My Lords, we published our response to the electricity and gas smart metering consultation today. This sets out the Government’s decision that, in regard to homes, real-time displays should be provided with smart meters.
How can I do anything but congratulate the Government on their excellent decision? It is a very important way in which individuals can take control of their energy usage and supply. How will the Government make sure that the cost of these meters, which will now be rolled out across the nation over the next 10 years, is not completely charged over that time to consumers, given the considerable saving that energy companies will make in the absence of reading meters and many other functions?
My Lords, I am grateful to the noble Lord for his welcome for the decision. The cost will fall to the energy companies. We would expect some of that then to follow through in prices to customers. We project that the net gain for customers will be about £28 per household from 2020. We wish to ensure that there is a competitive market with proper regulation so that customers are given a fair deal.
My Lords, the Government’s announcement is timed very well. The noble Lord, Lord Teverson, must be very pleased today that the Government read his Question a week ago and came up with the Answer for him just in time. However, it is disappointing. Again, here we go: hesitation, hesitation and another delay. Does the Minister agree that families sorely need control over their escalating fuel bills and sticking to the same old slow timetable for rollout by 2020 will leave the United Kingdom and consumers lagging behind again?
My Lords, we are not lagging behind. This is the first country to decide to have smart meters for all domestic households. The timing is entirely consistent with what we discussed when the Energy Act went through last year. The reason for doing it over this period is to do with cost. If we went for a quicker timetable, it would cost much more money, which would have an impact on consumers. It is a reflection that the party opposite just cannot do its economic sums.
We should hear from the Cross Benches.
My Lords, they are small screens, rather like a small laptop, which will show the energy use—gas and electricity—at the moment that you look at them. They will also give the price that you are paying and will give the consumer much more control over their energy. They will encourage consumers towards energy efficiency. Also, because of the technology, the process of switching tariffs will become much easier.
My Lords, the noble Lord, Lord Teverson, remarked that the new meters would be used by companies to read meters remotely. He also mentioned other purposes. Indeed, from reading the press lately, some of the other purposes would involve monitoring use and having the ability to switch off appliances. That would be an intolerable intrusion into people’s privacy in their homes. It would also be very dangerous.
My Lords, as regards the information that is made available to the energy companies, it is very important that there is a proper process in relation to data protection. There have to be protocols about what information should be made available and for what purpose. However, the fact is that two-way flows of information between consumers and energy companies will lead to the development of a smart grid. That is essential as we go forward. It will allow us to have an efficient energy system, but we will be very careful in regard to the point raised by the noble Lord.
My Lords, the Minister indicated that it would be for the energy suppliers to oversee the installation of the smart meters. Is he aware that the sector skills council which represents the energy industries has sought funding for the training of the many thousands of technicians who will be needed to install these meters, but that this has been refused on the ground that it does not lead to an NVQ? Will the noble Lord look into that because it seems very short-sighted?
My Lords, I was not aware of the issue; I am very happy to look into it. It certainly shows that there will be a huge scale of investment in smart meters in the next few years, which will lead to the creation of many jobs. We want to make sure that those operatives have the necessary skills. But I am very happy to look into that matter.
My Lords, the Minister noted that the energy companies will be supplying the meters to their customers. Is that not a very inefficient method considering that many companies will be dealing with perhaps one house in each street? Would it not be much better to do it on a street-by-street or regional basis? Is this not a failure on the part of Ofgem?
My Lords, I am always happy to pass on criticism to Ofgem where it is fair, but it is not fair to blame Ofgem in this case. This is a right decision. The companies have a relationship with customers at the moment. Every year, half a million meters are taken out and new ones are installed in new-build, so the companies have great experience and a relationship with the consumer. Of course, there is an argument for doing it on an area-by-area basis, but energy companies do that at the moment, so we think that our approach is the best one.