Source · Select Committees · Public Accounts Committee
Recommendation 16
16
Accepted
Smart meters are essential for driving energy market innovation and consumer net zero engagement.
Conclusion
The Department and Ofgem are also in the process of introducing reforms to the energy retail market, in part to increase resilience and enable innovation. This reform comes at a time when new and innovative technologies are being developed, including those that contribute to or encourage consumer behaviour change in line with net zero.52 The Department highlighted that some innovative energy suppliers were able to offer tariffs, to consumers with smart meters, that could save up to two-thirds of the costs of charging their electric vehicles if they do so at certain times of day when the energy price is cheaper.53 Ofgem also told us about how, in winter 2022–23, the National Grid ran a demand response exercise with some smart meter consumers, by paying them to turn down their demand temporarily. In future this could be used to help manage demand at peak times.54 The Climate Change Committee analyst told us that smart meters broadly sit on the critical path to net zero and while delays in the rollout do not directly slow things down, the slower than expected progress ‘definitely does not make things easier’. It sees 44 Q 110 45 Q 76 46 C&AG’s Report, para 1.15, Figure 9 47 Q 17 48 Q 99 49 Q 69 50 Q 73; C&AG’s Report, para 1.17 51 Qq 3, 99 52 Q 112; C&AG’s Report, para 2.14; Ofgem, Ofgem launches new proposals to strengthen energy market and protect consumers, 25 November 2022 53 Qq 112–113 54 Q 97 14 Update on the rollout of smart meters smart meters as important in bringing consumers along—paving the way to educating consumers about their energy use, how energy is wasted and changes that are coming, including low carbon heating.55 55 Q 19 Update on the rollout of smart meters 15 2 Replacing non-functioning smart meters, and the future of the Programme Replacing non-functioning smart meters
Government Response Summary
The government acknowledges the committee's observation on market reforms and innovative smart meter technologies, outlining Smart Energy GB's statutory objectives and ongoing campaign strategy to build consumer demand and encourage behaviour change, alongside expectations for energy suppliers to develop innovative incentives.
Government Response
Accepted
HM Government
Accepted
1.1 The government agrees with the Committee’s recommendation. Recommendation implemented 1.2 The Department for Energy Security and Net Zero (DESNZ or the department) has set Smart Energy GB clear statutory objectives to build consumer demand and acceptance for smart metering and encourage behaviour change. As an Observer to Smart Energy GB’s board, the department works closely with Smart Energy GB, who continuously evolve their campaign strategy in response to findings from their extensive consumer research (as well as the evolving context of the energy market) so that messaging is tailored to different consumer segmentations. Smart Energy GB work collaboratively with energy suppliers and other stakeholders to help consumers understand the benefits of smart meters and have a specific focus on supporting consumers in vulnerable circumstances. 1.3 Smart Energy GB operate a test and learn approach, so campaigns continually improve. Their campaigns are multi-channel and use a bespoke segmentation model, alongside sophisticated market insights, to target impactful messaging in a cost-effective way. Industry-verified statistical analysis shows that more than 50% of smart meter installations are attributable to Smart Energy GB’s activities. This evidence provides assurance that the existing arrangements to evolving and delivering Smart Energy GB’s public engagement strategy continue to effectively drive demand for smart meters. 1.4 Alongside national and local campaigning from Smart Energy GB, the department expects energy suppliers to invest in and continually evolve their approaches to converting consumer demand into successful installations. Important to this will be their development of innovative incentives to encourage take-up, including by creating attractive new smart-meter-enabled products and services.