ORSIS urges Government to smarten up on metering as MPs criticise metering plans

17th January 2012

logos-TK-news-orsis-v117th January 2012
ORSIS urges Government to smarten up on metering as MPs criticise metering plans

Leading independent smart metering provider, Orsis UK, has urged the Government to rethink its proposals for a national domestic roll-out of smart meters, after the Public Accounts Committee criticised the Government’s current proposals in a Report out today. Drawing on its experience in the UK and international metering sector, Orsis believes that the benefits of smart metering can be achieved by adopting a far simpler and cheaper approach than the Government’s current programme. By doing so, UK customers have the potential to save millions of pounds on their energy bills.

Whilst supporting the policy of a national domestic roll-out, the cross-party group of backbench MPs, chaired by Rt Hon Margaret Hodge MP, questioned the merits of the Government’s current smart meter plans:

the timescale of the roll-out (reduced from 10 years to 5 years and to be completed by 2019); is that feasible?

the lack of transparency from Government on the costs and benefits for consumers,especially the fuel poor; and

that most of the positive impacts of the current proposals are heavily stacked in favour of the Big 6 suppliers.

In welcoming the Committee’s report, which supports much of what Orsis said in evidence to the inquiry, Hans Kristiansen, Chief Executive of Orsis UK, said:

‘Make smart meters simpler – that’s what we have been saying to the Government for over a year. Current proposals will not meet the Government’s well intentioned objectives and the benefits of the scheme are not weighted in favour of the consumer as they should be. For example, whilst smart metering will save the Big 6 millions – the consumer will only see a benefit of £23 a year on current estimates and that’s only after they have paid nearly £350 in their energy bills to pay for it.

There is a simpler, more cost effective and consumer friendly approach to smart metering that we advocate and which is available now. We urge the Government to accept the Report’s recommendations as well as look at simpler, smarter alternatives to ensure the biggest roll-out of smart metering anywhere in the world is a blueprint for the rest to follow, rather than risking it become an expensive white elephant in which we all have to pick up the tab.

Smart metering can and should benefit both suppliers and consumers, allowing us all to have more control of the energy we use in our homes and help us to make better use of it. For this to become reality the Government must be humble and rethink its proposals.’

For further information/interview requests

Orsis UK
Mike Harrison/Paul Taylor (Taylor Keogh. Communications)
Tel: 020 3170 8465
Email: mike@taylorkeogh.com
Notes to editors:
1. ORSIS UK is a smart metering provider with installations in over 10,000 premises in the UK including 10 Downing Street, Highgrove and the British Museum. Its parent company, Revenco enterprises, has much experience in the area of mass data-processing, including the installing of over 3 million smart meters in China. Orsis submitted evidence to the Public Accounts Committee inquiry as well as meeting with its Chair, the Rt Hon Margaret Hodge MP and its report can be found:

http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accountscommittee/news/smart-meters-report/
2. The Public Accounts Committee’s inquiry was prompted by the National Audit Office’s report ‘Preparations for the roll-out of smart meters” published last summer, which raised similar concerns to Orsis UK and has been shared by the Committee in its conclusions in its Report.

3. In its evidence to the Committee, Orsis said that its over-arching concern is that the current plans for smart metering rollout are unlikely to deliver the Government’s requirements including aspirations of a reduction in energy consumption, more efficient use of energy and to reduce bills for the consumer. Orsis said that a simpler, back-office type approach as adopted to great effect by the mobile phone industry, would deliver maximum benefit at a much reduced cost and one which is available now.

4. In particular it cited four main areas of concern with the current roll-out proposals:

Cost:
The most up to date estimate of cost per consumer is £350 – this is likely to rise rather than fall as the full cost of technology and systems are known. The most recent assessment of benefits is that by 2020 the consumer will save £23 per year. A simpler solution will cost a fraction of this, and has not been considered.

Timescale:
As the NAO report states, there is little contingency in the proposals for delays to any of the key deadlines within the prospectus. The current installation workforce will only achieve 20% of this target – therefore there is an urgent need for a skilled workforce to be developed before 2014 that are capable of safe installation of gas and electricity meters, and explaining the workings of the meters and the IHD – all for a price of £58 per household (for dual fuel – £29 electricity and £39 gas). This factor alone could delay the programme and have a detrimental effect on the achievement of the Governments targets for energy savings. In this respect we feel that the NAO report does not investigate this matter in sufficient detail, and suggest that further work is required to assess the risk and cost of failure to deliver within the 5 year period.

In-Home-Display (IHD):
ORSIS agrees with the NAO report that there is little evidence to support the assumption that customers will make significant and lasting changes to their energy consumption as a result of the installation of smart metering. The “gadget” effect of the IHD may not have a lasting effect, Suppliers will only support it for one year, and there is evidence that suggests once the novelty has worn off, consumers lose interest, and the device ends up in a drawer.
We believe that the IHD should be one of a range of solutions offered to consumers, and that it should be an opt-in rather than an opt-out solution. The fuel poor will not necessarily benefit from the level of information provided by an IHD – but rather from timely and user-friendly advice from their Supplier on the most effective tariff for their needs. The current estimate of cost of the IHD is £15, which we feel is hugely understated, the fuel poor are already struggling, this is an additional financial burden. We do not feel that the current proposals have considered the impact – financial and in terms of successful rollout.

Impact Assessment:
ORSIS has concerns that the Impact Assessment is now hugely inaccurate – and as the NAO report states, it is essential that DECC continue to update the cost benefit analysis to ensure that the most accurate information is used. However, ORSIS believes that there are many costs that have not been included in the assessment, and feels that the benefits have been significantly overstated given the delays already experienced, and the likelihood that full rollout will not be complete by 2019.

For a PDF of this press release, click here.

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