Smart Meters Bill

Lord Grantchester Excerpts

Report stage (Hansard): House of Lords
Tuesday 15th May 2018 Lords Chamber

Moved by

[Lord Grantchester]

1: After Clause 1, insert the following new Clause—
“National Plan for Smart Metering
(1) Within one month of the passing of this Act, the Secretary of State must publish a National Plan for Smart Metering.(2) The National Plan must show clearly how all the objectives of the smart metering implementation programme will be delivered, and must specify an appropriate termination date.(3) When preparing the National Plan, the Secretary of State must consult—(a) OFGEM;(b) District Network Operators (DNOs);(c) The Data Communications Company;(d) energy suppliers;(e) consumer interests bodies;(f) Smart Energy GB;(g) the National Audit Office; and(h) such other relevant bodies as may seem appropriate.(4) The National Plan must respond to key findings and recommendations made by annual NAO reports on the smart metering programme and outline how the Secretary of State plans to respond to recommendations made by the NAO including but not limited to— (a) measures to reduce costs of the smart metering implementation programme;(b) measures to maximise the likelihood that smart meters will achieve their intended long-term benefits;(c) measures for improving the take-up of smart meters.(5) The National Plan for Smart Metering must set out the progress made to carry out obligations undertaken by the licensed energy suppliers and their associated organisations to deliver all the objectives of the smart metering programme and must include, but is not limited to—(a) a detailed specification for the functionality and performance required in each meter, so as to ensure reliable service life, ease of installation and maintenance, appropriate inter-operability, future upgrading capacity, and removal and safe disposal of obsolescent equipment;(b) an assessment of the future developments thought feasible and desirable for the smart meter programme, including monitoring of customer activity so as to deliver least cost tariff benefits combined with the maximum ability to engage with future appliance applications, inter-operability, compatibility with smart phones and tablets, and the encouragement of self-generated capacity in the home;(c) an assessment of the potential of smart meters to be the gateway to additional domestic energy efficiency measures;(d) an analysis of technical developments to provide alternative solutions for Home Area Network (HAN) connections where premises are not able to access the HAN using existing connection arrangements;(e) an assessment of the most effective way of dealing with the inclusion in the programme of hard-to-reach premises and multiple-occupancy dwellings;(f) an assessment of alternative delivery arrangements as between energy suppliers and DNOs which might increase the effectiveness of roll out solutions over time.(6) The National Plan for Smart Metering must set out detailed targets for each quarter of each year for each energy supplier in pursuit of the objective of complete roll out of smart meters by an agreed termination date.(7) If by 31 December 2018 fewer than 500,000 SMETS 2 are in operation in homes and small businesses across the United Kingdom, the planned roll-out of smart meters must be halted until such time as the Secretary of State has considered the effectiveness and efficiency of the plan, its realistic completion date and the costs required to complete the plan, and has made a statement to Parliament together with a revised programme for the completion of the roll out.(8) The Secretary of State must publish the National Plan for Smart Metering by 31 December 2018.(9) After due consideration and consultation, the Secretary of State must in regulations made by statutory instrument specify the final version of the National Plan for Smart Metering.(10) A statutory instrument containing regulations under this section may not be made unless a draft of that instrument has been laid before, and approved by a resolution of, each House of Parliament.(11) The Secretary of State must report annually on the extent to which the National Plan for Smart Metering is being delivered, in line with the termination date.”

[Lord Grantchester (Lab)]

My Lords, the Bill is a largely technical Bill, introducing three elements, namely: extending the Government’s powers; introducing a special administration regime for the national smart meter communication and data service provider, the DCC; and providing powers for Ofgem to deliver half-hourly settlement using smart metering data. By and large, these elements have been critically examined in the other place, as well as in your Lordships’ House. We do not particularly take issue with these measures but we recognise that Ofgem’s monitoring and powers over pricing should enable adjustments to make the possibility of a special administration regime extremely unlikely. It is fair to say that we remain concerned that consumers could ultimately pay the price either way.

However, on the analysis of the present circumstances in the rollout of smart metering, the programme is to a large extent in disarray, with enormous confusion and uncertainty in the marketplace. This inevitably leads to reticence and a lack of confidence in the mind of the consumer. We continue to highlight this in our Amendment 1 today. The technical nature of the Bill belies its national importance; it deals with critical national infrastructure, whose modernisation is crucial. We agree with the Minister that the large-scale rollout of smart meters across the UK by 2020 is a substantial technical, logistical and organisational challenge. Everyone is clear that meeting that challenge depends on collective and co-ordinated delivery. In Committee and in subsequent discussions, the Minister has been emphatic that the programme should be led by government. We have therefore altered our amendment and recognised that Ofgem has a different role to play.

The amendment puts the challenge to the Government to provide the leadership. We still believe that a national plan is required. The Government may challenge our diagnosis and claim that they have a high-level plan. However, the perception in the marketplace is very different. The mixed message—on the one hand that the consumer needs only to be offered a smart meter while, on the other, that smart meters need to be installed to a rollout target programme—has not been helpful. We need technical difficulties to be resolved, solutions to be promoted and accountability to be put into the hands of government to make this infrastructure upgrade the success that it needs to be.

The main elements of the amendment remain from our Committee discussions. The Government must galvanise the situation and be seen to be guiding the process: taking ownership of the issues, building ambition into the programme to deliver benefits and putting the consumer in control of their energy use, so that they become more informed and efficient and save themselves money. We have also put a check into the process by the addition of a subsection in our proposed new clause such that should fewer than 500,000 SMETS 2 meters be installed by the end of the year, a review and reassessment must take place. The challenge of careful management is herein included.

Energy efficiency is a crucial element of enabling the UK to meet its energy demands. The achievement of this must be put into the hands of consumers, through the transformation that smart meters will bring to their lives. A smarter, sensor-enabled network would be able to assess live power demand and current usage, transferring power from place to place as needed, reallocating or postponing charging times automatically and potentially allowing the UK to identify the ultimate source of the power through a modern, decarbonised energy mix.

Electrification is still essential to meeting long-term emission targets. It is clear that upgrades to the power network through renewables, storage and additional investment in household-to-grid infrastructure are all crucial elements. This amendment will bring visibility to the process and place responsibility in the hands of the Government. I beg to move.

[Baroness Featherstone (LD)]

My Lords, I support this proposed new clause on the national plan for smart metering, to which I have added my name. As I said in Committee, I came to the smart meter table relatively late, far more recently than most of your Lordships, who seem to have been debating it in one form or another for some years. I was shocked at the seemingly piecemeal way it has evolved, as if it were not one of the major infrastructure projects of this century, which it is. As a consequence of this approach, I have seen a lack of vision, scale and form, which is why this project has been so poorly executed. I was astounded to find that the suppliers were to be the agents of change; I did not understand why it was not the distributors.

However, we are where we are, as they say, so this new clause is proposed to give the opportunity for the rest of the scheme to be conducted in a far more responsible and farsighted way. It would allow the Government and all the players to ensure the best way forward and to deliver certainty and security for consumers, who have been expected to change—we know how difficult change is—but then have heard conflicting and different advice at different times from different people.

The proposed new clause would make sure that all parties are involved; it puts in metrics, targets and incentives to maximise take-up. It makes tracking progress on those tasked with delivering the objectives of smart meters and details what that will require. It would make sure that everything is properly reported, measured and documented. At last, we might actually have a critical path and a critical path analysis from which to work.

The proposed new clause would put this massive civil infrastructure project on a certain basis; it provides certainty for the consumer and a more sure and stable critical path for providers and all those participating in the rollout and beyond. As the noble Lord, Lord Grantchester, said, that is central to all our commitments on energy and energy efficiency in the future.

I very much hope that the Government will take a deep breath and graciously accept that they need help, and that the national plan would be a sensible and professional way forward.

--- Later in debate ---

[Lord Grantchester]

My Lords, the Minister’s reply is interesting. He is understandably reluctant to accept that his department needs the force of this amendment in the Bill. It is critical that the Government meet these three vital tests for the rollout of smart meters. First, there must be a visible plan. I can accept that the Government’s commitment to an annual report, with the current status and future milestones mapped out, meets this criteria, and I thank the Minister for repeating this commitment again today.

Secondly, there must be a role for Parliament to monitor progress and take evidence that all elements in the rollout are co-ordinated into an achievable programme. It should be possible to implement this part of the plan from the Minister’s commitment to the Government’s statement in a publication early next year with a report, with evidence and a stocktake on the latest technological position on the transition from SMETS 1 to SMETS 2 meters and their capabilities, the latest cost-benefit analysis provided by the NAO, and after consultations with consumer organisations and Ofgem. Parliament will be scrutinising this on behalf of consumers. The Minister has given a commitment that the Government will come forward with a statement in the first half of 2019.

Thirdly, the ambitions inherent in a national plan must be embraced and consumers put at the heart of the programme. The Minister must make sure that his commitment to a separate paper at the end of this year goes ahead, making the data usage for smart meters available for the optimisation of consumers’ use of energy. I am encouraged by the Minister’s reply that the Government accept the thrust of the amendment as part of his department’s responsibilities. The Government will accept that they are on notice to perform to their timetable.

I welcome the Minister’s commitment to the rollout programme and the way he has responded to our challenge. It is agreed that in essence his department will conduct the national plan in all but name and that he has promised to make this available. With that secured, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.