The Business Department (BERR) has dropped plans to require energy suppliers to give their customers display devices to let them know how much energy they are using at any one time.
Last year’s consultation on billing and metering set out government plans for energy suppliers to provide real-time displays every time they install new or replacement electricity meters in homes and provide free real-time displays to all households that request them for a period of two years (ENDS Report 391, p 54 ).
The requirement, which was due to come into force from May, was promised in last year’s energy white paper and was one of the Labour Party’s five environment pledges at the 2005 election. It was expected to encourage consumers to save around £500 million a year and cut carbon dioxide emissions by 1.8 million tonnes a year by 2020.
But in its response to the consultation published in late April, the government says that it "will not pursue proposals for provision of [real time display] devices when a meter is replaced or newly-installed or for provision ‘on-request’".1Instead it will "request electricity suppliers to provide on a voluntary basis real-time display devices to particular customer segments."
BERR said "the majority of respondents [to the consultation] were for a variety of reasons against the proposals to require the provision of real-time displays." One of the arguments against real-time displays is that there will soon be a roll-out of smart meters, which perform the same function with the additional benefit that energy suppliers can access the readings remotely.
The Energy White Paper indicated that the government wanted all meters to be smart meters within ten years.
BERR has stuck with plans to require suppliers to install smart electricity and gas meters to medium and large businesses within five years. The firms covered will fall into electricity profiles 5 to 8, and use more than 732,000 kilowatt hours per year of gas.
The original consultation included a typographical error that set the gas threshold at 73,200KWh.
BERR estimates that this will result in around 170,000 electricity meters and 40,000 gas meters being installed. It has tabled an amendment to the Energy Bill to implement the requirement (see p 54 ).
The government has backed off from setting a date for the replacement of the remaining 46 million gas and electricity meters used by smaller businesses and households.
An impact assessment2of different options and technologies estimates that the total cost of a complete roll-out of smart meters would be between £8 billion and £13.4 billion. Meanwhile, the benefits in terms of reduced energy use, lower peak demand, and avoided meter reading costs would add up to between £5bn and £15.1 billion. The assessment further suggests that without intervention, energy suppliers will only install smart meters in 20-30% of cases.
The government has included powers in the Energy Bill to allow it to require extension of smart meters to the domestic and small business sectors, but it will not take a decision on whether to do so until it has a clearer idea of the costs and benefits. In particular it wants to wait and see the results of a research project trialling smart meters that is due to report in November.
Proposals to require historical consumption data to be included on energy bills have also been retained. From 1 January 2009, all domestic bills or statements will have to compare energy use in one billing period with the same period in the previous year. But in a concession to suppliers, the information will not have to be corrected to take account of weather variations. The billing Regulations implementing this requirement were published in May.3