Scotland loses out in installation of cost-cutting energy smart meters

A comparison of the government statistics against regions of Britain shows that Scotland shares the lowest levels of the meters with London at 43%.

East Midlands tops the table with 62%, with the north east of England at 61% and the east of England at 60%. Some 56% of meters in Wales are 'smart'.

Energy Action Scotland said smart meters are essential if Scotland is to meet not only its net zero ambitions but also its fuel poverty targets.

And it has criticised moves to fine energy firms for failures - saying it will become another cost to the business.

READ MORE: Over 1200 more Scots treated for hypothermia in energy bills crisis

Scots firms were amongst six that were hit with £10.8m in penalties for not meeting targets for the installation of smart meters.

The energy regulator Ofgem said Glasgow-based ScottishPower and Perth-based SSE were among six that fell short of the target for 2022 by more than a million smart meters – the first of the Government’s four-year plan launched in January 2022.

Ovo, Bulb, E.On, and British Gas which trades as Scottish Gas north of the border, have also received penalties which will go into Ofgem’s Energy Industry Voluntary Redress Fund (EIVRF) which is used primarily to help vulnerable consumers.

ScottishPower was hit with a £1.24m penalty, while SSE was received a £252,000 'fine'.

Scottish Power agreed to pay a further £440,000 into the EIVRF in relation to its smart metering obligations for 2019.

British Gas is paying out the most a £3.4 million, followed by Ovo at £2.4 million and Bulb, which was bought out of administration by Octopus in December 2022, at £1.8 million.

Smart meters are expected to cut a total of £250-a-year on average from dual-fuel bills between 2013 and 2034, according to government figures. These savings will come mainly from energy suppliers receiving fewer customer enquiries and making fewer home visits, and, in principle, should pass on these savings to customers.

The Government set the industry annual minimum goals to roll out smart meters, as they are seen as being an important part of reducing energy usage and switching to a more flexible energy system.

Smart meters allow households to track energy usage and access smarter tariffs that can save money by encouraging energy use outside peak times or when there is an excess of clean electricity available.

The failure in installing smart meters has been partly blamed for past problems in getting millions of lifeline Government energy support help.

First rolled out over 10 years ago, over half of all meters are though to be smart and advanced meters, with 32.4m installed across the UK.

Suppliers were expected to replace all traditional meters with smart ones by 2025.

The current target is already a watered-down ambition from the original plan to fit a smart meter in every home in the country by 2020.

Frazer Scott, chief executive of Energy Action Scotland said the current rates of install are "too low" and in rural Scotland only about 28% of households have a smart meter and in Shetland only 7% have smart meters.

"Whilst the meters in themselves do not reduce fuel poverty they can provide information to help households make better choices, enable people to take advantage of cheaper energy when it is available, make it easier to change supplier or switch to a better tariff and can reduce costs within bills associated with the continuing need for manual meter reading.

Frazer Scott, chief executive of Energy Action Scotland (above)

"Low carbon heating and domestic level energy generation through technologies including solar need smart meters to maximise their efficiency," he said.

"I don’t believe that fines for companies is the right way forward as it simply begins to normalise these failures to meet targets. The fine then becomes just another cost of doing business. Consumers need and deserve a stronger response from the regulator that ensures that progress is made."

Like traditional gas and electricity meters, smart meters measure the energy use of your household.

The main difference between them and traditional energy meters is that they automatically send energy usage information over wireless networks - similar to mobile phone networks - to the supplier.

They are replacing analogue energy meters across the country and come with an in-home display which shows energy usage in pounds and pence, in near real-time.

They help to control energy use, by showing exactly what is being spent with no more estimated bills or supplying meter readings.

It is expected to remove the costs of meter readings, which are currently added to bills.

Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “Smart meters can be a vital way for consumers to understand their energy use and therefore reduce bills, but the roll out has been beset by delay and failure.

“Added to this, customers are rightly worried about how smart meter technology can be used by energy firms to switch people onto a prepayment mode at short notice.

“Until we have proper support in place for those on energy debt and an Emergency Energy Tariff for those struggling with energy bills, it’s unlikely that public confidence in our energy system will be improved.”

Since October 2022, millions of eligible English, Scottish and Welsh households were to receive £400 off their energy bills in six monthly instalments of £66 or £67.

But there were concerns in May that at least 50,000 of the most disadvantaged in the country had lost out through the Energy Bills Support Scheme (EBSS) - because the money had not reached them.

The scheme ended in March, but anti-poverty campaigners were concerned in that almost half a million payments have yet to be made by energy firms to Scots consumers.

Based on figures for the first five months of the scheme, more than one in four energy vouchers issued for those with pre-payment meters were not cashed in.

The trade association Energy UK said they believed that part of the reason smart meters are not installed in some areas of the UK is because of weaker radio or mobile signals.

It said: “Smart meters are an essential piece of kit for homes and buildings across Great Britain as we build a modern flexible energy system. The benefits are wide ranging – from giving customers a better service by supplying and measuring energy use accurately and giving automatic readings,  through to making it easier for people to try new tariffs that that reward them for shifting their energy use across the day (as shown by the returning Demand Flexibility Service) as well as unlocking access to other new products and services.

“There are currently areas of the UK, such as some parts of Scotland, where weaker radio or mobile signals mean there are homes where smart meters cannot be installed yet. Work is continuing to improve coverage in these areas so that more customers can enjoy these benefits and we would still encourage customers to contact their supplier to see if they can have one installed.  

“Energy suppliers remain fully committed to completing this programme and treat the targets very seriously. In addition to these technical challenges however, installing a smart meter in every remaining home in the country to complete the upgrade also means - as the industry has already warned - they are now trying to encourage more reluctant customers to engage. The operating environment is complex, with challenges recruiting sufficient numbers of installers and other issues and delays with the supply chain. While speed is important, it is also vital to closely monitor costs that are ultimately borne by customers and ensure the benefits continue to stack up.                  

“We continue to press the Government to take a more sophisticated approach to the current hard targets which are inflexible and incentivise the wrong activities – for example prioritising new installations over fixing existing meters. Having dual systems and infrastructure to cover both traditional and smart meters increases costs for everyone – Energy UK urges the Government to do everything it can to encourage take-up.”

The UK Government says the new meters enables those on older prepayment meters to top-up remotely without leaving home.

They describe the replacement of traditional gas and electricity meters as an essential national infrastructure upgrade that would help make the country’s energy system “cheaper, cleaner and more reliable”.

They say smart meters enable technologies such as solar, heat pumps and electric vehicles to be efficiently integrated into homes and the energy system as they provide access to "innovative tariffs, allowing consumers to save money by using energy away from peak times or when there is excess clean electricity available".

Cathryn Scott, director of enforcement and emerging issues at Ofgem, said: “The installation of smart meters is a vital step in the modernisation of our energy system and the path to net zero by 2050 “Smart meters give customers better information about their energy usage helping them budget and control their costs.”