Wednesday, 11 November 2020
Nithe i dtosach suíonna - Commencement Matters
National Smart Metering Programme
I thank the Minister of State for coming to the House.
Since 2019 and throughout 2020, ESB Networks has rolled out new electricity smart metering technology in homes across Ireland. If and when this roll-out is completed, domestic and business premises in Ireland will have a smart meter installed. Customers have been told that there is no additional charge for smart meters but that is not the case. The Commission for Regulation of Utilities, CRU, has already announced that household bills will increase by between €30 and €70 from 1 October 2020, partially to pay for this. Many countries, like Germany, chose not to deploy a mass roll out of smart meters because of costs. There are many cautionary tales where the roll-out costs have escalated very significantly from initial estimates like in the UK. All of this for a programme with no clear consumer or environmental benefits. Many countries have deployed smart meters ahead of Ireland and there is no case showing material positive improvements in energy use or other consumer benefits.
We know that under EU regulations Ireland is obliged to roll out smart meters as long as a positive business case for it can be made. The CRU commissioned a cost-benefit analysis, published in 2017, that found the project would cost €1.2 billion and have a €36 million negative net present value, which it deemed broadly neutral. The national smart meter programme, NSMP, has undergone little public scrutiny in contrast with other Government spending. I believe that if the savings that have been promised with this programme are clear and tangible then there should be no issue with having a full scrutiny of the costs, particularly at a time when the economic consequences of the pandemic are becoming clear, and the impact of Brexit looms for both Irish businesses and citizens.
The biggest assumed benefit underpinning the cost-benefit analysis is an assumption that customers will shift their consumption from peak times through the imposition of a time-of-use tariff. The ESRI's behavioural research unit conducted a study, in collaboration with the CRU, that found customers are reluctant to use the new time-of-use tariff. Does this now render the cost-benefit analysis assumption false?
Despite this evidence, the CRU continues to mandate that all electricity suppliers provide customers with at least one time-of-use tariff and must take "reasonable and effective steps to migrate all relevant residential and smaller business customers to an appropriate time-of-use tariff in a timely manner" ultimately removing customer choice in terms of flat-rate tariffs. As the spokesperson for enterprise and trade in this House, I am very concerned at this. Why are we insisting that small businesses must pay more for peak electricity usage during this pandemic?
I have a number of questions that I hope the Minister of State might be able to answer. What exact benefits are customers and businesses paying for? Why has an updated CRU cost-benefit analysis not been published? How can paying for smart meters that will push businesses to a higher tariff be justified during a crippling economic time? Why have so many other countries opted out of a smart meter roll out while Ireland has not, despite limited evidence of the benefit and the likelihood of escalated costs? Why are there no smart meter success stories internationally?
Is the Minister of State happy that the CRU has this month implemented a 11.6% increase in the regulated distribution charge payable by electricity customers, partially to pay for the smart meter programme at a time when there is no inflation and the country is reeling from the economic effects of Covid-19? Is she aware that the recent Electric Ireland price rise of €35 per home is an almost exact pass through of these increased regulated costs? Can she confirm that consumers are paying the price for smart meters? What is the position for businesses that are currently closed or partially open? They are not going to want, under any circumstances, to be charged for a smart meter that is of no use to their businesses at this time.
I thank Senator Ahearn for raising this issue and providing the opportunity to update the House on this important project. I extend apologies from the Minister for Environment, Climate and Communications, Deputy Eamon Ryan, who cannot be here in person as he is in the other Chamber.
The programme for Government commits to ensuring that the energy efficiency potential of smart meters starts to be deployed in 2021 and that all mechanical electrical meters are replaced by 2024. The smart meter upgrade is a meter replacement programme to modern smart-ready technology. New general electricity meters are being rolled out across Europe and internationally. When the programme completes in Ireland in 2024, all domestic and business premises will have a new, modern meter installed. The programme is being co-ordinated by the Commission for Regulation of Utilities, CRU, with ESB Networks, for the rolling out of the smart-ready electricity meters nationwide.
Since September 2019, when ESB Networks commenced the replacement of over 2 million electricity meters, over 180,000 meters have been installed to the end of October 2020. Owing to Covid restrictions progress in 2020 has been challenging. However, ESB Networks is to be congratulated for managing to safely comply with all national public health guidelines while managing to maintain a productive deployment programme.
Meter installation continues under the current level 5 restrictions, including indoor installations. ESB Networks has implemented additional Covid-related safety precautions such as additional personal protective equipment, PPE, full sanitisation at the meter location and minimal contact with customers. I can also confirm that all indoor exchanges are only taking place by appointment with the customer. We expect 500,000 meters to be installed in each of the next four years in order to reach our 2024 target.
The installation of smart meters is a key enabler for the energy transition to a decarbonised system, as outlined in the climate action plan. In addition, the move to upgrade to digital meters will bring many benefits for energy customers by enhancing competition, making bills more accurate, providing customers with better information on their consumption and empowering them with new tools to make more informed choices about their energy needs. The better information provided by smart meters will enable customers to reduce consumption and utilise higher amounts of electricity, increasingly from renewable sources, at off-peak times. Smart meters will also facilitate the development of micro-generation smart grids, and the increasing electrification of transport and heating. Smart meters are configured to record consumption in day, night and peak time periods, as well as in shorter half hour intervals. Smart meters are also configured to record any electricity feeding into the grid. Customers with a smart meter will be able to avail of new tariffs and services, which will be available from electricity supply companies from 2021. These tariffs and services will include the ability for energy companies to offer micro-generation tariffs so customers can get paid for producing electricity that is fed into the grid. The climate action plan commits to having a micro-generation framework in place by June 2021.
On an EU level, the new green deal calls for much more citizen engagement with the clean energy transition to empower them to take action. Smart meters will enable customers to become much more involved and aware of their own energy usage and, potential, production. This citizen knowledge is a key enabler to help meet our own ambitious targets to 2023 and beyond. ESB Networks has begun the installation of smart meters in parts of Dublin, Cork, Laois, Kildare, Meath and Wicklow. This roll-out will continue on a phased area-by-area basis and a detailed roll-out plan is currently being developed.
Officials in the Department of Environment, Climate and Communications participate in a smart meter steering group that is chaired by the Commission for Regulation of Utilities, which also has representatives from ESB Networks, retail energy suppliers and other stakeholders. The steering group is working on all aspects of the smart meter roll-out and aims to ensure that communication between all of the relevant parties is effective and that targets set out for the roll out will be delivered.
I thank the Minister of State for her reply. I note that she said that during 2020 it is quite difficult to have the same pace of roll out as 2019, so I hope the situation will be better next year.However, if the roll-out has slowed down, it is the perfect time to re-assess and re-evaluate whether it is the right approach from both the cost and environmental perspectives. I have been speaking to businesses in Tipperary and around the country that have concerns, especially about costs. Every decision the Government makes and certainly every decision that is made in the Department of Business, Enterprise and Innovation is related to reducing costs for customers during this time. There is a certain level of concern, and it is factual, that introducing this is going to increase costs.
I set out a number of questions earlier and I would appreciate if the Minister of State would get the Minister, Deputy Eamon Ryan, to refer back to me in detail on them. It is a very important issue for households and especially for businesses that are struggling.
I acknowledge that the cost-benefit of this is crucial. If we want to incentivise people to be more cognisant of the electricity they are using and their energy consumption, it has to be simple for them to do that. The Senator asked a number of questions and I have noted them. I am sure somebody can look over the Official Report as well. I will bring them to the Minister, Deputy Ryan, and ask him to refer back to the Senator in a timely manner.