Last week the UK’s Department of Energy and Climate Change announced that the smart metering deployment was facing another 12 months delay. That’s 18 months after they announced that the UK’s smart metering deployment was facing another 12 months’ delay.
However, this is not all bad news. It means that the growing population of consultants within DECC can look forward to what is fast becoming a never-ending gravy train of consultancy work, public consultations and project reviews.
Smart meters – any practical value?
For the consumer it’s likely to mean more unnecessary costs heaped onto future energy bills. But not until after the next election, so nobody in Westminster really cares.
Despite the charade of one step forward, one step backwards, we still don’t know whether the deployment will have any practical value. There is no EU mandate for it – individual countries need to show that smart metering is cost effective. The first DECC survey showed it was not, but DECC mandarins then fudged the numbers (not my phrase, but that of an involved MP), since when they’ve spent a considerable amount of time and effort in concealing what’s behind their calculations.
The approach of “DECC knows best” has resulted in the most complex and expensive smart metering scheme in the world, which appears to be beyond the ability of both suppliers and utilities to deliver.
Freedom of Information tribunal not very revealing
I was recently invited to attend a Freedom of Information tribunal where DECC had been asked to reveal one of the documents which might have explained how they came up with their optimistic numbers. Whether it would or not we don’t know, for two reasons:
The first is that without knowing what’s in the document you can’t tell whether you’re asking for the right one (a cunning trick indeed), and secondly because DECC’s immediate response was to redact around 13 out of 20 pages of the document.
At the tribunal, a DECC civil servant argued that it was necessary to keep the contents of this document secret, because if they were made public, the SRO who wrote it would be identified and they might be openly criticised or even questioned about how they reached their conclusions. At the time I didn’t know what an SRO was. I’ve since discovered it means Senior Responsible Officer. Whilst I might have had some sympathy for this line of argument if the report had been put together by some office junior, I would have thought that the use of words like “Senior” or “Responsible” in a job title would have implied a certain degree of competence and responsibility.
He also made much of the fact that DECC consults widely on the smart metering programme. Having been involved in many of these consultations I’ve come to realise that DECC uses a special civil service version of the word, which is effectively a conflation of condescend and insult.
It is certainly true that anyone can respond to the consultations; anyone, that is who regularly visits the DECC consultation website, as most of the consultations are posted with no fanfare and have very short reply windows. However, the bland “we consult widely” theme is used to conceal just how limited the input to DECC strategy and the resulting specifications really is. To participate in their smart metering working groups you need to be an energy supplier or a representative of a well established trade organisation. Once you’re a member of a trade organisation, you’re politely informed that you should not respond independently to a consultation, as the trade body needs to give a consensus view that invariably represents the bulk of its membership, i.e. those with the greatest vested interest.
The DECC working groups are generally chaired by representatives of the major consultancies who are working for DECC and who, with few exceptions, are happy to limit discussion to those within the small inner circle of members who will benefit most from shaping the program to what they want. They then call in the same friends and experts whenever there is a parliamentary review of the process to confirm that everything is hunky dory. It’s a neat system to minimise critical review, divert political scrutiny and serve the purposes of those who will benefit most from subverting the process to their own ends.
Which brings us back to the Freedom of Information request. As far as anyone can tell, DECC is an evidence-free zone. Having made up some spurious cost benefits, they’ve let elements of the industry lead them by the nose into concocting the most complex system anywhere in the world.
Cybersecurity concerns and other reasons for delays
Last year’s delay was caused by concerns about security, or rather the lack of it. Since then, hackers have demonstrated how it’s possible to hack into Spain’s smart meters, so don’t be surprised if there’s another rescheduling of the UK deployment next year for a further security review.
Last week Francis Maude was speaking at the Cyber Security Summit in London. He offered the shrewd advice that “Often contracts are too big and long. In IT, no contract should be more than £100m, with no extensions to contracts, so we can keep up to date.” The delay that has just been announced by DECC is due to the complexity of implementing the Data and Communications Centre (DCC) – the central switch that controls and reads meters before passing data to the appropriate utility.
Last September DECC awarded a 12 year, £175 million contract to Capita to construct and run the DCC. (I presume that Francis Maude was not consulted.) In the following twelve months Capita have presumably had time to read what they’d promised to deliver and had the proverbial “Oh no!” moment before asking for an extension and an extra £90 million. Inflating the cost by over 50% in a mere twelve months is quite audacious, some might say scandalous, even for a seasoned player like Capita. It makes you wonder whether they’d even bothered to read the specification before quoting, and also how DECC evaluated the bid and the bidders.
We only have the DCC because in the UK smart meters are being rolled out by energy suppliers rather than the energy networks. That approach adds complexity for two reasons:
First, you need a central clearing house to manage all of the meters and make sure the meter data gets to the right place, which is the DCC. Secondly, and rather more interesting, is that it means that all meters and everything connected to them must be interoperable, so that they work regardless of a consumer’s supplier and who fits them. That second requirement has doubled the cost of UK meters compared to any other country in the world.
We’ve yet to see a delay resulting from the interoperability issue. My guess is it will be the cited reason for the 2017 delay announcement. Which is why it’s important to get some evidence to explain why DECC is throwing away any learning or experience about smart meters from anywhere else in the world in order to pursue its own, unique strategy.
According to DECC, smart metering is effective because it will save energy for consumers. They’ve produced precious little evidence to back that up – it’s a political assertion. That’s not to say the evidence is not there. British Gas has installed more than one million smart meters. It’s questionable whether any of those meet DECC’s specification, so they may all need to be replaced, but they have been monitoring people’s energy usage. The households they cover are not necessarily representative of the nation as a whole, as British Gas has cherry picked customers using smart meters as a marketing tool. There’s nothing wrong with that and they should be applauded for doing something whilst the rest of the industry does nothing. If British Gas were to release the anonymised energy usage data for those 1 million customers along with baseline data for another million similar households for independent analysis we’d be able to see whether smart meters have any effect on energy savings. That would tell us whether DECC’s figures are valid, or mere fiction. However, British Gas seems to have lost much of its enthusiasm for smart metering. The original team pushing it has gone, their IT department hate it and their attention has moved elsewhere.
The elsewhere that British Gas has moved to is to develop a smart thermostat, which can help users save significantly more money that they will manage from having a smart meter. Rather than bundle this into their smart metering operation, British Gas has hived it off to a new subsidiary called Hive.
Irrespective of how much they paid for that flash of marketing genius, Hive is a nice product. It’s a shame that it’s incompatible with my British Gas boiler, but that tells you everything you need to know about the industry’s understanding of interoperability.
Squandering taxpayers’ money
There are good reasons to deploy smart meters, especially electricity meters. They provide valuable information that can be used to manage a more distributed grid. But it looks as if the UK program is chipping away at the useful functionality that smart meters should provide in order to meet DECC’s requirements on deployment dates, turning them into simple AMR meters which will do little more than perform automatic meter reading. It was never cost effective for the industry to deploy these. However, they’ve realised that DECC has given them the opportunity to do it and charge the consumer under the guise that they should have been smart.
It’s all part of our current energy policy, which is coming to resemble Swift’s satire of extracting sunbeams from cucumbers. That’s probably the only renewable energy policy that DECC has not tried funding, but now I’ve brought it to their attention, they might. From feed-in-tariffs to keep the voters happy to offshore windmills that are about as effective as treadmills for mermaids, we have a department that is out of control and prepared to squander taxpayer’s money on anything that can be claimed to save energy, ministerial face, the climate or the world.
Perhaps they should read the article that Ross Konigstein and David Fork have just published in IEEE Spectrum. They’re both long term developers of renewable energy who write in a carefully considered article that “We had shared the attitude of many stalwart environmentalists: we felt that with steady improvements to today’s renewable energy technologies, our society could stave off catastrophic climate change. We now know that to be a false hope. Renewable energy technologies simply won’t work; we need a fundamentally different approach”. Which suggests that the Department for Sunbeams from Cucumbers needs to start thinking hard about a Plan B.
Our energy security is too important to be left in the hands of civil servants who deny the concept of senior or responsibility, let alone the idea of an evidence base for their programmes. I call on the Government to comprehend this and review the smart metering programme and also ask British Gas to provide an evidence base by making data on their own smart metering experiment public.