The central platform service provider for Great Britain's smart meter network told the Department for Energy Security and Net Zero (DESNZ) in September 2022 that device technical limitations meant it may not be possible to migrate more than 500,000 smart meters, according to a National Audit Office report published on 14 June 20231. The provider is the Data Communications Company (DCC), which operates the national communications infrastructure that smart meters use to send readings to suppliers1.
The disclosure sits inside a wider account of the rollout's progress. As at the end of March 2023, 57% of all electricity and gas meters were smart, 32.4 million out of 57.1 million1. Of the 32.4 million installed smart meters, 9%, around three million, were not operating in smart mode and were effectively indistinguishable from a traditional meter, meaning they had technical issues, did not send energy use information to suppliers and may not display it to consumers1.
Migration is the process by which meters already installed are brought onto the DCC's central system so they can be operated and read remotely. The report does not state which meters or which manufacturers are affected, how the 500,000 figure was reached, or what happens to a meter that cannot be migrated. Those details have not been reported1.
The report also sets out the government's own history of deadlines, which have moved repeatedly:
| Year | Position set out |
|---|---|
| 2008 | Intention to mandate suppliers to install smart meters1 |
| 2011 | Vision for every home and small business to have smart meters, completion intended in 20191 |
| 2012 | Legal obligation on suppliers to take "all reasonable steps" to install by 20191 |
| 2013 | Deadline extended to 20201 |
| 2019 | Plan for a four-year framework from 2021, giving suppliers until the end of 2024 to reach at least 85% coverage1 |
| 2020 | Proposed framework withdrawn and deferred by one year because of the COVID-19 pandemic1 |
| 2022 | Framework introduced to the end of 2025, with annual individual supplier targets "on a trajectory to 100% coverage, subject to an annual tolerance level"1 |
| 2023 | Consultation on 80% minimum domestic coverage and 73% minimum coverage in small businesses by the end of 20251 |
The report notes that the government had required the rollout to be complete by the end of 2022, and that this was not met1. In April 2023, Ofgem told suppliers they should have the capacity and flexibility of resource to meet their installation targets1.
"In September 2022, the central platform service provider told DESNZ that device technical limitations meant that it may not be possible to migrate more than 500,000 smart meters."
Why it matters for households
A smart meter that cannot be migrated is a meter that cannot deliver the functions that distinguish it from an older meter: automatic readings, half-hourly consumption data and, where an in-home display is connected, visible usage and cost information1. The report's own measure of this is the three million meters, 9% of those installed, already not operating in smart mode1. For a household, the practical effect is that the meter may sit on the wall without reducing manual readings or opening up time-of-use tariffs, and the householder may have no way of knowing its status from the outside.
The report puts the cost of the rollout to energy suppliers at £13.5 billion over 2013 to 2034 and the benefits at £19.5 billion, a net benefit of £6 billion, in 2011 prices, with suppliers passing on some or all of their costs to consumers1. It gives indicative annual savings of £56 for a typical dual fuel household with a smart meter as at March 2023, based on estimated reductions in gas and electricity consumption and assuming the Energy Price Guarantee was in place1. DESNZ expects it is now technically possible for smart meters to function in 96.5% of homes, with a solution for more than 99% of homes due from July 20231. The report does not say whether that solution covers the meters identified as potentially non-migratable1.
What happens next
The report records that Alt HAN technology, which addresses meters that cannot reach the network by the usual route, was being piloted by some suppliers and, subject to the outcome, was due to be rolled out from July 20231. Smart DCC's licence is due to expire in 20251. Ofgem expects industry to have commenced migration to new half-hourly settlement arrangements across the retail electricity market after April 2025, which the report says is likely to make flexibility services and time-of-use tariffs more widespread1.
Sources1 cited
- Update on the rollout of smart meters, nao.org.uk