The voice of the energy industry

Why we need to Get Smart to reach Net Zero

In a recent speech, newly appointed COP26 president -and former Business Secretary -Alok Sharma MP highlighted the critical role governments play in raising awareness of - and generating support for - measures that are needed to tackle climate change.

Meeting the 2050 Net Zero target rests not on any single action, but on a countless range of changes – big and small, behavioural and structural - from governments, individuals and businesses alike. A monumental effort from government and industry is of course needed, but in order to succeed, it requires us all, as individual energy customers, to play our part as well. This is especially pertinent now that we are reaching the stage of the energy transition that will affect our day-to-day home lives far more than the - largely unseen - changes so far.

While tackling climate change is now near the top of the Government’s agenda and central to its Green Recovery plans, this isn’t a new realisation. The transition to a low carbon economy - and the role of households and businesses in achieving that - was at the heart of the Government’s original decision to roll out smart meters across the UK over a decade ago.

The flexible and efficient energy system that we must create if we are to have any chance of reaching the most ambitious climate change targets of any major economy, means enabling customers to play a more active role, to make choices about how their energy services are provided and how they can benefit from the opportunities. Of course, much of this clever stuff will be done for us and however we choose to engage, smart meters will be the tool that underpins this.

Government rightly remains ambitious about what the ongoing rollout of smart meters can achieve, and to drive energy suppliers accordingly – who are equally as committed as the Government to completing the rollout and delivering Net Zero.

However, while public awareness of the urgent need to tackle climate change is growing, unsurprisingly there is a less than complete understanding of what this requires. While we have seen a lot of recent focus on changes to how we heat our homes, how we travel and new technologies, there isn’t enough emphasis on the need for a smart system – one that makes the most efficient use of a diverse and ever-changing generation mix and unleashes the innovative technology available to open up a whole range of new and exciting opportunities for customers. All while bringing enormous overall savings.

Smart meters are fundamental to this and by extension to reaching Net Zero itself. A modern energy system fit for the future can’t happen if we’re still using technology from the last century to measure our consumption.

So more needs to be done to drive customers to take up smart meters and we have urged the Department for Business, Energy and Industrial Strategy (BEIS) and Ministers to link the smart meter programme with all the Net Zero and Green Recovery announcements being made in the run up to COP26 later this year.

Some recent policy announcements present an ideal opportunity to make this link. The recent decision to ban the sale of new petrol- and diesel-powered vehicles from 2030, for example, means that after this date all new cars sold will be Electric Vehicles (EVs) and certain hybrids. As the volume of EVs increases, so too will electricity consumption, and a genuinely smart energy infrastructure will be needed in advance of 2030 to provide the detailed insight we need in readiness for this milestone. EVs offer possibilities way beyond the traditional car for both customers and the energy system - but only if the nationwide rollout of smart meters across in all homes and businesses is in place.

Meanwhile BEIS is in the process of considering how it will set its expectations on suppliers to continue the rollout to mid-2025. We have worked with an independent economics research agency to scrutinise the BEIS model for setting minimum suppliers’ annual targets and reporting thresholds, and have recommended changes that ensure these are realistic. Obviously, the pandemic continues to have an ongoing effect on these assumptions and it is in everyone’s interest that the targets are demanding but achievable.

Although delays have been a frustrating if inevitable feature of a complex, technical and nationwide programme, we have seen positive progress over the last year with the Government and industry working together to confront a number of challenges, not least continuing the rollout safely during the COVID-19 pandemic. Customers are continuing to have smart meters safely installed and for prepayment customers in particular, being able to top up from home has been absolutely invaluable.

But we still need many more customers to get on board in order to install smart meters right across the 30 million homes and businesses around the country. Customers have the choice to refuse a smart meter or fail to respond when asked – but if we don’t get widespread take up, we don’t get the full potential benefits for the whole energy system, and crucially for all customers, and we can’t meet Net Zero.

So we are urging the Government to be far more upfront in explaining to customers why the smart meter programme is so essential and how it will benefit them, and to explore simple measures, embedded in the wider Government policy framework, that will encourage widespread take-up.

Energy suppliers have committed to improving the customer side of the rollout, but there is a natural limit on what we can achieve if there is resistance and scepticism amongst those customers yet to have a smart meter. This is where the Government can, and must, play a role by being brave enough to back the programme at every opportunity and level with customers about what needs to be done.

With COP26 meeting in Glasgow this autumn, that requirement should start now.

Emma Pinchbeck, Chief Executive

Energy UK

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