June 30, 2011 / 8:08 AM / 8 years ago

User benefits of smart metering to be limited

LONDON (Reuters) - The UK’s net economic benefit from implementing smart meters by 2030 could reach 7.3 billion pounds, but it may only save the average consumer 23 pounds a year, the National Audit Office (NAO) said on Thursday.

The Department of Energy and Climate Change (DECC) plans to install smart electricity and gas meters in all homes and smaller non-domestic premises between 2014 and 2019 at an estimated cost of installation and first operation of 11.3 billion pounds.

In a report to the government the NAO said that the total potential benefit for the UK could be 18.6 billion pounds by 2030.

DECC expects that consumers with smart meters will use 2.8 percent less electricity and 2 percent less gas than those without the new equipment.

But the NAO report said that customers with smart meters would only save 23 pounds a year by 2020-a monthly saving of under 2 pounds-and only if suppliers passed on the efficiency improvements to their customers, and if the new equipment led to a reduction in customer energy use.

While the roll-out cost of smart metering would be borne by energy suppliers, the NAO said that it expected suppliers to pass implementation costs to their customers.

The NAO also warned that the benefits were still uncertain as unrolling costs could escalate and there was limited evidence that it would change customer behavior in their energy use.

“Smart meters could help us all cut our energy consumption but government’s track record on delivering large programmes is patchy at best,” MP and Chair of the Committee of Public Accounts, Margaret Hodge said, and added: “At the moment the estimated cost is 11.3 billion pounds, but all our experience suggests that this budget will be blown.”

The NAO report said that the benefits of proceeding with this undertaking was still uncertain.

“There is limited evidence of how much and for how long British consumers’ behaviour might change, and costs could escalate,” NAO head Amyas Morse said.

The report also said that DECC had yet to demonstrate the full value for money of smart metering as its early planning and budgeting were insufficient to support clear monitoring and accountability.

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