Last week, the Chief Executive of Centrica/British Gas Chris O’Shea caused outrage when he told a House of Commons committee that so-called ‘smart meters’ should be compulsory. But anyone surprised by this hasn’t been paying attention. The ‘smart grid’ has always required that all domestic and business consumers are fitted with smart meters, and compulsion is the only way that energy companies can manage the scarcity created by the U.K.’s aggressive climate policy agenda. It doesn’t matter how much this policy agenda is wrapped up in fluffy PR, it transforms the relationships between individuals, energy companies and the state.
According to the Times, O’Shea told MPs:
We think that in order to have the proper smart grid that’s required to keep costs low in the future, everybody should have a smart meter. … One of the things we should consider as to whether this is a voluntary programme, or whether it should be mandatory. … If you mandated it, then we could have that programme completed within the next five years.
Other energy retail bosses have said the same thing in the recent past.
Like many of the daftest climate and energy policies, the smart meter rollout was first devised in 2009 by Ed Miliband. Back then, the Government believed that 50 million smart meters would have been installed by 2019, but they didn’t start being rolled out until 2013.
Meanwhile, energy company bosses were candid about the reality behind promised upsides of the green agenda. In 2011, National Grid Chief Executive Steve Holliday told BBC Today :
The grid’s going to be a very different system in 2020, 2030. We keep thinking about: we want it to be there and provide power when we need it. It’s going to be a much smarter system, then. We’re going to have to change our own behaviour and consume it when it’s available, and available cheaply.
In 2013, a National Grid Director, Chris Train, caused controversy by appearing to suggest that electricity use is a ‘luxury’.
The problem that smart meters and the smart grid were always intended to solve was the fact that renewable sources such as wind and solar only provide intermittent energy. Whereas fuels like coal and gas can be stored and burned as required by power stations, neither the Sun nor the wind responds to human needs and wants. So our increasing dependence on these sources via the smart grid requires something to regulate our demand – to encourage our use of power when it is available, and to discourage it when it’s not. That mechanism is, of course, price. The smart meter, then, would encourage rationing through ‘dynamic pricing’. Furthermore, energy companies have lobbied for legislation that allows them to balance supply and demand by switching off appliances – and even supply – remotely. Hence National Grid senior staffers explaining that vast investments are required to achieve the U.K.’s emissions-reduction targets, and that the way we use energy will have to change radically.
Not surprisingly, take-up of smart meters has been far slower than governments have hoped. Nobody wants a device in their home whose only function will be to enable an energy company to charge them five quid for a shower before work. Yet to avoid public pushback, ministers since Miliband have falsely claimed that smart meters will help households ‘reduce bills’ and put the onus on energy retailers to implement the rollout – if they don’t show sufficient effort in enforcement of the Government’s policy, they can then be fined. Thus, the public standing of energy companies has diminished over the duration, fuelling a growing antagonism between customers and retailers, as smart meters and other policies, such as the destruction of coal-fired power stations, have caused power prices to triple since the early 2000s. Energy companies take much of the blame for Westminster’s policy failures.
Don’t misunderstand the point. This is not a defence of energy companies. Of course, companies like National Grid have their greedy eyes on the opportunities created for them by green dirigisme. But only a fool would expect them not to. And one thing that there is no scarcity of is fools in SW1A. Energy companies have been relatively candid, if one cares to look, whereas Energy and Environment Ministers, from Gummer, Yeo, and Huhne, to more ideological zombies such as Miliband and Davey, have promised that climate targets can be hit with no downsides. But whereas the targets are binding in law, the upsides they promise are not. Anyway, rationing is good for you, donchaknow?
Even as Ed Miliband was preparing his speeches to promise ‘lower bills’ back in 2009, his own office, the now defunct Deptartment of Energy and Climate Change (DECC), produced an analysis that, according to the Daily Mail, showed smart meters would produce “annual savings of just £28 a year off a typical annual duel fuel bill by 2020, meaning it will take around 12 years just to recoup the initial installation costs”. Not so, replied DECC officials, “if people were more proactive in using the meters they could actually slash around £100 a year off their bills”. Between 2009 and 2020, however, domestic electricity prices rose by over 30% in real terms, having already risen by a third since the turn of the century.
Westminster’s climate ambitions, epitomised by Ed Miliband, don’t even give us the option of running to stand still. Even less does Miliband’s characteristic dogma and intransigence allow debate and democracy to represent our views.
Legal force was always going to be required to put smart meters into the homes of people who did not want them, and who recognise that such devices are not capable of serving their interests. And that antagonism was necessarily going to require a transformation of the relationship between consumers and energy companies. Henceforth, the latter would require unprecedented statutory powers, including a suspension of the requirement to supply reliable power to customers, who would be paying ever more for an ever-diminishing level of service, while energy company profits were underwritten by the Government. And that is made necessary by the fact that the wind is not always blowing, and today’s generation of politicians are no more capable of responding to reality and the public interest than a wind turbine can move without wind.
There is therefore nothing surprising about Chris O’Shea’s remarks.
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