Smart Meters Bill
Public Bill Committee, 21 November 2017.
Steve McCabe (Labour, Birmingham, Selly Oak)
On a point of order, Mr Gapes. I understand what you have just said, but what happens if something comes up in the evidence-taking sitting that would lend itself to an amendment, given that the sitting is happening after the deadline?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you, Mr Gapes.
Examination of Witnesses
Alan Whitehead (Labour, Southampton, Test)
One of the key clauses of the Bill concerns the extension of the time within which licensing of smart meters is tenable to 2023, although it is proposed that the roll-out should be completed by the end of 2020. Do you think there is any significance in that difference of years in the arrangements for licensingQ ?
Alan Whitehead (Labour, Southampton, Test)
Q Why do you think that the 2020 deadline is not realistic?
Richard Harrington (Conservative, Watford)
Q Good morning to both of you. Would you care to comment on how you feel that smart meters are transforming the experience for prepayment customers?
Grahame Morris (Labour, Easington)
Good morning. Why has there been such slippage in the programme from the original scheduled roll-out date of 2020? I read in the brief that there is 74% satisfaction among customers when it comes to the existing meters. Is it public perception? Is it lack of advertising? Why has take-up not been as good as originally anticipatedQ ?
Stephen Kerr (Conservative, Stirling)
I am interested to hear about the proposition to consumers. How do you package smart meters up? What are the benefits that you talk of when you talk to consumers about smart meters? In relation to your answer to that question, why are we where we are? Why are we only 7 million inQ ?
Stephen Kerr (Conservative, Stirling)
Q Do you think smart meters are encouraging the market to act more competitively?
Stephen Kerr (Conservative, Stirling)
Q Has the lack of interoperability in the SMETS 1 meter been a drag?
Mark Pawsey (Conservative, Rugby)
May I follow that up? I have a constituent—Q
Mark Pawsey (Conservative, Rugby)
Sorry, Mr Gapes. I wanted to follow up the point from Mr Bullen. A constituent told me that they changed supplier and had a smart meter installed. Subsequently, when they wanted to make a further change, they discovered that their smart meter had become a dumb meter. Is that a rare occurrence or a regular one?
Mark Pawsey (Conservative, Rugby)
Q They went to the supplier because they thought it would be particularly competitive on price, and they were very disappointed to find that they were not able to have the benefits of their smart meter. They feel let down by the sector as a whole as a consequence.
Mark Pawsey (Conservative, Rugby)
Q They reasonably assumed that the new supplier would be able to provide such a product. At no stage did it ever cross their mind to ask whether the new supplier would be able to provide them with data through their smart meter.
Mark Pawsey (Conservative, Rugby)
Q You suggest that if people who have a SMETS 1 meter are thinking about switching, they should ask the new supplier whether it can provide to them on a smart basis.
Stephen Kerr (Conservative, Stirling)
Q I am not clear about the whole issue of interoperability. My personal experience is that when I switched supplier, my smart meter did not continue to be very smart. Frankly, I could not see the value of using the information to make a switch and then losing the meter. Are you saying that is not the case? Should I have asked my new supplier for another meter?
Stephen Kerr (Conservative, Stirling)
No, it does.
Patricia Gibson (Scottish National Party, North Ayrshire and Arran)
Like probably most people in this room, I can see that there are benefits to smart meters, but I wonder whether I could put to you a number of concerns that have been raised specifically with me about the roll-out. Perhaps they might explain the difficulty in penetrating the market as quickly and deeply as we would like at this stage, and indeed by 2020.Q
Would you like to comment on concerns, raised by trading standards, that not enough of the energy companies are making it clear to consumers that they can refuse a smart meter if they wish? There are real concerns that some energy companies may be guilty of breaching the Consumer Protection from Unfair Trading Regulations 2008.
What do you think about the idea that consumers are being sold the meters—by “sold” I am talking about the idea—as free, when we all know that in fact they are not free? The other thing is that, as far as I am aware, some of the models rely quite heavily on a wi-fi signal, which may or may not be available to all consumers. I may have got that wrong, because I am not terribly technically minded.
One of my concerns is what we do with the information when we have it. If we imagine a future where everybody has a smart meter, will that be used to charge a higher rate for electricity usage during peak times, when families cannot avoid using it? Will the need to use electricity at specific times be used to increase the price in the market?
I realise I am throwing a list at you, and I apologise for that. The idea that you pay for what you use is attractive to consumers, but the fact is that when a smart meter is installed on your property, as I know from my own experience, your direct debit bill stays exactly the same, because they spread it over the year. Yes, you are paying for what you use, but when you reduce your usage, your monthly or quarterly bill does not necessarily go down. What are your thoughts on that, given that it is sold comprehensively as, “You only pay for what you use”? You do, but not necessarily at the time when you use it. You will also know that there are concerns about the security of the data. I know that I have given you a long list, but I would be very interested to hear your thoughts.
Steve McCabe (Labour, Birmingham, Selly Oak)
Q I have three quick questions. If I have this right, the programme is behind schedule, the cost is escalating and the Minister now wants to increase the timescale and take extra powers. What needs to be done to ensure that this thing stays on track and within cost and does not become an albatross for the consumer?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Do you know how much?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Are you suggesting a new cost-benefit analysis?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Thanks. May I ask about the interoperability issue again? If I understood correctly, Mr Bullen was saying that part of the problem was that some suppliers choose not to help people who switch have a functional smart meter. Is one of the other problems the role of the smart meter asset providers who, if I understood correctly, are a bit like the energy businesses’ equivalent of a football manager? They are the middle people who provide the meters. It might not be in the interest of energy suppliers that get their meters from one asset provider to switch when a customer switches supplier. Is that how it works?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Is that because you have an interest, Mr Bullen?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Tell me what a smart meter asset provider is. What is the function and role?
Steve McCabe (Labour, Birmingham, Selly Oak)
A middle man.
Bill Grant (Conservative, Ayr, Carrick and Cumnock)
I have two brief questions. I sense that, despite the efforts, the public may not be fully aware of the roll-out of smart meters and the advantage available. If that assessment is correct, what more can be done?Q
Secondly, with the accent on rural areas throughout the UK, I take it that the installers and those who provide the meters are in constant contact with those who provide broadband, wi-fi or the signal to make the system work.
Bill Grant (Conservative, Ayr, Carrick and Cumnock)
Thank you very much.
Richard Harrington (Conservative, Watford)
Q Thanks to both of you for coming this morning. May I ask Ofgem, in particular, what you are doing to ensure energy suppliers deliver their obligations?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q I notice that it says in your written evidence that you see a significant benefit for consumers, and you have repeated that. How will the benefit be realised? What are the practicalities? How will it be realised for the most vulnerable customers—the elderly and the most disadvantaged? How will we see that, and what kind of timescale are we talking about?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Am I right in thinking that you are responsible for enforcing the code of practice?
Steve McCabe (Labour, Birmingham, Selly Oak)
Yes.
Steve McCabe (Labour, Birmingham, Selly Oak)
Q So how is it that people can receive a cold call telling them that it is a legal obligation to have a smart meter?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q But it is wrong for anyone to phone up and say, “You are legally obliged to have one.” That person is clearly breaching the code of practice.
Patricia Gibson (Scottish National Party, North Ayrshire and Arran)
Q I want to probe this a little further; I raised it with the previous witness and I would be interested in your thoughts, given that you are in charge of the code of practice. Trading standards have raised concerns that there are potential offences being committed under the misleading actions provision of the Consumer Protection from Unfair Trading Regulations Act 2008. They have said that these infractions may be being committed because some energy suppliers are giving the impression that smart meter installation is compulsory. What are your thoughts on that? Have you had any contact or dialogue with trading standards on their very serious concerns?
Patricia Gibson (Scottish National Party, North Ayrshire and Arran)
Q I think, like you, that there are lots of benefits to smart meter installation. Can you, in your position, understand that people are naturally suspicious? Some consumers are aware that they do not in fact have to have smart meters, despite having been told that they must have them. Others, however, have been told that they need to have them, and they accept that at face value. Some consumers are concerned about what this collective energy information is going to be used for. Is it going to be used to hike prices up at certain times of the day of peak usage? Some people are concerned about the security of the data.
We can all appreciate that there are benefits to smart meters, but can you understand those real concerns of consumers? In addition, there is the fact that the idea of a smart meter has been sold as something free, when it is clearly not.
Patricia Gibson (Scottish National Party, North Ayrshire and Arran)
Q Do you think that consumers are aware that they can protect their data in the way that you suggest?
Grahame Morris (Labour, Easington)
Q Just quickly, given that time is short—Rob, your opening remarks were really helpful about the terms of reference as the regulator. However, we are being asked, here, to extend the powers of the Secretary of State. Are any of the powers that we are proposing to change through the Bill related to smart meters, and if so, which ones? Angus, the Bill proposes that costs should be recouped from customers in the event of an administration, rather than from the insolvent company. What is your view on that?
Grahame Morris (Labour, Easington)
Q Can they be used for any other purpose?
Douglas Ross (Conservative, Moray)
Our earlier witnesses were speaking about the ways to the roll out and, ultimately, not being able to meet original timeframes. In the report earlier this year, you were looking at roll out and some potential problems with it. The number of installers was highlighted as an issue. Is that still an issue? If we as a Committee agree to a number of things about extending the timescale, will there still be a problem with there not physically being enough people able to do the jobQ ?
Douglas Ross (Conservative, Moray)
Q So the 2016 problems that you reported in June are no longer an issue. Somehow we have been able to attract people to become installers. How has that been done?
Douglas Ross (Conservative, Moray)
Q When you spoke about the frameworks that these suppliers entered into and the targets that you can judge them against, how are the targets set for the installations in more remote and rural areas? Clearly, in terms of a numbers game, you can do far more installations in an urban area than you can in constituencies like mine in the north of Scotland. Such constituencies and the more remote and rural areas actually have the biggest potential to benefit from smart meters, yet we seem to be at the very tail end of the installation process because we are harder to reach and you can do far less in the same amount of time. What are you doing to ensure that the more remote and rural areas do not fall further behind the urban areas?
Douglas Ross (Conservative, Moray)
Q Are you saying that is wrong? It is a complaint that is coming from rural communities. They can see that in the bigger communities—the bigger towns and cities—there does not seem to be a problem getting an appointment to install a smart meter, yet in the more rural areas there is. But you are saying that that is wrong.
Douglas Ross (Conservative, Moray)
Q The 99.75% is a great ambition, but is it still the case that the more remote and rural areas will be at the end of the programme, when the suppliers must get to the 99.75%, because—I am told—it is more difficult to install the meters there than in those areas that will experience the benefits earlier on?
Matt Western (Labour, Warwick and Leamington)
I have some quick questions. I am concerned about what I heard in the previous session about the transparency to consumers. I sense that there is no consistency—perhaps you can correct me—between the different suppliers, in terms of information provided to the consumer about the programme, what the customer’s responsibilities are and what the provider’s responsibilities are, such as frequently asked questions and that sort of thing. Can you confirm the situation?Q
Matt Western (Labour, Warwick and Leamington)
Q Have you withdrawn the licence from anyone so far on the basis of malpractice?
Laura Smith (Labour, Crewe and Nantwich)
Matt just asked my question, but I will add to it. I could possibly be the only person in this room who has had to survive on a pay-as-you-go meter, and I have also lived through then being targeted with high tariffs by energy companies—they come to the estate and sell those things, knowing that they are going to make money out of the poorest in society. I struggle with the transparency of this. Data protection and customers’ privacy, in terms of information about how they are using their energy, is a real concern for me. I just do not personally buy the argument that it is all for the consumer, when there is money to be made out of people. So that is an issue.Q
The roll-out is also an issue. We have touched on the fact that it is obviously delayed. Is it going to happen or is it another initiative that is going to cost an awful lot of money? Who is going to end up paying for that? Will it ultimately be the consumer once again? Those are my two main points, before I get on my high horse.
Laura Smith (Labour, Crewe and Nantwich)
Q How easy and transparent is it? We sometimes say that we are making things easy, but how accessible is the information that is given to customers and how is it being rolled out?
Alan Whitehead (Labour, Southampton, Test)
Q Mr Flett, we heard from previous witnesses that there may well be a hiatus in the roll-out and that vans may go out empty, with no meters. A number of people have suggested that that hiatus may be due to the fact that the DCC did not go live until the very edge of the penalty period in which it was supposed to be fully functional. Even when it went live, it was not fully live; there were a number of workarounds in the report that went out about it going live. What is your view of those severe delays, and what would you say about the DCC’s state of liveness—if that word exists—in terms of the challenges that SMETS 2 will bring us in the near future, particularly with end-to-end testing?
Alan Whitehead (Labour, Southampton, Test)
Q One of the issues that has been discussed recently is that getting proper end-to-end testing of SMETS 2 meters—that is, testing of real meters on real walls—over a period of time, which is necessary to ensure the integrity of those meters, has been severely compromised by those delays in going live. After all, a live DCC is the sine qua non of testing SMETS 2 meters. Do you consider that you have been a particular problem in that respect, or do you think the people who are concerned about end-to-end testing of SMETS 2 meters protest too much?
Alan Whitehead (Labour, Southampton, Test)
Q How many SMETS 2 meters have actually been installed so far?
Alan Whitehead (Labour, Southampton, Test)
Q Two hundred and fifty?
Alan Whitehead (Labour, Southampton, Test)
Q That is a bit of a shocking number, is it not?
(Afternoon)
Examination of Witnesses
Richard Harrington (Conservative, Watford)
Q 46 Thank you, Mrs Gillan, and welcome to the Chair. It is very nice to see you. I will ask just a brief question to give plenty of people a chance.
Thank you for coming today, gentlemen, and helping us. As you probably know, the evidence you are giving today is the beginning of the Committee stage of the Bill. May I ask you both to comment on the interop—I cannot pronounce it—on how the Data Communications Company system will help the SMETS 1 meters to be operable throughout the whole system? We keep hearing about it and my shadow and I have discussed it at different times, but I would be very interested in your comments.
Alan Whitehead (Labour, Southampton, Test)
The Government have indicated that SMETS 1 meters will no longer be installable after a particular date and have given guidance about what can be installed up to that date. There is a consultation at the moment about whether that date might be changed slightly to arrange for a smoother handover from SMETS 1 meters to SMETS 2 meters. What effect will that arrangement have on the overall passage of the roll-out, and what do you think about the present availability of SMETS 2 meters to ensure that that roll-out proceedsQ ?
Alan Whitehead (Labour, Southampton, Test)
If, as we have heard, SMETS 1 can be made fully interoperable with software upgrades, what is the purpose of SMETS 2 meters?
Steve McCabe (Labour, Birmingham, Selly Oak)
After this morning’s witnesses, I was left with the impression that the DCC programme is absolutely fine, on target and all is going well. Has the DCC programme been delayed? If so, what have the problems beenQ ?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q What would you have expected? What was the figure meant to be?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q So 215 was the success figure, but it should have been millions. Is that right?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you.
Steve McCabe (Labour, Birmingham, Selly Oak)
Q That is the DCC; it does not sound quite as rosy to me as it perhaps sounded a couple of hours ago, but let me ask about the existing smart meters in operation. To your knowledge, how many of them, and what proportion of those that have been installed, are currently running in dumb or dummy mode?
Stephen Kerr (Conservative, Stirling)
Thank you for the clarity with which you are answering our questions, by the way. This morning we heard evidence that suggested that SMETS 1 meters were in fact interoperable and you are confirming to us that they are not. You described a status of interim interoperability. Can you revisit what you meant when you said thatQ ?
Stephen Kerr (Conservative, Stirling)
Q And it is on the basis of this status of interim interoperability that you believe that we should put the pedal to the floor towards the 2020 deadline. Is that what you said?
Stephen Kerr (Conservative, Stirling)
Q We have 7 million of these SMETS 1 meters on walls, 20% of which you estimated are now in dumb mode. Many of these meters will be unplugged. If people have changed supplier, they have probably unplugged it because it is not providing any functional service to the consumer anymore. How do we update the SMETS 1 meters to make them SMETS 2 compatible?
Stephen Kerr (Conservative, Stirling)
Q How do you update them, though?
Stephen Kerr (Conservative, Stirling)
Q So the visual data might be—
Mark Pawsey (Conservative, Rugby)
May I move on to a bit of the Bill that we have yet to cover in our deliberations—the special administration regime? The Government say that the risk of the DCC failing is very low, but none the less want to put in this special administration regime. In what circumstances could you envisage the DCC failing, and do you agree that the likelihood of that happening is, as the Government say, very lowQ ?
Mark Pawsey (Conservative, Rugby)
Q How would you define it not working? What constitutes not working?
Mark Pawsey (Conservative, Rugby)
Q Would that cause the DCC to fail and this special administration regime to kick in, in your view?
Mark Pawsey (Conservative, Rugby)
Q Are the Government just being prudent by including this clause in the document?
Matt Western (Labour, Warwick and Leamington)
This is not my specialist subject, but I am interested in the asset provider side. I am trying to get my head around this. Could you give me an idea of how many manufacturers are supplying to the industryQ ?
Matt Western (Labour, Warwick and Leamington)
Q For SMETS 1, sorry.
Matt Western (Labour, Warwick and Leamington)
Q These units are provided to the companies to install, and that is written down essentially over a lifetime. What sort of lifetime are we talking about for one such product?
Matt Western (Labour, Warwick and Leamington)
Q So where we are hearing about another provider possibly coming in, and this question of interoperability—if you have one supplier and you switch to another supplier, there is this, “We are going to switch the unit at the same time”—why can that other company not take over the asset? Is it simply about communications?
Matt Western (Labour, Warwick and Leamington)
That is what I thought.
Matt Western (Labour, Warwick and Leamington)
That is the point I want to get to.
Matt Western (Labour, Warwick and Leamington)
So the costs go up.
Matt Western (Labour, Warwick and Leamington)
Q There is a massive issue here, isn’t there?
Bill Grant (Conservative, Ayr, Carrick and Cumnock)
I am still enthusiastic about the potential for smart meters and there is still will behind it. I am trying to make a comparison and I come back to the 1970s, to the introduction of natural gas. They are two different technologies but a massive task throughout the United Kingdom. We mentioned two dates: 2020 was the desirable date and you wish that to be retained, although there was a fall-back date of 2023. At some time in this journey we are going to have to speed up the process. We are going to have to pull our socks up and get the job done. I have two questions in that regard. Do we Q have the production capacity for SMETS 2 meters to meet the demand when it is at its peak, and do we have sufficient human resources to install those meters commercially, hopefully to meet the target of 2020, but perhaps more realistically at a date beyond that? How are we for capacity: human resources and production capacity?
Bill Grant (Conservative, Ayr, Carrick and Cumnock)
Q So you are confident in the supply chain for meters, but not so confident in the human resources for installation?
Dan Carden (Labour, Liverpool, Walton)
MrQ Lickorish, you have been very clear about the technical versus the commercial issue in terms of whether this can benefit customers if they can move from one supplier to another. Are there any answers from Government, or the structure of how this is set up that can deal with those commercial issues?
Grahame Morris (Labour, Easington)
Thank you, Mrs Gillan. I will also try to be brief. Mr Lickorish, you raised some interesting concepts. I was not familiar with the deemed rental issue, for example. You mentioned perverse behaviour caused by political milestones. Presumably you are of the belief that delaying that roll-out to 2023 is a political milestone that will induce perverse behaviourQ .
Grahame Morris (Labour, Easington)
Q I want to try to understand this, because essentially I am a layman. Looking at the obstacles to achieving the milestones that are already agreed and the performance of the DCC, there seems to be general disappointment about the numbers. A year on and it is 250 when the assumption was that it would be considerably more. If my reading of the explanatory notes is correct, the DCC is regulated by the Gas and Electricity Markets Authority. I am not suggesting that there would be a failure by the DCC, but in that event—for whatever reason, whether it is political interference or technical issues—the Bill has a proposal to give the Secretary of State the power to veto any proposal by the authority to transfer the DCC licence. Do you have any thoughts on that? Are there any circumstances when it would be reasonable to veto the transfer of the licence?
Grahame Morris (Labour, Easington)
Q Hypothetically, could there be circumstances where due to poor performance or whatever it is necessary to transfer the DCC licence?
Grahame Morris (Labour, Easington)
Q I am not trying to put words in your mouth; this is just for my understanding. Should the Committee be concerned about the veto proposed in the Bill to prevent such a transfer?
Grahame Morris (Labour, Easington)
We will ask the Minister about that during the course of the Bill.
Richard Harrington (Conservative, Watford)
Q Thank you very much, Mrs Gillan.
I will continue from the evidence that I know you heard before, because you were sitting—quite rightly—behind those witnesses. How important do you feel it is that the energy suppliers make a swift and smooth transition to using SMETS 2 meters? I ask that because we have heard from people who have been suppliers of SMETS 1 meters and from others who have taken a broader view, so I would be very interested to hear your view, please.
Richard Harrington (Conservative, Watford)
No. I will give everybody else a chance. Thank you very much.
Alan Whitehead (Labour, Southampton, Test)
Q Mr Deshmukh, I was very interested to look at your pan-supplier customer funnel, which you set out in your written evidence to the Committee. The November 2018 funnel appears to suggest that getting on for 35 million people will not have a smart meter by that date. Of those, 17 million will be eligible at that point for a smart meter, or will have been persuaded to have a smart meter, but energy suppliers will only plan to book installations for 5 million of them, and 3.8 million will actually get smart meters at that point. I set that against the smart meter roll-out cost-benefit analysis, which came out in August 2016. It shows a concentration of installations at the end of 2018 or 2019 of something like 14 million to 15 million a year at that point. It is not going to happen, is it?
Alan Whitehead (Labour, Southampton, Test)
Q We have two suggestions here. One is that only 4 million people will go on to have a successful installation of a smart meter by November 2018, and yet it is suggested on the smart meter roll-out cost-benefit analysis that something like 14 million will be required to have smart meters installed at that same point in order for the roll-out to be completed by 2020. So in other words, there is to be a bunching of installations at an incredible level between the end of 2018 and the middle of 2019. Do you think it is possible to achieve that over the period, even with some amendments to your pan-supplier customer funnel arrangement?
Alan Whitehead (Labour, Southampton, Test)
Q My point is that it is indeed a slice of the period—3.8 over the six months prior to November 2018—and yet in order to reach the roll-out target, the suggestion is that about 14 million to 15 million ought to be installed over that same period. It seems to be rather a large gap.
Dan Carden (Labour, Liverpool, Walton)
Q We have heard positive stories about prepaid customers and the benefits that they enjoy. I believe that most of the roll-out so far has been to prepaid customers. There is a satisfaction rating of around 80%. Are you less able to be positive about the benefits to other customers? What are those benefits?
Dan Carden (Labour, Liverpool, Walton)
Q We have also heard quite a bit of evidence about the difficulty consumers are having transferring. One company puts a smart meter in, then there is an issue moving to another company. As far as I can remember, for years and years, we have been told that the ability to move from one supplier to another is the answer to reducing bills. This seems to fly in the face of that.
Mark Pawsey (Conservative, Rugby)
Q May I ask once again about the special administration regime? The previous witnesses were not able to help us tremendously on that. Ms Vyas, you have come out in great support of the special administration regime. You have described the DCC as key national infrastructure. Can you explain why this is such an important part of the Bill?
Mark Pawsey (Conservative, Rugby)
Q This is the provision in respect of the very unlikely possibility of the DCC becoming insolvent.
Mark Pawsey (Conservative, Rugby)
Q No, I am particularly interested in why you think that the special administration regime is such an important part of the Bill.
Mark Pawsey (Conservative, Rugby)
Q Under what circumstances could it possibly fail?
Mark Pawsey (Conservative, Rugby)
Q Why should it not remain afloat? That is the question I am asking. What is the likelihood of that ever happening? How could the need for it ever arise?
Mark Pawsey (Conservative, Rugby)
All right, we will save it for the next witness.
Steve McCabe (Labour, Birmingham, Selly Oak)
Q I have two quick questions for Sacha. First, looking at the funnel, it looks as if you need 10 expressions of interest in order to get one smart meter installed. How does that compare with other products? That bit of information does not tell me anything, but if I knew how many people did that to buy a mobile phone or similar, I could put it in some context. Is there an answer to that?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Thank you. It is a supply issue, mostly. The other thing I wondered is this. Obviously, your job is to promote smart meters, so your performance management framework is about identifying how to motivate and enthuse people to have them, and that is what your research is about, but have you done any research, or has anyone else, on how people’s enthusiasm and motivation change if they have a smart meter, and then change supplier six months later and discover that they no longer have a smart meter? My guess is that their enthusiasm might decrease. Is there any research to tell us what is really going on?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Do you think that is because people are getting calls saying, “You’ve got to have one”?
Stephen Kerr (Conservative, Stirling)
Q I will be brief. My question is about engagement and awareness. We are talking about this smart meter roll-out in the context of the fourth industrial revolution and about what should be a centrepiece of national infrastructure renewal in that revolution. My concern is that there is not a lot of public awareness of the total picture of smart meters in the context of the smart grid and the smart economy. I do not think that there is a lot, but what is your experience? Is enough being done to raise awareness? What more can be done?
Clive Lewis (Labour, Norwich South)
My question follows on from that. In terms of your own organisation, when does your contract run out for what you are doing?Q
Clive Lewis (Labour, Norwich South)
Q Okay. Obviously, there are provisions in the Bill to extend the Secretary of State’s powers until 2023. Do you feel there is enough provision in the Bill beyond initial roll-out? It is very possible that many people will have this box on their wall at some point in the near future. There are 250 SMETS 2 and more SMETS 1. What is to stop those from being just boxes on a large number of people’s walls that bleep at them every so often? Where is the process for people to be able to engage past 2020, 2023, to be able to get the most from these boxes? No doubt the technology will develop; at the moment it is simply that a little figure will tell you how much energy you are using at the right time, and that will be swapped between you and the energy supplier. What about when people want to engage in some complicated manoeuvring on their SMETS 2 box—where will they get the support for that? It feels to me at the moment that you get a very complex box on your wall that can do lots of magical things, but who is going to explain that to you—who is going to support you in that process?
Richard Harrington (Conservative, Watford)
I am happy to let Mr Morris go first. I know he has been waiting for a long time.
Grahame Morris (Labour, Easington)
No, that is okay.
Richard Harrington (Conservative, Watford)
Q Thank you very much for coming, Doctors, as it were. I thank you for the efforts that you have made professionally to get the programme to the stage it is at now. Although difficult, I would like to ask a broad question that will encompass both your areas. In my Government job, I view the smart meter programme as just the very beginning of a future smart grid for people. I have seen prototypes in America and elsewhere, which you will know much better than I do. What change in human behaviour patterns have you seen up to now for people who have what we could call a very prototype smart grid with smart meters? From both the building and the consumer point of view, what is the vision for the future?
Alan Whitehead (Labour, Southampton, Test)
We have been talking about the other end of the process—the extent to which it will be possible to use smart meter data in aggregate for all sorts of purposes in smartening the grid; developing different tariffs and different resiliencies in grids with knowledge of real-time flows and so on. What sort of penetration of the system do you think is necessary for that data to be usable? Is it a full roll-out, a partial roll-out, 60%, part of the country covered, not other parts? What would be the optimal patternQ ?
Alan Whitehead (Labour, Southampton, Test)
Q Does the viability of the aggregate data degrade just marginally as the percentage point of distribution goes down? Alternatively, is there a point at which you say, “Actually, this information is useless” because the penetration is so patchy or incomplete that you cannot reliably use it for the purposes that we hope it can be used for in the future?
Alan Whitehead (Labour, Southampton, Test)
Q One example would be predicting in real time what flows are going on in various parts of the grid, so you can manage the grid’s capacity versus its possible strength in the future in an optimal way.
Alan Whitehead (Labour, Southampton, Test)
That is what I do not know. That is why I am asking the question.
Clive Lewis (Labour, Norwich South)
Q In terms of the versatility of the smart metering data that you touched on, Richard, it was quite sobering to hear you say that that has never worked for you. We can probably quite accurately talk to suppliers about the build and so on, but I am thinking of all the other things, such as the heating being attached to movement sensors so that it goes off when you leave the house and, by talking to your phone, switches back on when you are due to arrive back in 15 minutes. Google can do that already.
Obviously, the cheapest and greenest energy is the energy that we do not use, so that is fantastic on the demand side, which we do not focus on enough in this country. You are saying that that is not really working. I wonder whether this legislation is the place where this will happen. Is there anything in this legislation that you feel is sufficient to give you encouragement that that will happen in the future, or are there holes in it that mean that those data and that potential will never be realised?
Clive Lewis (Labour, Norwich South)
Q Does it need it?
Clive Lewis (Labour, Norwich South)
Q When we talk about something that is at the heart of the demand side of the fourth industrial revolution, I guess you would expect us to be planning some years ahead to be able to make use of emerging technologies. What you seem to be saying at the moment is that this Bill does not do that. It is quite limited in its purview.
Douglas Ross (Conservative, Moray)
Dr Darby, in the information you provided you said that it is important to conduct the remaining smart roll-out well rather than do so at speed, and then you gave three main reasons for that. I am not sure whether you were here for the evidence session this morning, but I raised Q concerns about my own constituency in Moray in the north-east of Scotland, and other more remote and rural areas, where people want smart meters but the installation is not happening particularly quickly.
One of your main concerns about rolling out quickly is that customers will feel pressured into adopting smart meters; yet I have constituents who want smart meters but cannot get them. For example, a village hall, the Houldsworth Institute in Dallas, has had people out to try to get one installed, but there is no mobile phone reception—it is in a blackspot. How do you think your evidence relates to people who want to see the roll-out far quicker, but are hampered because the technologies do not allow it or we do not have enough installations happening in the more remote and rural areas compared with the more urban areas?
Douglas Ross (Conservative, Moray)
Q The concern I am trying to get at is that constituents such as mine will eventually get frustrated with always being at the end of the queue. If we cannot accelerate the process at all and suppliers continue to go for doing mass numbers in more urban areas, we have a real risk that the communities that would benefit the most from these smart meters will always be at the end of the queue. If it takes so long to get to them, we might actually disenfranchise so many people.
Douglas Ross (Conservative, Moray)
Q So you could accept that as being a reason in some cases to accelerate, if possible, without compromising the other elements?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Do you know what happens to all the old meters? How are they disposed of when we put in these new smart meters, and what happens to the smart meters when they come to the end of their life? Has BEIS issued any guidance on how those should be recycled? I guess I am wondering whether there is a landfill somewhere full of old smart meters or old non-smart meters.
Steve McCabe (Labour, Birmingham, Selly Oak)
Q So you do not know what will happen to the old ones, or what will happen to smart meters when they come to the end of their lives?
Stephen Kerr (Conservative, Stirling)
Q I was interested in your comment about consumer access devices, following up on your comment that you have never had one that connected to a smart appliance or device. Is that because the SMETS 1 meter does not have adequate functionality to do so? If so, does that mean that we have an estate of some 7 million SMETS 1 meters in this country that are not future-proofed to allow us to take full advantage of the potential of a smart grid/smart economy?
Stephen Kerr (Conservative, Stirling)
Q Are you seeing evidence to suggest that the SMETS 2 meters will be easier?
Stephen Kerr (Conservative, Stirling)
Q Then that will be the case.
Stephen Kerr (Conservative, Stirling)
Q To this point, is there any evidence that smart meters change consumer behaviour across the board, other than people looking at the visual display?
Alan Whitehead (Labour, Southampton, Test)
Q Briefly, on that particular issue, one thing that smart meters may well do—we have heard that they do—is enable you to use energy more effectively. To paraphrase Dr Fitton, although a smart meter might tell you very smartly, “This is exactly how the energy you are using goes out through the roof and windows of your house and through your walls,” and that may well be useful information, it does not actually make your home any more efficient. Is there any evidence that smart meters can lead people to go that step further, or do we still need smarter meters that tell you, “Actually, your house is really inefficient; what you ought to do is make your house more efficient, and then your smart meter will work even better”?
Giles Watling (Conservative, Clacton)
One concern you mentioned, Dr Darby, was too much of a rush to roll out the smart meters, because installation might be compromised. Secondly, and interestingly, you said that you feel people might be pressured into adopting smart meters and, therefore, not engage in the process; I think I have read that right. Do you have any evidence that that might be being addressed—that people are beginning to understand the benefits and the process involvedQ ?
Giles Watling (Conservative, Clacton)
Q There seems to be some confusion out there, inasmuch as people are getting SMETS 1 and then they want SMETS 2, and they are not sure whether one will do the other. Are we getting that information out there to the people, who are the customers after all? Are we being effective enough?
Giles Watling (Conservative, Clacton)
Q So that is something we need to address, in your view.
Bill Grant (Conservative, Ayr, Carrick and Cumnock)
I will take a quick virtual imaginary journey to November 2022 when we have maxed out on the installation of smart meters, everybody is happy and they are working. Notwithstanding the consumer benefits, what would be the benefits to the wider environmental community? What would be the environmental benefits in relation to carbon reduction from the installation of a full roll-out of these meters? Or is there no benefit whatever to the environmentQ ?
Bill Grant (Conservative, Ayr, Carrick and Cumnock)
Q So there will be a considerable environmental effect.
Bill Grant (Conservative, Ayr, Carrick and Cumnock)
Q We are all fond of our environment and the planet, and we need to keep them for generations to come, so that is a stepping stone on a very positive journey.
Matt Western (Labour, Warwick and Leamington)
The confluence of “prosumer”—producer and consumer: do you think the Bill addresses that, or is there an opportunity to have gone a bit further with it, to change behaviourQ ?