Thousands of Scots households face the spectre of higher energy prices amounting to hundreds of pounds a year as key moves to change what people pay falters.

The energy regulator Ofgem has raised concerns that approximately 1 million homes, mostly in rural Scotland and some parts of England and Wales, are still reliant on the Radio Teleswitching Service (RTS) which enables electricity suppliers to switch meters between different energy tariffs such as Economy 7 or Economy 10 and helps deliver specific savings for customers who use electricity for their heating and hot-water provision.

The BBC radio service that supports RTS meters is due to be switched off at the end of March and despite industry discussions which ran from last year no agreement has yet been reached over any extension.

Meanwhile, Scotland is at the bottom of the British league table over the installation of smart meters, which is due to replace RTS, and the regulator has now written to energy suppliers raising concerns at the speed of the roll out.

They say it puts vulnerable consumers, many of whom are prepayment customers, at a disadvantage as they are unable to benefit from cheaper energy.

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

READ MORE: Scots to lose out on £42m in lifeline energy bills crisis help

The BBC radio service that supports RTS meters is due to be switched off at the end of March as plans to roll out the smart meters across Scotland that allows existing heating and hot water to work without needing to use the radio signal falters.

There had been discussions at the end of last year to extend put off the switch off of RTS into 2025, but UK government sources have said that no agreement has yet been reached.

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They say discussions are ongoing to secure the continued operation of RTS beyond the end of the current contractual period end in March.

The government says it expects energy suppliers to upgrade to smart meters in good time in advance of the switch off.

Amanda Solloway, the parliamentary under-secretary of state for energy security and net zero, has told one Scottish MP: "Households should contact their energy supplier to arrange their upgrades as soon as possible so they can continue to benefit from multi rate tariffs."

The latest official analysis reveals that just 43% of electricity meters were 'smart' in Scotland as of March 31, 2023 compared to 55% for Great Britain.

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 says that thousands particularly in the Highlands and Islands could be hit hardest by the RTS switch off with annual bills going up by typically by as much as between £400 and £500 if action is not taken.

Frazer Scott, chief executive of Energy Action Scotland said: “It is unacceptable that households that currently rely on the RTS service that interacts with their energy provision are left in this uncertain position. This technology is old and outdated. It is beyond its working life and as it stands it is at risk of failure.

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"Should the system stop then some of the households that rely on it will simply have no access to energy to heat their home. Their heating will not work. Others will continue to receive energy but will not benefit from some of the automatic features that ensure that they pay a lower rate during off-peak periods.

"Smart meters are the solution to this situation, but Scotland is far from where it needs to be. In the areas where the RTS operates there is an even lower rate of smart meter installation. Less than 1 in 10 households in Shetland have a smart meter, yet many are still dependent on the outdated RTS signal.

"Households should not be left out in the cold, and it isn’t right for governments to put the burden of responsibility on to households for this necessary upgrade. Government and the energy industry need to provide a robust and resilient energy supply to all our communities. The smart meter rollout needs to accelerate, and people need supported to maximise the benefits that this can bring."

Ofgem, in a letter from Melissa Giordano, deputy director for retail systems and processes, has outlined her concern at the speed of progress.

Ofgem said it expects that all RTS meters must be replaced with smart meters at least three to four months before the revised close down date, and that operators should not delay this work any further.

An Ofgem spokesman said: “Smart meters bring immediate benefits for customers, helping them to access more competitive tariffs. It also makes it easier for suppliers to spot when households might be struggling with bills and offer support such as emergency credit. “We have written to suppliers to raise our concerns about the slower progress of installations for smart prepayment meters, and the potential impact of that on vulnerable households.”

The issue has become more problematic because Scotland is at the centre of geographical divide controversy over the installation of smart meters which is leaving some parts of the nation with just 7% coverage.

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Four of the five local authority areas of 370 across Britain with the lowest coverage of smart meters are all in Scotland, and were among the areas of the country with the highest levels of fuel poverty.

Shetland Isles has 7% coverage, the Western Isles council area of Comhairle nan Eilean Siar and Orkney Islands was at 9% and Argyll and Bute was at 20%. Only the Isles of Scilly has a lower coverage at 5%.

According to Department for Energy Security data just four of Scotland's 32 local authority areas have smart meter coverage of over 50% - West Lothian (51%), North Lanarkshire (51%), Midlothian (52%) and East Ayrshire (54%).

The BBC has had a long-standing relationship with the Electricity Networks Association (ENA) to transmit Radio tele-switching data on 198kHz alongside the BBC Radio 4 Longwave signal.

However, the BBC announced in 2011 that the equipment used to transmit the longwave radio signals from its station in Droitwich could no longer satisfactorily maintained and would be not be replaced.

Energy suppliers use it to switch electricity meters between different tariff rates at different times of the day. For example, this could be to send start and stop times to Economy 7, Economy 10, and storage heaters.

Read more from Martin Williams:

The number of homes reliant on this signal was expected to reduce as the roll-out of smart meters progressed. The UK government announced in 2008 that energy suppliers would be responsible for fitting smart meters.

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 will remove the costs of meter readings, which are currently added to bills.

The trade association Energy UK has 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.

Energy UK said that they expected the deadline over the switch-off to be extended.

A spokesman said: “Suppliers are very aware of the importance of ensuring households with RTS are converted to smart meters before the switch-off.

"Suppliers are contacting households with RTS to arrange smart meter installations and we would strongly encourage customers to respond without delay. Equally any customers who think they might be affected by this should also get in contact with their supplier as soon as possible.

“Smart meter installation rates do vary across the country, in part due to technical issues and other challenges, and suppliers are working hard to overcome these. Suppliers are keener than anyone to complete the roll-out and increase installation rates but it should also be remembered that customers have no obligation to have a smart meter fitted when one is offered. So it’s important for all those involved in the roll-out, as well as consumer groups, to keep stressing the benefits of a smart meter and look at all possible ways to encourage further take-up.”