Smart-meter figures "don't add up"

 

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By Barry Collins

Posted on 18 May 2009 at 08:46

The Government has been warned that the cost of installing smart meters nationwide will be at least £6 billion more than it estimated.

Last week the Government approved plans to install smart meters in 47 million homes, at an estimated cost of between £7 billion and £9 billion (or £269 to £346 per household).

However, audit firm Ernst & Young has told The Times that the Government is woefully underestimating the cost of the scheme.

"Very big and complex projects of this sort always cost more than anticipated," claims Ernst & Young's power and utilities partner, Tony Ward, who estimates it will cost £13.4 billion (£515 per household) to install the smart meters in 47 million homes. "We very rarely see one [big project] that comes in at the original estimate."

Any increased costs are likely to be picked up by consumers, in the form of more expensive electricity bills, although the utility companies claim they will pass on efficiency savings to consumers.

The new meters will allow consumers to see exactly how much they're spending on electricity, with readings automatically fed back to the utility firms.

The Government says it remains confident in its smart-meter calculations. "They were arrived at after work with industry experts and external economists and clearly show the benefits of smart meters more than outweigh the costs," a spokesman for the Department of Energy and Climate Change told The Times.