Question

To ask the Secretary of State for Energy and Climate Change, what estimate she has made of the total cost of smart meters being delivered to (a) 100 per cent of customers and (b) 80 per cent of customers by 2020.

The Government’s policy is to make the benefits of smart meters available to all consumers so they can take control of their energy consumption, make better informed decisions on their energy supplier and switch more easily. With a lower target energy suppliers could choose to target the rollout at consumers who were the easiest to service, potentially excluding important groups from the benefits of smart metering.

The Government’s Smart Metering Impact Assessment projects a strong case for a near universal rollout. It estimates a net present value benefit of around £6 billion over the period to 2030, with total benefits of around £17 billion and costs of around £11 billion.

Changes in the rollout target would affect both costs and benefits and our provisional estimate is that an 80% rollout target would reduce the net present value by around £2 billion. This reflects that the fixed costs of the smart metering system would be shared across a smaller number of consumers, that there would be additional operational costs for energy suppliers running two metering systems at scale, in particular from needing to continue to manually read basic meters, and that certain network benefits would not be achieved where these require a comprehensive deployment of meters.