Having delayed the Fiendishly Complicated United Kingdom Enduring Deployment** of Smart Meters earlier this year because of technical delays, you might expect that the British Government would have spent some time reviewing the technology they had mandated. If they had done so, it would have become clear that the program was out of control. Under the surface, too many cooks have ratcheted up the technical complexity to the point where it is no longer fit for purpose. However, it appears that no-one wants to point out that the Smart Metering Emperor is stark naked. That’s largely because those overseeing the programme don’t have the depth of technical knowledge to understand the implications of what is going on.
I’ve been involved in the program over that last six years and watched the good intentions be subverted by those who either don’t want smart metering, those who don’t understand it, or those who are happy to take the money and run. It’s not a pretty picture. It drove me to write this report about what has gone wrong in the hope that someone might notice the mess we’re getting into and think again. I can’t really claim to be a whistle-blower; so many have already blown the whistle that it appears either to have worn out, or prematurely deafened those who should be listening. The losers are the consumers. At the point where politicians are beginning to contemplate easing the burden of the green levy on domestic users, the smart metering levy is waiting in the wings to become the last straw in domestic energy policy that could break Government. But, as always with big Government driven IT programs, whilst there’s money to be made by the metering industry and consultants, momentum rules. To those in charge, it seems perfectly justifiable to carry on and saddle consumers with a £12 billion white elephant which will further inflate domestic energy bills. As a result of this lack of due diligence, smart metering is firmly on course to be the next big UK Government IT disaster.
It’s not that there’s a fundamental problem with smart metering, but there are massive mistakes in the way that the UK has decided to do it. When the programme started, it was seen as world-leading. It should have set a global standard for smart metering, giving UK plc a commanding lead in exporting expertise to the rest of the world and creating long term employment opportunities. Instead it has resulted in an out-dated, over-complicated system which will be incompatible with any other solution in the world, cost more than any other, fail to deliver the promised customer benefits, add risk to our energy security, threaten jobs, further alienate customers and make the UK energy industry a laughing stock.
If we look at the issues, the GB smart metering program appears to have a unique capacity not just to duplicate major errors from previous Government disasters, but to combine many of them into one overarching Government- destroying fiasco.
There is a parallel with other UK Government led IT disasters, where a focus on the overall benefit obscured the failures of the underlying technology strategy. The NHS spine is a good example. Nobody denies the benefit it could have delivered had it worked. Smart Metering appears to be a close cousin, where there is a major disconnect between the strategy and the implementation. As with the NHS Spine, those at the top failed to comprehend that the underlying technical detail was out of control. In both cases, the specifications lost sight of the benefits and users of the system. Government departments, working way beyond the limit of their technical knowledge allowed vendors to introduce arbitrary new features.
The same pattern is apparent with smart metering. Unsupervised specification creep allowed has allowed utilities and vendors to play a game of technical one-upmanship reminiscent of schoolboys competing to see how high they can pee up a wall. In a further twist, nobody appears to be asserting long term ownership and control of the GB metering specification, allowing it even more scope for constant change, largely defeating its purpose of defining an interoperable standard.
As with the NHS, many within the industry are only paying lip service to the programme. Most utilities don’t want smart metering. In fact they seem to have used the wrong dictionary. It is difficult to find anything smart about the UK deployment, until you realise that the utilities use smart in the sense of “it hurts”. They consider they have a perfectly adequate business model which has no need for new technology. In many Government meetings, their reluctant support seems to be a veneer for the hope that it will all end in disaster, letting them go back to the world they know, of inflated bills and demands for money with menaces. That brings back another parallel with the medical profession’s quiet but relentless opposition to the Summary Care Records scheme which eventually brought it to an ignominious end.
Even when smart meters are deployed, there is no evidence that any utility will use the resulting data to transform their business, rather than persecute the consumer. At a recent US conference a senior executive for a US utility which had deployed smart meters, stated that their main benefit was “to give them more evidence to blame the customer”. That’s a good description of the attitude displayed by our utilities.
The other challenge is the eternal one of calculating the financial benefit. Whilst everyone expects Government projects to overrun and under-deliver, smart metering takes this to a level which makes the HS/2 assessments look like models of financial prudence. Successive analyses have shown no net benefit, so DECC has made up illusory benefits in an attempt to justify the smart metering deployment. Each of these has needed more unproven technical complexity to be incorporated into the meters to deliver the benefits, making the overall cost uneconomic. So the cycle is repeated until a set of make-believe benefits can finally be submitted to gullible Ministers as firm returns for the programme. Alex Henney – an industry veteran who has charted deregulation and the rise and demise of competition within it, summed up the case as, “civil servants have cooked the numbers to come up with a net benefit”. Many agree with him. Taken together it’s repeating the classic failure cycle of a changing specification leading to conflict and more change, while driving costs out of control and causing deadlines to slip. In 2012, a Cabinet Office review gave the project a red light and recommended it should be abandoned. DECC drove through the light and carried on.
There is an obsession to make "smart” meters do things which are far better done over other channels, such as demand response and consumer engagement. But because the industry is so technically backward, it’s picked an architecture that is several decades out of date and which cannot deliver the information in the way which customers want. Today consumers have smartphones. They want the same sort of smart experience from their utility. Instead they’re going to get a retro ‘70’s technology experience, whilst paying twenty-first century prices for it. It’s a back to front world, where utilities are leading the Government down a path that it and consumers will regret.
It is becoming more urgent as consumers scream about the current cost of energy bills and trust in utilities is at an all-time low. The current plan will not deliver short term savings; instead it will see energy bills rise still higher. That’s a toxic legacy for any Government. The party in power when the smart metering bubble bursts will probably find itself unelectable. There is still time to address this, but the current blinkered approach from all concerned is fast driving us past the point of no return.
I’ll be posting the full, sad history of how we got here over the next few weeks. If you can’t wait to see what’s gone wrong, you can download the full report at http://bit.ly/FCUKED.
** It is technically the GB deployment, as it doesn’t cover Northern Ireland. That in itself is a strange decision, as it leaves Northern Ireland as a no-man’s land between the GB mainland standard and the incompatible IP based approach of Southern Ireland. FCUKED seemed a particularly appropriate acronym for the GB deployment.