Six of Britain’s biggest gas and electricity suppliers will pay out GBP10.8 million to the energy watchdog Ofgem after failing to meet the first annual target under a government push to install smart meters across the UK.
The suppliers are British Gas, Ovo, Bulb, E.ON, Scottish Power and SSE, which missed the target for 2022 by more than a million smart meters.
Smart meters are seen as being an important part of reducing energy usage and switching to a more flexible energy system, as they allow households to track energy usage and access smarter tariffs.
The government set the industry annual minimum goals to roll out smart meters, which are part of the UK’s plan to achieve net zero by 2050.
The suppliers have agreed to pay the redress into Ofgem’s fund to help vulnerable households, with British Gas paying out the most, at GBP3.4 million, followed by Ovo at GBP2.4 million and Bulb, which was bought out of administration by Octopus in December 2022, at GBP1.8 million.
E.ON will pay GBP.17 million, Scottish Power GBP1.2 million and SSE GBP252,000.
Scottish Power will also make a further GBP440,000 payment into the redress fund in relation to missing its own smart meter goals in 2019, before the latest government targets were set.
Ofgem said as a result of the agreed payouts, it will not conduct a further probe into the reasons for the missed targets. As of June this year, Ofgem said more than 33 million smart meters have now been installed in British homes and small businesses, representing 58% of all meters across the UK.
Cathryn Scott, director of enforcement and emerging issues at Ofgem, said: "The installation of smart meters is a vital step in the modernisation of our energy system and the path to net zero by 2050. Smart meters give customers better information about their energy usage helping them budget and control their costs."
The fine comes as National Grid, the company that owns and operates the high-voltage electricity transmission and distribution networks in England and Wales, has announced a new policy to accelerate the connection of up to 20 gigawatts (GW) of clean energy projects to its grids.
The policy is part of National Grid’s connections reform initiative, which aims to unlock transmission capacity and enable more low carbon technologies to plug into the grids, helping the UK meet its net zero target by 2050.
The initiative is spearheaded by the Electricity System Operator (ESO), which is responsible for the contractual relationship with connecting projects, and actioned jointly with National Grid Electricity Transmission (ET), which designs and builds the transmission infrastructure needed in England and Wales.
The initiative also involves collaborative action between Britain’s transmission and distribution networks to manage their technical interface more effectively and unlock gigawatts of capacity.
The accelerated 20 GW equates to the capacity of six Hinkley Point C nuclear power stations and is expected to help the UK reduce its greenhouse gas emissions by 68% by 2030 and achieve net zero by 2050. The new approach to transmission storage connections is a flagship policy in the ESO’s five-point plan to speed up connections, which was launched in July 2023.
