Source · National Audit Office

Update on the rollout of smart meters

The government has made progress with the rollout of smart meters – but it’s slower than planned and there are challenges in meeting its latest set of targets.

Published: 14 Jun 2023 Recommendations: 7 Type: Value for Money NAO confirmed: 7 Department: Department for Energy Security and Net Zero
Dept: Department for Energy Security and Net Zero Topics: Energy and environmentHousehold energy nao.org.uk →

Recommendations

7 items
7 accepted 6 implemented 1 in progress

Recommendation 1

Addressee: Department for Energy Security and Net Zero · Source location: Page 16, paragraph 26, point a)

DESNZ should:
a) build on the existing programme of monitoring, collecting more information on actual and forecast costs and benefits to:
? inform decisions on how to maximise value for money over the remainder of the rollout; and
? report Programme costs and benefits annually to Parliament

Response position: Accepted

Delivery: Implemented · Q3 2024-25 · Confirmed by NAO

Recommendation 2

Addressee: Department for Energy Security and Net Zero · Source location: Page 16, paragraph 26, point b)

b) by the end of 2023, determine whether more programme-wide evaluation would help to inform decisions on the remainder of the Programme. This could include further assessment of how to maximise the benefits of the smart meter network for consumers, suppliers and the wider system;

Response position: Accepted

Delivery: Implemented · Implemented Q3 2023-24 · Confirmed by NAO

Recommendation 3

Addressee: Department for Energy Security and Net Zero · Source location: Page 16, paragraph 26, point c)

c) develop plans for the Programme to transition to Ofgem and Smart Energy Code governance and implement these plans when key criteria are met. DESNZ should decide whether the transition criteria should include a threshold of smart meter installations at which the government considers the rollout to be complete and can demonstrate value for money will be maximised;

Response position: Accepted

Delivery: Implemented · Q3 2024-25 · Confirmed by NAO

Recommendation 4

Addressee: Ofgem · Source location: Page 16, paragraph 26, point f)

Ofgem should:
f) allocate sufficient time, capacity and capability to the process of renewing the central platform service licence from 2025, to ensure the central platform service is reliable and provides stability for its core service as well as enabling future beneficial services.

Response position: Accepted

Delivery: Implemented · Q3 2024-25 · Confirmed by NAO

Recommendation 5

Addressee: Department for Energy Security and Net Zero · Source location: Page 16, paragraph 26, point d)

d) continue to work collaboratively with suppliers to address the reasons why installation rates have been slower than planned. This should take into account differences between suppliers as well as insights from DESNZ?s benchmarking work, and should consider whether to introduce additional measures to encourage or require consumers to take up smart meters; and

Response position: Accepted

Delivery: Implemented · Q2 2024-25 · Confirmed by NAO

Recommendation 6

Addressee: Department for Energy Security and Net Zero; Ofgem · Source location: Page 16, paragraph 28, point g)

DESNZ and Ofgem should:
g) work constructively with suppliers on upcoming challenges in the rollout, including how to manage some consumers? continued use of traditional meters, and the replacement of communications hubs, ahead of the 2G and 3G switch-off. This work may include introducing regulatory measures and should consider how hub replacements will be financed.

Response position: Accepted

Delivery: In progress · Q3 2026-27 · Confirmed by NAO

Recommendation 7

Addressee: Department for Energy Security and Net Zero · Source location: Page 16, paragraph 26, point e)

e) continue to draw lessons from the smart meter rollout to inform the development of other policies that rely on consumer engagement and behaviour changes, particularly the decarbonisation of home heating.

Response position: Accepted

Delivery: Implemented · Implemented · Confirmed by NAO

Public Accounts Committee follow-up

1 report

The Public Accounts Committee examined this NAO report and published its own recommendations. The government responds to PAC recommendations via Treasury Minutes.