Smart meters are anything but SMART
Unveiled: New £200 ‘smart’ meters every household must pay for (but may not work)
o Minister and Bob Geldof to launch £11bn scheme to make us all use ‘green’ meters… which other EU nations rejected
o Project will be launched this week despite fears they will not work and they pose a security risk to power supplies
- Energy companies will begin the mass installation of smart meters next year and expense will be passed on to customers
By David Rose and Martin Beckford
Published: 01:39, 6 July 2014 | Updated: 08:03, 6 July 2014
A Government plan to put ‘smart meters’ into every British home – costing households £200 each – will be launched this week despite fears they will not work and that they pose a security risk to power supplies.
The £11 billion project, introduced to meet EU green targets, is supposed to cut down energy consumption and reduce bills.
But official reports seen by The Mail on Sunday reveal that: trials show consumers with smart meters save far less energy than predicted; five countries considering such a plan have decided it would cost more money than it saves; the meters do not work in a third of British homes, including high-rise flats, basements and those in rural areas: hackers and cyber-terrorists could break into the system causing chaos in the national grid, or carry out large-scale fraud by fiddling bills.
Energy companies will begin the mass installation of smart meters next year at a cost of at least £200 per home, and have admitted the expense will be passed on to customers.
How it works: This diagram explains how the new smart meters will work, or more precisely, how they won’t
Sir Bob Geldof will launch an expensive publicity drive, featuring ‘out of control’ cartoon characters called Gaz and Leccy, on Tuesday. Last night he confirmed he was being paid for the campaign, but refused to reveal how much, saying it was ‘none of your f***ing business’. Sorry Sir Bob, but if it is paid by us it is our f***ing business you uncouth foul mouthed old Irish git! Look at the mess you are making of your own Country at the moment so sod off home and leave us alone. (He should understand that -Ed)
The cost of his appearance will also be added to bills.
Last night Margaret Hodge, chairman of the powerful Commons Public Accounts Committee, said: ‘This is a typical Government project – they set up a big scheme but don’t think about the costs to the consumer because it’s being driven by the energy companies. This expensive equipment is already out-of-date, because we could get the information on our smartphones.
‘The Government should really think about the technology they are using and make sure that the consumer benefits.’
The National Audit Office, the public spending watchdog, said in a report: ‘Significant risks remain, including potential consumer resistance to smart meters, technical issues, the readiness of suppliers, network operators and the supply chain for large-scale installation and the robustness of data security and privacy arrangements.’
Smart meters work by recording gas and electricity consumption every 30 minutes. Consumers are also given monitors called In-Home Displays, which let them see how much power they are using at any time and how much it is costing them.
Supporters say extra information will encourage people to use less energy, cutting their bills and helping the environment. They will also be able to see times when it is cheaper to run appliances, and will be allowed to switch energy supplier more quickly.
Energy firms benefit because they will no longer have to send meter-readers into homes, and will be able to disconnect customers more easily if they do not pay their bills.
Smart meters are being introduced under a 2009 EU proposal. The UK scheme was the brainchild of Labour leader Ed Miliband when he was Energy Secretary in the last government.
The plans for this country have been devised following years of discussions by Whitehall committees, endlessly updated calculations and advice costing £44 million from three consultancy firms.
Each home gas and electricity meter and energy monitor will ‘talk’ to another device called a Communications Hub, using a wireless communication method called ZigBee, which was designed not for mass consumers, but university labs.
ZigBee does not work in buildings with thick walls, or in multi-storey flats – that make up 30 per cent of homes.
Scientists are trying to develop a new, low-frequency version that will – but project insiders say it may take years to iron out its bugs.
Once it has the information from the meters, the hub will send it by mobile phone-type signals to gigantic computer switching centres, which will then pass the data on to the relevant gas and electric supply firm.
THREE MAJOR HEADACHES FOR ‘GAZ AND LECCY’ REVOLUTION
1. THEY WON’T ACTUALLY SAVE YOU MONEY
Doubts remain about whether the ambitious scheme will really save consumers money.
The Department of Energy and Climate Change (DECC) believes the technology will enable customers to learn more about how much power they use and so work out how to cut their bills.
It estimates bills will fall by £26 a year by 2020 and £43 a decade later as consumers cut their electricity usage by 2.8 per cent and gas by two per cent.
But an early study of 743 Dutch households with the meters found they only used 0.9 per cent less gas and 0.6 per cent less electricity than those with old meters.
The European Commission itself has pointed out that of the 19 EU countries that have carried out an analysis of the likely costs and benefits, five have concluded that electric smart meters will lose money and three are not introducing the scheme. For gas smart meters, 12 of the 19 countries ended up with ‘negative’ results.
Here, the National Audit Office pointed out that households would have to keep their energy use down year after year for costs to materialise. Yet ‘the evidence on longer-term behaviour change’ is ‘limited’.
Experts say if smart metering is to save families money, they must change their behaviour by using less power or by running appliances at different times of day. Merely having a smart meter only saves the energy firms money, as they no longer have to send people out to do readings.
Overall DECC says the project will cost £10.9 billion but create benefits worth £17.1 billion for consumers and suppliers.
However the NAO has stated that the economic benefits ‘are subject to a wide range of uncertainty’, and pointed out that the hoped-for savings have been reduced by £2.1 billion recently thanks to better calculations.
In addition, it is by no means guaranteed that all consumers will end up with smart meters in their homes, let alone use them.
One supplier told the NAO that ‘up to 20 per cent of customers will refuse to have smart meters installed’ and two firms fear added costs from dealing with ‘reluctant customers’.
If fewer people sign up, energy usage will not fall and so the predicted savings will not arrive.
2. TECHNOLOGY HASN’T BEEN TESTED YET
The proposed smart meters will not work in a third of British homes, according to the National Audit Office spending watchdog.
The meters need to communicate through a form of wireless communication.
Yet the UK has chosen a little-known ten-year-old system called ZigBee rather than the better-known wi-fi or Bluetooth.
ZigBee does not work in high-rise blocks, because the meters tend to be located in basements too far from people’s flats, and will also struggle in buildings with thick walls.
Critics say Britain has developed by far the most complicated form of smart metering in the world, greatly increasing the costs and risks.
Elsewhere in Europe, the energy networks are responsible, allowing them to send meter readings directly through power lines. In Italy a simpler system has cost just £1.5 billion.
In Britain the retailers are running the scheme and in addition to the actual meters, ministers have insisted that every home be given another box – known as an In-Home Display – that lets users see what they are currently spending on power.
Paul Nickson, British Gas commercial director for smart metering, admitted: ‘There is not a technical solution for high-rise buildings.’ Trials may lead to smart meters in flats being connected by cables.
The NAO said: ‘Suppliers are still developing a home area network radio system for up to 30 per cent of premises.’
A wireless network that works for all but five per cent of homes will not be finished until at least 2016.
The meter readings are sent from homes to the energy companies by mobile phone signal, but this means the system will not work in some rural areas.
The Government’s latest Impact Assessment admitted the wireless coverage may be ‘difficult to achieve’ in remote or mountainous districts.
In addition, not all of the energy firms have developed ‘viable’ systems that work for customers who pay for their energy in advance, the NAO said.
3. THEY ARE VULNERABLE TO HACKERS
The Government insists smart meters will be safe from hackers and cyber-terrorists.
But a risk assessment carried out by the energy watchdog, Ofgem, identified ‘a range of threats such as cyber, viruses and malicious software. The potential impacts… range from fraudulent transactions for financial gain… to compromise of critical operations such as remote disablement.’
This means that criminals could break into the system and try switch off the supply to millions of homes at once, leaving the national grid crippled.
The dangers were considered so great that in 2012 the Government spy agency GCHQ and its cyber protection offshoot, the Communications-Electronics Security Group, dramatically intervened, delaying the entire project.
Experts from the CESG and the body that protects major assets, the Centre for the Protection of National Infrastructure, joined a top-level body called the Security Technical Experts Group that has held monthly meetings to assess the risks.
The final guide to how these security controls will work is still months from completion.
One project insider said the security systems should have been planned from the start, but instead, were a ‘desperately late add-on’.
He warned: ‘You just shouldn’t do things this way round. The security spec is a sticking plaster. The risk is that as soon as holes are plugged, others will open up.’
Idan Edry, a former military intelligence officer who is now a senior executive at the Israeli firm Nation E, a world leader in energy cyber security, said he has studied the UK system carefully, ‘and I can tell you, it has nothing like enough protection’.
It would leave customers exposed to being hacked: thieves could steal millions from pre-paid energy accounts. More seriously, it created millions of portals into the energy supply system for cyber terrorists, who could use them to cripple large parts of the network.
Last month the National Audit Office said the security challenges ‘should not be underestimated’.
Another difficulty may occur at this stage in rural areas where the phone signal is patchy.
Energy computer specialist Nick Hunn, who has advised the Government, said combining so many new and untried technologies at once was ‘risky and unprecedented’.
He added: ‘Systems like wi-fi, Bluetooth and 3G took ten years to have their problems fixed and become stable. The Department of Energy and Climate Change expects it to work perfectly on day one. It’s a recipe for disaster.’
The DECC says smart metering will cost £11 billion, to be passed on from energy firms to consumers. At least £3 a year is already being added to bills to cover the suppliers’ cost of buying the meters.
A recent European Commission report states ‘a smart metering system could cost on average £158 to £198 per customer’.
The Government’s latest Impact Assessment puts the cost of installing dual fuel meters at £214.80, which will be added to bills.
It claims this will be offset by massive savings. In all, the ‘benefits’ of the meters will amount to £17 billion – a net £6 billion saving.
Overall, DECC says, electricity use will fall by 2.8 per cent, and gas by 2 per cent. However, customers will not be forced to have smart meters and if many people refuse the meters, the hoped-for savings in money and carbon emissions will be lost.
Gordon Hughes, Professor of Economics at Edinburgh University and one of the country’s leading energy experts, said last night: ‘I’ve been asking, where is the evidence that people will make major changes to their way of living?
‘It’s just not there. We’re about to add to people’s bills for the sake of benefits that will not justify the cost.’
Alex Henney, a former director of London Electricity and a global electricity consultant, likened smart meters to the computerized NHS records fiasco, which wasted £12 billion, saying: ‘The smart meter rollout bears all the hallmarks of the next great government IT crash.’
Parliamentary Under Secretary of State for Energy and Climate Change, Baroness Verma, said last night: ‘Smart meters will give consumers control over their energy use and help them reduce their bills.’
What Baroness Verma knows about Smart Meters could probably be written on the back of a postage stamp and quite why she was promoted to the Lords is a bit of a mystery. Except she was a woman, Asian, ambitious and a conservative. She has obviously been listening to the lobbyists at the DECC and is a safe pair of hands to do her masters bidding!