UK: Millions of smart meters may need replacing due to IT blunder; any solution will add hundreds of million pounds in costs

“We have a smart meter trilemma: if we don’t roll out smart meters we can be fined. If we do, we know we could be offering a sub-par consumer experience. And all the while we’re told by BEIS to never mention the costs.”

BEIS is the Department for Business, Energy and Industrial Strategy.

From the Telegraph

By Katie Morley, Consumer Affairs Editor
May 5, 2017

Millions of smart meters installed in British households under the Government’s flagship scheme may need to be replaced due to an IT bungle.

For the first time major energy suppliers have admitted that some of the 8 million “first generation” smart meters fitted in households are incompatible with a new national communications network, which links their systems to the devices.

A row has broken out after the government last night denied that the meters would need to be replaced.

Estimates show a worst case scenario in which every smart meter has to be replaced would add as much as £100 to every UK household’s energy bill, although sources said this was unlikely.

Meters not connected to the system “go dumb” when consumers switch energy suppliers to get a better deal, meaning they are no better than traditional meters as customers have to rely on estimated bills.

Under the Government’s £11bn smart meter programme every household in the UK will have been offered a device by 2020. Energy suppliers which do not comply face heavy fines.

Last night consumer experts described the smart meter roll-out as a “cock up” while sources at major energy firms admitted the cost was “spiralling” despite customers receiving “sub-par experiences”.

Until now the Government had presumed that the problem of “first generation” meters going dumb would be fixed as they could easily be connected to the system through simple computer programming.

But now it has emerged that many are incapable of being adapted to the central system, meaning they will have to be replaced.

It has also emerged that an unknown quantity of other meters may require expensive engineer visits to be brought onto the system.

To avert a potential multi-billion pound blow the operator behind the scheme is mulling various IT solutions. But even a programming overhaul would come at a cost of £500m, according to a consultation paper seen by the Daily Telegraph.

A year-long delay in the introduction of network, known as the Data Communications Company over “technical issues” also means millions more old-style smart meters than planned have been installed, further raising costs.

Speaking confidentially to this newspaper senior sources at major UK energy firms spoke out about the scheme’s failure.

A senior source at one major energy supplier said: “We have a smart meter trilemma: if we don’t roll out smart meters we can be fined. If we do, we know we could be offering a sub-par consumer experience. And all the while we’re told by BEIS to never mention the costs.”

An executive at another large provider said: “Some homes will need to have a new meter installed. Whatever solution we find is going to add huge costs on top of the £11bn estimate. We’re talking hundred of millions of pounds to fix this mess.

Speaking to this newspaper in March, Smart Energy GB, which promotes smart meters in the UK, denied that any first generation meters would need to be replaced and suggested they would easily be able to be “enrolled” onto the network.

A Data Communications Company spokesperson said: “DCC was granted a licence by the Department for Business, Energy and Industry Strategy (BEIS) to build and integrate a national telecommunications network for SMETS 2 meters. This highly advanced national network went live after rigorous testing at the end of 2016 and DCC is now consulting on enabling the first wave of smart meters (SMETS1) to access the benefits of the new national network.”

Martin Lewis, founder of, said: “The rollout of smart meters has been a cock up and a catastrophe. Energy firms are now using it as a soft form of trapping people into poor deals as they can’t switch providers without their meters going dumb.”

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “SMETS1 meters will not need to be replaced. The Data and Communications Company will enrol these meters into their system, so that they can work in smart mode when consumers switch suppliers.”

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