Personal Finance

British Gas boss hints of 'mandatory' smart meters to control energy supply

British Gas has raised the question of mandatory smart meters to help the UK meet net zero targets.

Chris O'Shea, chief executive of Centrica which owns British Gas, admitted only 56 percent of its customers have a smart meter, 13 years after they were first introduced.

Smart meters help energy customers keep track of their usage and costs in real time and sends meter readings to suppliers automatically. It means more accurate gas and electricity bills and better understanding of consumption helping to lower spending.

The Government also wants smart meters installed to manage household energy use to ensure demand does not overtake supply, especially due to increasing reliance on renewable energy.

Smart meters will be used to charge more during peak times, or less when there is excess clean energy available, to encourage people to switch consumption to times when there is more renewable energy, such as from solar panels.

Peak usage schemes have already been offered successfully over the last few years when energy suppliers gave customers rewards or money off bills for reducing usage as part of the Demand Flexibility Service.

However, despite smart meters being in operation since 2011, millions have still not agreed to have one installed.

Across the UK 61 percent of all meters are smart, with the Government wanting this to rise to 74.5 percent of homes and 69 percent of small businesses by the end of 2025.

Mr O'Shea said: "We think that in order to have the proper smart grid required to keep costs low in the future everybody should have a smart meter. One of the things we should consider is whether this is a voluntary programme or whether this is a mandatory programme."

Speaking to the Government's Energy and Net Zero Committee last week, Mr O'Shea called for a "street by street rather than customer to customer" installation.

More than one in three British Gas customers have ignored offers to install a smart meter, Mr O'Shea said, adding: “I have customers that write to me saying, 'Please stop bothering me. I don't want a smart meter.'

“We found 44 percent of our customers don't have them, of whom 600,000, or about 8 percent, have said they don't want one.

“So for 36 percent of customers we are not sure whether they will take one or not.”

Last November Ofgem fined British Gas, along with OVO, Bulb, E.ON, Scottish Power and SSE, a total of £10.8 million after failing to hit smart meter installation targets in 2022.

Together there was a shortfall of more than 1 million meters.

Yearly targets are in place until the end of 2025.

Social tariffs

Mr O'Shea also called for a social tariff to be offered to low-income families.

It would see the energy industry and Government subsidise bills and scrap the mandatory daily standing charges for those most in need.

He said: "What's in consumers' interests is something that is understandable and very straightforward... The easiest thing is abolishing standing charges and have no zonal pricing. And then have a progressive social tariff. Why do people have to play a postcode lottery?"

The End Fuel Poverty Coalition told MPs one in five people struggling with their energy bills were turning to illegal lenders.

Simon Francis, co-ordinator of the coalition, told MPs: "The findings are horrific and worse than experts had feared.

"Energy debt is forcing households to wake up in the morning scared of the consequences of using electricity or gas.

"Energy bills and energy debt are a fundamental part of our broken energy system which has led to the cold damp homes crisis we saw this winter.

"The long-term solutions are obviously wider than changes to standing charges and tariff reform. We need to see more insulation, ventilation, unblocked cheaper renewables and weaning ourselves off oil and gas to improve energy security."

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Helen Barnett

Helen is a journalist, editor and copywriter with 15 years' experience writing across print and digital publications. She previously edited the Daily Express website and has won awards as a reporter. Read more here.


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