As calls for curbs on global oil and gas production intensified at the COP 28 environmental summit further evidence emerged last week of the failure of a key initiative to address the demand side of the equation, which has provided a boon for financiers.

The drive to have all households and small firms fitted with smart meters has been a centre piece of the energy efficiency effort for more than a decade. Cheesy adverts featuring an Einstein caricature are being used to help underline the devices’ value.

Smart meters are meant to help households achieve big savings by using the real-time information they provide on usage to curb wasteful use of power-hungry systems and gadgets.

However, the latest official figures on the uptake of smart meters, which were released last week, suggest that millions of householders remain unconvinced of their benefits.

The Smart Meters in Britain quarterly update shows that only around 60% of the 56 million meters used by households and small businesses at 30 September were smart or advanced.

That leaves the take-up rate woefully short of the target set in 2011 for all households and small businesses to have meters fitted by the end of 2019.

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The report may overstate the number of smart meters in use. Some of those fitted are actually operating in traditional mode. The number concerned was not included in the report due to a "data quality" issue.

The drive to increase take up appears to be flagging despite Einstein’s efforts.

The number of meters installed in the third quarter, 854,500, was down 6% on the same time last year. The number of installations was up 2% on Q2 but that may only have been because 64 days were worked in the latest period compared with 60 in the one before.

The slowdown suggests cost of living pressures have not persuaded many householders that they need to add a smart meter to their armoury.

This despite National Grid’s efforts to encourage take-up by offering cuts in charges for households with smart meters under its Demand Flexibility Service last year. The initiative was renewed in November.

National Grid said: “Last winter, 31 providers and 1.6million households and businesses participated in the Demand Flexibility Service successfully saving over 3,300MWh across 22 events, enough to power nearly 10 million homes. This year, we're committed to developing the service even further.”

It should be remembered that the costs of smart meters are added to the standing charges paid by households and small firms. That means those who don’t have smart meters are subsidising those that do.

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The latest usage figures came a month after MPs published a withering report on smart meters.

 The Public Accounts Committee said the Government had failed to make the case for them to the public well enough as it complained the deadlines for completion had been repeatedly shifted.

The PAC found energy suppliers that are under pressure from Government-imposed smart meter targets are putting the squeeze on consumers. These can feel threatened by contacts and correspondence from suppliers into having one installed.

It added: “The report finds that consumers who are older, male, on high incomes, or homeowners are more likely to have smart meters, raising concerns that certain, often wealthier, consumers are disproportionately benefitted by smart meters.”

The report also raised serious questions about the value of many of the smart meters that have been fitted.

It noted: “As well as the fact that around 3 million (9%) of smart meters were not working properly at March 2023, the report highlights concerns about built-in obsolescence in those smart meters already installed.”

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The complaints may sound familiar after years in which there have been many press reports about the failings of the smart meter scheme.

Given that, the Government led by Rishi Sunak needs to explain why the problem persists and what it plans to do.

A powerful argument for smart meters that may get lost in the noise about take-up rates is that the data they provide could play a big part in helping energy firms to match power generation to demand. This could help maximise the potential of renewables such as wind which are intermittent.

The record suggests the sanctions on energy firms for missing targets appear to be weak.

In November the regulator Ofgem noted that ScottishPower had made a voluntary payment of £440,000 after failing to meet the target for 2019.

The payment represents a drop in the ocean at a time when energy firms are making huge profits.

ScottishPower UK doubled operating profits in the first half of this year to £1.1 billion from £0.5bn.

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The suppliers energy firms have relied on to provide the meters they do fit are enjoying a bonanza that has lasted for years.

In September Glasgow-based SMS (Smart Metering Systems) posted £36m first half profit, up 24% from £29m in preceding year, and announced a 10% dividend increase.

As one of the leading players in the meter supply business, SMS commands a £870m stock market capitalisation.

In 2020 it sold a portfolio of meters to Equitix for £291m in deal that underlined private equity firms’ enthusiasm for the smart meter business.

In the results announcement, SMS chief executive Tim Mortlock noted the company benefits from working under long-term contracts with prices linked to inflation.

He said: "Our index-linked revenues provide a natural hedge against increased interest rates in the short term whilst significantly benefitting long-term cash flows.”

Livingston-based smart meter firm Energy Assets has changed hands twice since it was bought by Australian investment bank Macquarie in 2009.

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SMS and Energy Assets plan to use the cash generated by their profitable smart meter operations to fund investment in other areas of the emerging energy economy, such as the large-scale batteries that will be required to store renewables output at times of low demand.

That raises the prospect of the bills of householders being swollen to cover the charges that will be imposed by infrastructure owners to meet their profit targets.

If smart meters and the like really are that important there must be a case that they should be made compulsory and that the costs concerned should be funded through the tax system.