation to make the offer. I do not think that is really what the Government intend. Given the importance of smart meter installation to the creation of a smart grid, I would think the Government’s objective is in fact to get smart meters into a very high percentage of the total number of properties by 2020, but that is unstated, as far as I am aware. I would be delighted to be put right by the Minister on that.

I am aware, as a listener of commercial radio and television and a reader of the press, that there is currently a high-intensity programme going on to raise awareness among consumers about the availability of smart meters upon request. However, I question whether the case for the importance of smart meters has been well made.

Despite the fact that this subject could sound quite boring, it is actually very interesting, because this infrastructure is the basis for the fourth industrial revolution that will be seen in the homes of our countrymen and women. Given the current level of roll-out and the state of readiness of installation teams, it is highly likely that the Government can achieve their objective of offering smart meters to everyone, but it is highly unlikely that we will achieve anything like 100% installation of smart meters in all possible premises.

So far, somewhere between 8 million and 10 million SMETS 1 meters have been installed. I mention that estimated range because I am not sure what the recent figure is, and the update we received did not have a specific number. I think that it has been proved beyond any doubt that, as things stand, SMETS 1 meters are not interoperable. In other words, they do not communicate with any other supplier than the one that installed them; nor are they capable of sending data to the DCC at present. That is my understanding.

In the Public Bill Committee, we heard evidence about whether SMETS 1 meters could be made interoperable. The burden of evidence seems to be that without some sort of adjustment or update, SMETS 1 meters are not interoperable. That is my experience, which I have related before in a variety of settings, as someone who installed a smart meter and then tried to switch.

I have questions about SMETS 1 meters. How easy will it be to upgrade them at the appropriate time, so that we have the functionality of the new SMETS 2 meters? If they can be upgraded to the same functionality and interoperability, do we need to have SMETS 2 meters? How will SMETS 1 meters be upgraded and when?

There are many interesting points that have been covered by the hon. Member for Southampton, Test and that I have tried to make in relation to the Bill. There are questions that, if answered by the Minister, will facilitate this programme, which I completely acknowledge is of vital strategic importance to the future economy that the Government are trying to build.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I call Steve McCabe.

[Steve McCabe]

rose—

[Mr Deputy Speaker]

Order. I am sorry. I had not realised that the SNP spokesperson wanted to come in. It has been so long, we got lost somewhere along the way.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Thank you, Mr Deputy Speaker. You and I am sure the House will be relieved to hear that I am going to keep my remarks on Report very brief, because there will be another opportunity to speak and we are all keen, interested and excited to get to Third Reading.

I want to make one or two comments about new clauses 2 and 3, which are very important. I genuinely feel that the deadline to complete the roll-out by 2020 is simply not realistic. Beyond that, I am genuinely concerned that aggressive tactics have been deployed, and the fact that the energy companies face heavy fines if they do not meet this 2020 deadline only makes this more concerning. As I have said to the Minister, I feel there is a genuine conflict between best practice in rolling out smart meters to consumers and the potential penalties imposed on companies that do not meet the targets for the roll-out.

I am very concerned about the deadline of 2020 because the data show that, as of June 2017, only about 7.7 million smart meters had been installed out of a target of about 60 million premises. We know that the first generation of smart meters revealed some issues, and it is not yet clear whether there will be similar issues with the deployment of the second generation. In Scotland, many flats and tenements have banks of meters installed in communal areas, and there does not seem to be a solution for the installation of smart meters in those cases.

New clause 4 would require the Secretary of State to publish details about the cost and progress of the smart meter roll-out with reference to the 2020 deadline, which is very important. It is worth remembering that the cost of smart meters is £11 billion and rising, and that cost is borne by every single household. Not every single household is necessarily told that when they are contacted, but it is important to put it on the record.

Smart Energy GB has referred to a Government cost-benefit analysis. Everyone in the House agrees that there are cost benefits, but the figure of £11 billion is one to watch closely. The UK Government must be transparent and publish the cost and progress of the roll-out, given that the 2020 deadline seems unrealistic to many people, myself included. It seems clear to me that the deadline ought to be reviewed, so that the roll-out is completed efficiently and shields consumers from unfair tariff rises. I urge the Minister to take on board these comments. I will say no more about the other new clauses—time is short, and I will let other Members speak—but I look forward to Third Reading.