UK’s £12 billion ‘Smart’ Meter programme is FCUKED

The UK’s smart metering is set to be the country’s next Government IT disaster, writes Nick Hunn – saddling consumers with a £12 billion cost on their fuel bills for little or no benefit.

Having delayed the Fiendishly Complicated United Kingdom Enduring Deployment (FCUKED) of smart meters earlier this year because of technical delays, you might expect that the British Government would have spent some time reviewing the technology they had mandated.

If they had done so, it would have become clear that the program was out of control. Under the surface, too many cooks have ratcheted up the technical complexity to the point where it is no longer fit for purpose. However, it appears that no-one wants to point out that the Smart Metering Emperor is stark naked.

The next big IT disaster

That’s largely because those overseeing the programme don’t have the depth of technical knowledge to understand the implications of what is going on. And as always with big Government driven IT programs, whilst there’s money to be made by the metering industry and consultants, momentum rules.

It seems perfectly justifiable to carry on and saddle consumers with a £12 billion white elephant which will further inflate domestic energy bills. As a result of this lack of due diligence, smart metering is firmly on course to be the next big UK Government IT disaster.

It’s not that there’s a fundamental problem with smart metering, but there are massive mistakes in the way that the UK has decided to do it.

When the programme started, it was seen as world-leading. It should have set a global standard for smart metering, giving UK plc a commanding lead in exporting expertise to the rest of the world and creating long term employment opportunities.

Obsolete before it even started

Instead it has resulted in an out-dated, over-complicated system which will be incompatible with any other solution in the world, cost more than any other, fail to deliver the promised customer benefits, add risk to our energy security, threaten jobs, further alienate customers and make the UK energy industry a laughing stock.

If we look at the issues, the GB smart metering program appears to have a unique capacity not just to duplicate major errors from previous Government disasters, but to combine many of them into one overarching Government-destroying fiasco.

There is a parallel with other UK Government led IT disasters, where a focus on the overall benefit obscured the failures of the underlying technology strategy.

The NHS spine is a good example. Nobody denies the benefit it could have delivered had it worked. Smart Metering appears to be a close cousin, where there is a major disconnect between the strategy and the implementation.

As with the NHS Spine, those at the top failed to comprehend that the underlying technical detail was out of control. In both cases, the specifications lost sight of the benefits and users of the system. Government departments, working way beyond the limit of their technical knowledge allowed vendors to introduce arbitrary new features.

The pattern is all too familiar

The same pattern is apparent with smart metering. Unsupervised specification creep allowed has allowed utilities and vendors to play a game of technical one-upmanship reminiscent of schoolboys competing to see how high they can pee up a wall.

In a further twist, nobody appears to be asserting long term ownership and control of the GB metering specification, allowing it even more scope for constant change, largely defeating its purpose of defining an interoperable standard.

As with the NHS, many within the industry are only paying lip service to the programme. Most utilities don’t want smart metering. In fact they seem to have used the wrong dictionary. It is difficult to find anything smart about the UK deployment, until you realise that the utilities use smart in the sense of “it hurts”.

They consider they have a perfectly adequate business model which has no need for new technology. In many Government meetings, their reluctant support seems to be a veneer for the hope that it will all end in disaster, letting them go back to the world they know, of inflated bills and demands for money with menaces.

They will be used to persecute the consumer

That brings back another parallel with the medical profession’s quiet but relentless opposition to the Summary Care Records scheme which eventually brought it to an ignominious end.

Even when smart meters are deployed, there is no evidence that any utility will use the resulting data to transform their business, rather than persecute the consumer.

At a recent US conference a senior executive for a US utility which had deployed smart meters, stated that their main benefit was “to give them more evidence to blame the customer”. That’s a good description of the attitude displayed by our utilities.

‘Make-believe’ benefits

The other challenge is the eternal one of calculating the financial benefit. Whilst everyone expects Government projects to overrun and under-deliver, smart metering takes this to a level which makes the HS/2 assessments look like models of financial prudence.

Successive analyses have shown no net benefit, so DECC has made up illusory benefits in an attempt to justify the smart metering deployment. Each of these has needed more unproven technical complexity to be incorporated into the meters to deliver the benefits, making the overall cost uneconomic.

So the cycle is repeated until a set of make-believe benefits can finally be submitted to gullible Ministers as firm returns for the programme. Alex Henney – an industry veteran who has charted deregulation and the rise and demise of competition within it, summed up the case as, “civil servants have cooked the numbers to come up with a net benefit”.

Many agree with him. Taken together it’s repeating the classic failure cycle of a changing specification leading to conflict and more change, while driving costs out of control and causing deadlines to slip. In 2012, a Cabinet Office review gave the project a red light and recommended it should be abandoned. DECC drove through the light and carried on.

There is an obsession to make ‘smart’ meters do things which are far better done over other channels, such as demand response and consumer engagement.

Powered by obsolete technology

But because the industry is so technically backward, it’s picked an architecture that is several decades out of date and which cannot deliver the information in the way which customers want.

Today consumers have smartphones. They want the same sort of smart experience from their utility. Instead they’re going to get a retro ’70′s technology experience, whilst paying 21st century prices for it. It’s a back to front world, where utilities are leading the Government down a path that it and consumers will regret.

It is becoming more urgent as consumers scream about the current cost of energy bills and trust in utilities is at an all-time low. The current plan will not deliver short term savings; instead it will see energy bills rise still higher.

A toxic legacy in the making

That’s a toxic legacy for any Government. The party in power when the smart metering bubble bursts will probably find itself unelectable. There is still time to address this, but the current blinkered approach from all concerned is fast driving us past the point of no return.

The European Mandate

The reason we’re where we are derives from a gung-ho interpretation of a European ruling by the previous Labour Government when Ed Milliband was Secretary of State for Energy and Climate Change. His over-reaction was supported by Chris Huhne when he took over as Lib-Dem Minister in the Coalition and was further endorsed without any real scrutiny by the Conservative Charles Hendry. Hence all three parties carry an equal responsibility for its sorry state. What is commonly called the “European 20-20-20 Agreement” [4] was a symbolic piece of marketing spin, where EU leaders got together to promote a snazzy slogan with the mission statement of generating 20% of our energy from renewable sources by 2020, simultaneously reducing Europe’s CO2 emissions by 20%.

The target is largely marketing hype, designed to allow European leaders to look smug whilst other countries continue massive expansion of coal fired power stations [5], making Europe’s posturing effort insignificant. All it does for the European consumer is to make them bear the cost of renewable energy before it is mature, so that politicians can claim that they are helping to save the world. It is the factor behind the “green levies”, which are hurting UK energy consumers by giving uneconomic subsidies to anyone who’s prepared to stick their snout into the feed-in trough. In essence they’re a costly sticking plaster to cover up successive political delays in making any decisions about a proper long-term energy strategy. How Ministers are going to convince consumers to pay an additional smart metering levy on top of this from 2015 is a mystery. Particularly as for most consumers this increase will appear on their bills long before meters appear on their walls.

Despite what is often claimed by our politicians, there is no firm mandate for smart metering within the 20-20-20 directive. The directive only encourages the introduction of smart metering “where economically reasonable and cost effective” [4]. Back in 2007, the consultancy Mott MacDonald performed an appraisal of the costs and benefits of Smart Metering in the UK for BERR [6] and concluded that it has a net present value of minus £4 billion. That inconvenient piece of data was ignored. Germany has just come to a similar conclusion about the costs and walked away from a smart meter deployment [7]. The degree of technical creep in the GB specification means that the cost of the metering equipment within each home has almost doubled from what was anticipated in the Mott MacDonald report, from around £75 to £143. This has added an extra £2 billion to the deployment cost, making it difficult to see how the current GB deployment can have any hope of being cost effective. Moreover, the complexity of the architecture and technology, accompanied by an untried specification, means that it is very difficult to claim that the planned deployment is “cost effective”. It is high risk for the sake of high risk, with little attention to the benefits or an understanding of those risks. So it fails the EU Commission’s criteria for smart metering deployments on both counts.

Download the full, 20 page “Smart Metering is FCUKED” report to read the full story of what has gone wrong with the GB smart metering programme.

** It is technically the GB deployment, as it doesn’t cover Northern Ireland. That in itself is a strange decision, as it leaves Northern Ireland as a no-man’s land between the GB mainland standard and the incompatible IP based approach of Southern Ireland. FCUKED seemed a particularly appropriate acronym for the GB deployment.

 

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Nick Hunn is a self-proclaimed ‘wireless evangelist’ with many years engineering experience working in the field. His passion is technology and its application, particularly with respect to employing wireless to make products and services easier to use.

As readers of his Creative Connectivity blog already know, his key areas of interest are eHealth, especially in the development of consumer medical devices, Smart Energy, Machine to Machine (M2M) applications and Telematics development for Intelligent Transport Systems.

This article was originally published at www.nickhunn.com/smart-metering-is-fcuked/