AS the SNP Government tries to limit the fallout from the fire alarm fiasco it is responsible for a plan dreamed up in Westminster continues to add to the pressures facing householders.
Scotland’s housing secretary, Shona Robison, provoked consternation and anger with her decision to proceed with the implementation of new fire regulations in Scotland from Tuesday.
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These introduced a requirement for householders to ensure they had interlinked fire alarms installed in their homes although specialists said the measure went way over the top.
After facing a barrage of criticism for the move, which could cause anxiety for many vulnerable people and leave them facing hefty bills, the Scottish Government made what looked like a half-hearted attempt to address such concerns.
On Sunday it announced that it would provide an additional £500,000 funding which it said would help more elderly and disabled people to install alarms.
While the move amounts to a clear recognition that the scheme could cause big problems for many people, the funding looks like a drop in the ocean in view of the potential number of homes involved.
At the same time the latest news about the flagship smart meter scheme introduced by the UK Government to support the net zero drive raised fresh questions about what has long looked like an expensive gift that keeps on giving for international investors.
The Conservative Liberal Democrat coalition government decided to go ahead with a plan to require energy firms to install smart meters in all the UK’s homes and small businesses, in the expectation that these would provide a massive boost to the effort to cut emissions by reducing energy wastage.
The original target was for the rollout to be completed by energy firms by the end of 2020. However, after the take-up rate for the meters proved to be much lower than expected the deadline was put back to 2024 and then June 2025
The latest update from officials suggests that progress remains painfully slow.
In a report issued in November, the Department for Business, Energy and Industrial Strategy said there were 26.4 million smart and advanced meters in Great Britain in homes and small businesses at the end of September.
It noted: “A total of 47% of all meters were smart or advanced meters at the end of the quarter; an increase of two percentage points from the last quarter.”
If that sluggish rate of progress is maintained the June 2025 target will be missed by a mile.
In defence of the scheme, the Government might say the pandemic made it hard for energy firms to get meter fitting work done. The turmoil in the energy market caused by the spike in gas prices may have caused additional complications, with a slew of energy suppliers going under.
On the other hand the spike in gas prices will have encouraged many people to look to cut down their usage, potentially increasing interest in smart meters.
However, the body that was set up to encourage uptake has offered a sober assessment of the outlook for the scheme.
Smart Energy GB describes itself as “the not-for-profit, government-backed campaign helping everyone in Britain understand the importance of smart meters and their benefits to people and the environment”.
In its annual consumer engagement plan and budget the organisation says: “The broad context for 2022 is that the rollout will be more challenging.
“There are stretching supplier installation targets starting in January. Suppliers have converted their lowest hanging fruit and Rejecters are an increasing percentage of the uninstalled base.”
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Against that backdrop, Smart Energy GB has budgeted to spend £38.3 million this year including £3.1m on creative development and £2.4m on public relations.
It will face an uphill task as consumers grapple with the challenges posed by the fallout from the pandemic. With all the uncertainty that people face, signing up to get a smart meter installed is unlikely to be a priority for many.
The creatives the organisation engages will have to come up with something very special to persuade sceptics that smart meters do anything more than tell one things that are blindingly obvious, such as that long showers and marathon ironing sessions use up lots of energy.
And yet because energy suppliers can recover the cost of smart meters through the bills they charge the costs of the programme adds to the pressures on consumers.
The biggest winners look likely to be the businesses that energy firms are relying on to supply and install meters for them, under contracts that generate long term revenue streams.
These include Glasgow-based Smart Metering Systems (SMS), which has grown to become a business valued at £1 billion on the London Stock Exchange.
In a trading update issued on Friday, SMS said its 2021 underlying profit before tax is expected to be marginally ahead of consensus, after being upgraded in September.
The company highlighted the fact its index-linked annual recurring revenue grew 11.6% to £85.9m last year, from £77m in 2020, noting: “While the failure of some energy suppliers has resulted in movement in our customers’ metering portfolios the net impact on the Group’s pipeline has been negligible.”
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The company also noted that its installation run rate had recovered strongly from the disruption caused by Covid-19. It had 1.7m domestic meters in its portfolio at the year end.
The outlook appears bright enough for directors to be planning to increase the company’s full year dividend payout by 10%, to 30.25p per share.
The company was left with cash in the bank after clinching a deal to sell just 187,000 of its meters to funds managed by the Equitix private equity business for £291m.
This was announced on March 12 2020, around two weeks before Boris Johnson imposed the first lockdown.
Private equity investors have acquired other smart meter firms in recent years, including Livingston-based Energy Assets and Manchester’s Calisen.
Smart Metering Systems raised a further £175m from institutional investors in September to capitalise on opportunities in the smart meter and large-scale battery markets, declaring: “This next stage of SMS’ growth is expected to deliver attractive returns to our shareholders.”
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