The government announced yesterday that it will require all households to have smart meters installed over the next decade. The decision was announced by the energy minister Lord Hunt of Kings Heath as the House of Lords debated the Energy Bill yesterday afternoon. The move to introduce smart meters – which will tell householders exactly how much gas and electricity they are using – was seen by peers as integral to the success of a new renewable energy feed-in tariff. Announcing the mandatory smart meters roll-out, Lord Hunt said: “This is a major step forward; no other country in the world has moved to an electricity and gas smart meter roll-out on this scale. “We anticipate a period of around two years to resolve the issues and to design the full detail of a domestic roll-out. Our aim is then to ensure that the subsequent roll-out happens over a period of 10 years. This would see delivery of smart meters by the end of 2020 to align with our renewables targets,” the minister went on to say. The government plans to present an amendment to the Energy Bill at its third reading in the Lords, scheduled for next Wednesday (November 5), to make clear the legal powers needed to introduce smart meters. An impact assessment analysis is expected to be completed by the end of 2008 before the full details of a national smart meter roll-out are revealed. This analysis should provide up-to-date figures on costs and benefits, Lord Hunt told fellow peers yesterday.

Ministers are keen for smart meters to be rolled out as soon as possible, although details like how the initiative would fit with European free trade rules will have to be considered.

Consultations will have to be carried out to seek the views of both industry and energy regulator Ofgem before proposals are presented to Parliament, Lord Hunt said, adding that Secretary of State Ed Miliband is “keen to make rapid progress in this area”. Smart meters are not only critical for energy savings at home but will soon be inextricably linked with the feed-in tariff. Baroness WilcoxLord Hunt concluded: “Once the details of a roll-out are drafted into licensed modifications, we must lay them before Parliament so that the complete design of the roll-out can be scrutinised.”

Yesterday’s report stage debate on the Energy Bill saw the government’s deputy chief whip, Lord Davies of Oldham, suggesting there were a number of options available for a national roll-out of smart meters.

It could see a centrally-planned programme carried out by companies awarded certain regional monopolies, with energy suppliers co-operating to allow the smart meters to be fitted. Or, it could take the form of a fully competitive metering market.

Lord Davies said: “The government are working with a range of stakeholders to define and evaluate various market models, and we expect to be in a position to reach final conclusions in due course as part of our broader work looking at the possible implementation of a domestic rollout.”

Conservative peer Baroness Wilcox, who prompted the government announcement on smart meters through a probing amendment to the Bill yesterday, welcomed the decision to bring in smart meters across the country.

She suggested the smart meters would be a step towards feed-in tariffs for small-scale renewable energy, where householders will be able to benefit from long-term contracts to sell excess energy to the grid at above-market rates.

Baroness Wilcox said: “Smart meters are not only critical for energy savings at home but will soon be inextricably linked with the feed-in tariff. The government are as alert as we are to the fact that we in this country are very late in protecting our energy supply and energy usage, but this concession by them is a great step forward.”

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