The extension will ensure that the rollout will be carried out effectively, according to the Government.
According to the Smart Meter Bill, which was contained in the Queen’s Speech last week, the rollout is making “good progress” and the requirement to offer a smart meter to all households and businesses by 2020 remains in place. Smart meter adoption will not be made compulsory for households.
However, it also adds a five year period to “extend the Government’s ability to make changes to smart meter regulations, making sure the rollout is delivered effectively, and that benefits are maximised into the future”
A Special Administration Regime will also be established under the bill to ensure the continuing operation of the national smart meter service if the provider becomes insolvent. Currently this service is performed by the Data and Communications Company.
While the Bill does not state plans for an extension to the deadline for energy suppliers to offer smart meters to households and business, some industry leaders say that it may provide for future flexibility on deployment targets and the industry supply chain.
Smart meter programme already a failure?
A report in September from the Science and Technology Committee suggests that while there are major national benefits, such as a smarter and more secure grid and reduced pollution; smart meters are likely to save individual consumers only a small amount of money on their energy bills.
The report suggested that the Government needed to work harder to convince households of the true benefits of the rollout.
There is also the "unresolved" problem of early meters installed in the first phase of the rollout losing their "smart" function when the customer switches supplier, noting that more than three million meters are already in place.
Last month, the UK’s Institute of Directors called for the next government to shelve the smart meters programme to avoid "mushrooming" costs.
The organisation said: "The programme has already failed to deliver interoperable meters for switching, is behind schedule, is over-budget and wedded to out of date technology.” It added that the legal obligation on suppliers to install potentially incompatible meters by the deadline of December 2020 or else pay large fines is already resulting in inflationary costs in wages and advertising.
It called for "an urgent pause and thorough review" and for policymakers to revise both EU-derived legislation and the 2020 rollout timetable.
UK’s smart meter plans to date
By 2016, over 4.9m smart meters were operating across the UK, according to Government figures.
Previously, EU rules stipulated that smart meters should be installed in 80% of homes by 2020. In 2009 when the initiative was announced the then Department for Energy and Climate Change said that it wanted to see 100% rollout of 47m meters in 26m properties by 2020.
The government says that the rollout will provide an annual saving of £300m in 2020 across all households, rising to £1.2bn a year in 2030.