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« Benny at the Senate | Main | Niceness at home and abroad »
Tuesday
Dec022014

Department for Exaggeration, Crookery and Conmen

Here's an astonishing essay, looking at the shambles DECC has made of smart-meter rollout.

Last week the UK’s Department of Energy and Climate Change announced that the UK’s smart metering deployment was facing another 12 months delay.  That’s 18 months after they announced that the UK’s smart metering deployment was facing another 12 months’ delay.  This is not all bad news.  It means that the growing population of consultants within DECC can look forward to what is fast becoming a never-ending gravy train of consultancy work, public consultations and project reviews.

There are also some astonishing revelations about DECC's attempts to hide its incompetence and this rather juicy ending:

It’s all part of the Alice in Wonderland world that is our current energy policy, which is coming to resemble Swift’s satire of extracting sunbeams from cucumbers.  That’s probably the only renewable energy policy that DECC has not tried funding, but now I’ve brought it to their attention, they might.  From feed-in-tariffs to keep the voters happy to offshore windmills that are about as effective as treadmills for mermaids, we have a department that is out of control and prepared to squander taxpayers’ money on anything that can be claimed to save energy, ministerial face, the climate or the world.

And you can count the MPs who give a stuff on the fingers of one hand.

Read the whole thing.

(Coincidentally, the Commons Energy and Climate Change Committee are taking evidence on smart meters, right now).

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Reader Comments (36)

With Mr Davey now on yet another taxpayer funded climate junket to the far corners of the world perhaps now would be a good time to cancel his passport. He has done far more damage to this Country that any returning terrorist could hope to achieve and will pose a much greater threat upon his repatriation.

Dec 2, 2014 at 10:20 AM | Unregistered CommenterIvor Ward

Good idea Ivor: all Jihadis, Climate or Islamic, should join together under a common Green Flag.

When he wears black uniform and beheads deniers with his sword, he will have gained my real admiration.

Until then, he is a poseur, agent for the crony capitalists really pushing this fake science on us.

Dec 2, 2014 at 10:28 AM | Unregistered CommenterNCC 1701E

Hands up anyone who thinks any individual will ever be prosecuted for this waste of public money?

Trebles all round!

Dec 2, 2014 at 10:33 AM | Unregistered CommenterStuck-Record

I like the note at the end....

" Since writing this, I’ve been informed by a reader that British Gas has just released the “most detailed study ever undertaken” on the efficacy of their smart meters. It found positive benefits, with electricity savings of 7%. This “most detailed study ever undertaken” covered 14 homes across a period of 10 weeks."

Dec 2, 2014 at 10:36 AM | Unregistered CommenterMikeB

"Treadmills for mermaids" has to be a classic. Worth noting.

Incidentally, the spelling is "exaggeration", not wot you sed!

Dec 2, 2014 at 10:56 AM | Registered CommenterMike Jackson

I've said it before about 'Smart Meters': we need to be sure whereof we speak.

I have had two BG 'smart meters' (though neither are now operational). They merely give a detailed indication of units of electricity consumed and, based on the user storing a value of pence/kWh - which they need to calculate themselves - it tells them how much they are being charged on a daily, weekly and monthly basis.

But, the 'Smart Meters' that I believe the government talks of are the types that can be controlled externally. A totally different beast.

Dec 2, 2014 at 11:34 AM | Unregistered CommenterHarry Passfield

A while back BH posted a link to:

The House of Lords
SCIENCE AND TECHNOLOGY SELECT COMMITTEE
The Resilience of Electricity Infrastructure
Oral and Written evidence

It did not seem to me that DECC was too keen on smart meters and that smart meters were being rolled out as demonstrations and not for wide scale implementation (something that should have been done for PV & Wind, thank goodness the shores are not also littered with remnants of the wreckage of massive Wave farm wide scale implementation).

Government – Written evidence (DECC) Page 126
Power Electronics and Control Systems

9.12 Many so-called ‘smart grid’ technologies exist today but their cost and complexity mean that they are only used for niche applications, for example in situations where very high value is placed on avoiding supply interruptions, or in isolated grids (e.g. Scottish Islands) where the use of new technologies can defer or remove the need to spend large sums of money on conventional technical solutions. Other potential advantages can include speeding up and lower in the cost of new connections.

9.13 The technologies are already being rolled out through smart grid demonstration programmes which have been taking place over the last few years; the aim is to identify which of these technologies provide the best value for money. Ofgem funding has been particularly valuable in incentivising utilities to trial and demonstrates these techniques and systems, and experiment with other stakeholders in how to use them. Major technologies being used in these programmes include Active Network Management, Storage, voltage optimisation and also novel commercial solutions, e.g. aggregating demand through new DSR providers.

Dec 2, 2014 at 11:40 AM | Unregistered CommenterPaul in Sweden

Predictable and predicted.

Dec 2, 2014 at 12:27 PM | Unregistered Commentercheshirered

'Smart' is an inappropriate word to use in conjunction with anything so-called Government does, but the DECC....

Dec 2, 2014 at 12:46 PM | Unregistered CommenterJohn B

Ah - yes....

it's all quite familiar stuff to anybody who's spent time trying to tease out wrongdoing in public service.

What we have is a crew of hubristic, incompetent self interested twerps meddling with something that they self evidently do not understand and rewarding themselves handsomely whilst simultaneously blocking any examination of the effectiveness of their activities towards even their actual stated goals...

The real problem is how to dispose of them in an effective fashion and actually open the discussion so that those with actual evidence and experience of the matters to hand get to influence policy.

In my dealings with a closely related body - if they don't say anything - they "are up to something" and if they do communicate it's almost invariably lies and distortion. In my case - this is evidenced paranoia :-) The presumption of "unquestionable authority" vested in them as a "Government Department" simply rubs salt in to any woumds.

How does one deal with that without resorting to decimation in the Roman Army sense?

Familiarity does indeed breed contempt

Dec 2, 2014 at 12:55 PM | Registered Commentertomo

The extract linked from Swift's Gulliver's Travels is priceless; so precise in it's mockery although almost three hundred years old. It might be taken from a trip to the UEA Department of Climate Science. It is in fact about a visit to the Academy of Lagado.

"The first man I saw was of a meagre aspect, with sooty hands and face, his hair and beard long, ragged, and singed in several places. His clothes, shirt, and skin, were all of the same colour. He has been eight years upon a project for extracting sunbeams out of cucumbers, which were to be put in phials hermetically sealed, and let out to warm the air in raw inclement summers. He told me, he did not doubt, that, in eight years more, he should be able to supply the governor's gardens with sunshine, at a reasonable rate: but he complained that his stock was low, and entreated me "to give him something as an encouragement to ingenuity, especially since this had been a very dear season for cucumbers." I made him a small present, for my lord had furnished me with money on purpose, because he knew their practice of begging from all who go to see them."

These days they want billions.

Dec 2, 2014 at 12:57 PM | Unregistered CommenterJohnOfEnfield

A delay in the Smart meter programme - never !

Just before I retired in Sept 1997, the electricity company for whom I worked had just received the first few Smart meters for testing. That was seventeen years ago !

Dec 2, 2014 at 12:59 PM | Unregistered CommenterJohn de Melle

@ Harry Passfield at 11:34 AM

"They merely give a detailed indication of units of electricity consumed and, based on the user storing a value of pence/kWh - which they need to calculate themselves - it tells them how much they are being charged on a daily, weekly and monthly basis."

I suspect those were NOT smart meters. Merely remote usage indicators. A 'sender' clamped around the incoming electricity supply; and, a remote display unit so you could watch usage-bars rising & falling.

Dec 2, 2014 at 1:18 PM | Unregistered CommenterJoe Public

The author has such a way with words!


"He also made much of the fact that DECC consults widely on the smart metering programme. Having been involved in many of these consultations I’ve come to realise that DECC uses a special civil service version of the word, which is effectively a conflation of condescend and insult."

Dec 2, 2014 at 1:27 PM | Registered CommenterSkiphil

Joe Public

I think this is a wider issue than simply smart meters.- billing is obviously central to the operation of a utilty.

The billing systems of some of the utilities make Wonga and the pay day lenders look like philanthropists. This has its roots in the telecoms business where fraudulent exploitation of human frailties reached an art form. Estimated bills, inflation of "meter" readings(whose data is it btw?) and mischievously contrived byzantine complexity in tariff structures.

I was talking with a CHP supplier yesterday and his experience is that even in public bodies (mostly but not exclusively local councils) when "professionals" are tasked full time with getting best value for the public spend - they regularly do *not know* actually what they are paying for electricity or gas on a per unit basis.... and so cannot do the cost benefit for a CHP scheme honestly! (It has to be done for them - from the bills....!)

Anybody who expects smart meters to magically change this situation with the present opaque tariff structures is in my opinion completely deluded. The ethos of ENRON lives on....

Dec 2, 2014 at 1:41 PM | Registered Commentertomo

Joe Public: Yes, you're no doubt quite right, I didn't have smart meters, just 'remote usage indicators'. But if you go to the BG website Smart Meters is what they've called them for a few years. I figure it to be the ultimate 'bait and switch'.

Dec 2, 2014 at 1:49 PM | Unregistered CommenterHarry Passfield

"the Commons Energy and Climate Change Committee are taking evidence on smart meters, right now"

Dangerous!!

Even if these meters are really dumb, these MPs will soon be outsmarted by their own electric meters.

Dec 2, 2014 at 3:02 PM | Registered CommenterMikeHaseler

I found this report immensely encouraging. It almost certainly means that the Smart Meter project will fail - abysmally, and expensively - but this will be a far cheaper and less destructive outcome than if the dam things had been implemented.

Dec 2, 2014 at 4:18 PM | Unregistered CommenterCapell

MikeHaseler

the UKMO have spent £97M on a Red Dwarf style talking toaster with "120,000 times more memory than a top-end smartphone."....

Any answers generated will involve toasted bread products CO2 induced AGW....

Dec 2, 2014 at 4:27 PM | Registered Commentertomo

I trust various "consultants" will doing very nicely out of this in the usual manner. Why work for a living when you can make a killing fckng around with the nation's electricity supply. That's not a question.

Dec 2, 2014 at 4:32 PM | Unregistered Commentermichael hart

@ tomo at 1:41 PM

"Estimated bills, inflation of "meter" readings(whose data is it btw?) and mischievously contrived byzantine complexity in tariff structures." is a little disingenuous.

1. Estimated readings, whether over- or under-estimates always 'sort themselves out' at the next firm reading.

2. In the absence of a firm reading, utilities use historic weather data (such as Degree Days) to 'estimate' a reading. It's automated & in the grander-scheme-of-things, it's surprisingly accurate. It will rarely be precise for any one household, because everyone, yourself included, changes their usage patterns.

3. Gas Tariff Structures are relatively easy to understand by anyone with a modicum of common sense.

"I was talking with a CHP supplier yesterday and his experience is that even in public bodies (mostly but not exclusively local councils) when "professionals" are tasked full time with getting best value for the public spend - they regularly do *not know* actually what they are paying for electricity or gas on a per unit basis."

4.1 Half-wrong. Commercial gas contracts comprise a commodity price, and may rarely also include a Daily Standing Charge.
Anyone incapable of working out their gas price doesn't deserve to be in a job.

4.2. Large electricity users will be on a Maximum Demand Tariff/Contract. On those, the peak/maximum demand in any 1/2-hour period determines the unit cost for that month. [To discourage peak consumption]. They will never know their unit cost until that month has finished.
That is the objective of 'Smart' meters - to record instantaneous demand & enable it to be billed.

5. If your CHP contact was discussing a project with a local council, I'm unsurprised that commodity prices were not known. Most purchasing is done centrally to bargain a greater consumption for a lower price. By centrally I mean by groups of County Councils.

Dec 2, 2014 at 5:15 PM | Unregistered CommenterJoe Public

Cracking essay.. Who is the writer..?

'Treadmills for mermaids'.... Love it...

Dec 2, 2014 at 6:13 PM | Unregistered Commentersherlock1

Joe Public:

1) In my experience, estimated readings are abused a) through over-estimate, and b) when adjustment is made on a real reading, through adjustment that favours the supplier by over-allocating to whichever period is the more expensive.

2) See 1) above - in fact, collectively the Big Six were advance charging by some £2bn when OFGEM finally started to do something about it. I complained about it not long after OFGEM were formed, pointing out that in effect they were falsifying their accounts by claiming to have sold power they hadn't actually sold. Being a toothless Labour quango, they did nothing.

3) As wholesale gas is traded in p/therm, the move to pricing in kWh is (purposely) non-transparent: it's a bit of a shock if you do do the calculation to find just how big the mark-up is.

Dec 2, 2014 at 8:04 PM | Unregistered CommenterIt doesn't add up...

@ It doesn't add up... at 8:04 PM

"1) In my experience, estimated readings are abused a) through over-estimate, and b) when adjustment is made on a real reading, through adjustment that favours the supplier by over-allocating to whichever period is the more expensive."

Plainly & logically ridiculous: If a supplier 'over-estimates' as you allege, then it deprives itself of revenue because prices rise over time, and the least cost units are those sold earliest!

Ah, you counter - it improves its cash-flow by over-billing.

To which the energy companies would counter-argue that it's not unknown for unscrupulous consumers to do the reverse and deliberately submit 'under-readings'.

"3) As wholesale gas is traded in p/therm, the move to pricing in kWh is (purposely) non-transparent: "

Natural Gas is an international commodity; in which the units it is traded is irrelevant.

The UK uses metric units (MJ & kWh); a therm = 29.3071 kWh. How & why is is '(purposely) non-transparent'?

Do you complain to your garage when it sells you fuel in litres when that commodity is traded in 'barrels'?

Dec 2, 2014 at 9:48 PM | Unregistered CommenterJoe Public

Joe Public:

1) Wrong - in one friend's case this simply did not occur (and multiple (3 x quarterly) reading appointments failed by the company) - the bill estimate was ludicrously ratcheted up "to get the customer's attention" according to a call centre customer service supervisor (it certainly did - but not in the intimdatory sense in which it was intended to work) My sister had to go to The Consumer Council to get over £1500 in accrued estimated billing refunded after failing at the call centre. And that's just in my circle - I regularly hear other tales of utility billing derring-do from individuals.

2) As It doesn't add up... elaborates - there can only be one reason for accruing £2 Billion in over- estimates. I know my usage changes because I'm not in the UK dwelling 6 months a year - something BT failed to check before sending me an automated and wildly inaccurate bill :-)

3) We are talking public sector simple shoppers....

4.1) I din't make it clear that I was talking about primary and junior schools not involved in utility aggegation schemes. See 3) for job security. I'd say that anybody sanctioning a publicly funded photovoltaic system that points into deep space rather than at the nearest star doesn't deserve a job either - but hey - what do I know?

4.2) I am well aware of commercial electricity billing - both as a consumer and as a generator. Clearly a case for CHP in there on the demand management side eh?

5) AFAIK the aggeragation schemes are not running in my area - there has been some talk about it and the council assuming the role of an electricity and gas retailer - but as yet they have not been pestering me via the letter box or inclusions with my Council Tax bill. Miliband's Labour Party had a plan to sell Hampstead hand crafted red electrons IIRC.

Not all utility companies are guilty of abuse - but the ones that indulge in it for the most part escape scot free. As far as DECC and utility billing is concerned I suggest you acquaint yourself with this

Obfuscation by arithmetic is central to the opaque billing we see - a prominent printout of the price per unit paid on every bill would be trivial. Price transparency is an uncomfortable fact of life and it would seem that many retailers seek to avoid it at all costs....

Then there's the whole malarkey of environmental levy stuff - which deserves more attention. It's like the selling of medieval indulgences ....

Dec 2, 2014 at 10:01 PM | Registered Commentertomo

'tomo / it doesn't add up'. What would you suggest to the CMA enquiry then, if you had the chance to say it?

What would you like to see changed or investigated?

Dec 2, 2014 at 10:34 PM | Unregistered CommenterFen Beagle

The real problem with smart meters is that they are used for demand management not provision of supply. The manufacturer's groups who advise the EU are suggesting that all appliances are fitted with microchips so that thro the medium of the smart meter the supply companies can modify demand if they find it is getting too high for the windmills. Add to this the fact that MIT have discovered how to extract charge from fully charged electric cars when connected to the mains, life could be most uncertain for the poor consumer. It won't be heat or eat, it will be breakfast or commute.

Dec 2, 2014 at 10:48 PM | Unregistered CommenterDizzy Ringo

Fen Beagle

The toolbox is there - bluidy well use it - and make sure the impact is on the relevant managers/execs - and not on the customers via higher bills.... I am not acquainted with CMA''s MO but transparency has to be in there - that revolving door between regulators and the regulated has to be bricked up.

The by comparison pretty trivial antics at insurance brokers attracted some consequences not long ago. As an aside - wrongdoing in public employ should also attract similar sanction.

Dec 2, 2014 at 10:58 PM | Registered Commentertomo

@ tomo at 10:01 PM

Based upon your Point Numbering:

1. On the contrary - I was perfectly correct when (at 5:15pm) I stated "Estimated readings, whether over- or under-estimates always 'sort themselves out' at the next firm reading."

3. " We are talking public sector simple shoppers...." If they don't realise the price they're paying for a commodity, they don't deserve to be employed as buyers.

4.1 "I din't make it clear that I was talking about primary and junior schools not involved in utility aggregation schemes." As I clearly stated at 5:15 - "4.1 Commercial gas contracts comprise a commodity price, and may rarely also include a Daily Standing Charge."
Primary and Junior schools are likely to have too-low power consumption to be 1/2-hourly metered.

4.2) "Clearly a case for CHP in there on the demand management side eh?" On the contrary. If you're familiar with CHP, that is (best) for base load, not peak load shaving.

5) "AFAIK the aggregation schemes are not running in my area". 'Multi-premises' contracts are offered by all suppliers nationwide to eligible consumers who own or operate qualifying multiple premises. The MOD has a contract(s) covering all barracks, RAF-stations etc. Tesco, Sainsburys, Morrisons etc will have all (large) supermarkets & warehouse depots on contract. The 'tomo' family however, would not be eligible to include every house owned or rented by everyone up to & including the fifth-cousin twice removed. ;-)

I'm puzzled by the statement "Obfuscation by arithmetic is central to the opaque billing". Obfuscation by arithmetic is an oxymoron. If you're referring to the arithmetic seen on a gas bill, that's because a gas meter measures a volume, and consumers buy the heat content. It is necessary to calculate the heat content. What complicates matters is that the calorific value (energy content) varies month-by-month AND regionally. However, all gas suppliers always show the cv on every bill.

Hope this helps.

Dec 2, 2014 at 11:18 PM | Unregistered CommenterJoe Public

Joe Public

1) Yep - 11 months+ (and considerable heavy handed stuff) to get a firm reading? and £500+ in invoicing/compo for time spent waiting for a meter man? In my sister's case readings were taken but the estimated excess was not refunded to a reasonable level (let's say 2 quarters worth of "pre-pay" eh?) - so I don't accept the "always"

3) Yeah! verily - but what you gonna do about it?

4.1) And staffed in rather a lot of cases by people who really couldn't tell you what they actually pay per unit of electricity / gas.

4.2) So demand shaving is not a factor in CHP design? - right-oh.

5) Co-operative associations? (in the "true" sense of "not for profit" but benefit of the membership ?) Obviously larger users can negotiate - as can aggregated consumers when properly constituted. Presently unfashionable.

If you don't know "obfuscation by arithmetic" you are too young to have seen one of the early multi-page (I think my high water mark was an 8 pager) itemised phone bills and must be unaware of some of the reasons for the break up of AT&T in the USA. As far as gas bills are concerned there's a whole load of stuff about conversions etcetera on them - my point is instead of that - why not simply print out the relevant conversions - unless you don't want Joe Public to go off and figure simply what the mark up is :-)

Dec 3, 2014 at 12:21 AM | Registered Commentertomo

Fen Beagle:

Don't get me started. I was approached by headhunters looking for someone to take over from Stephen Littlechild back in the day. I declined the opportunity, although it wasn't the kind of political/crony/green mess it is now back then. Littlechild had done a fairly good job in ensuring competition, but there were some rough edges that the smarter companies were gaming at the expense of the less smart (Enron later showed them how to really do it!), and some doubts about short term price volatility offering an inadequate signal on new capacity. requirements.

Unpicking today's mess requires repealing most of the legislation of the past 15 years and starting again. Incidentally, the reason this is with the CMA and not OFGEM is that OFGEM is legally inhibited from doing a proper job, because it is required to assume that green=right. As OFGEM seem to be adopting a role as investor themselves these days, I think they should perhaps be one of the institutions enquired into.

I just went to the OFGEM site for examples of their involvement and found this:

https://www.ofgem.gov.uk//publications-and-updates/ofgem-gives-green-light-project-nemo

A £500m investment in a new 1GW interconnector to Belgium is to be guaranteed revenues of £50.4m a year even if it never operates, essentially. The risk is one that should be shouldered by normal project debt and equity finance, not off the backs of consumers. At full capacity, consumers will be charged £9/MWh for its use (the £80m revenue cap). A problem for interconnectors is that if we ever had a sane energy policy both sides of the channel we probably wouldn't need them all, just as we wouldn't need a grid that's twice as expensive as the one that delivered more power successfully in the days before windmills.

Dec 3, 2014 at 12:50 AM | Unregistered CommenterIt doesn't add up...

Joe Public:

The conversion from metered volume to energy content is rather less the issue, although it was nice and easy to get the ballpark in the days of imperial meters and price per therm, since a good first approximation is that 100 scf = 1 therm. But I doubt many consumers have any inkling that there are ~29.3kWh in a therm - you won't find the conversion on your bill - even if they read about NBP wholesale gas prices.

Even more obfuscation comes from this:

https://www.ofgem.gov.uk/publications-and-updates/supply-market-indicator-november-2014

Which requires 33 pages of explanation:

https://www.ofgem.gov.uk/ofgem-publications/91533/smimethodologynov2014.pdf

and quite a detailed appreciation of how the industry operates. It also has the unfortunate role of suggesting how the industry should behave, effectively benchmarking against an 18 month forward hedging strategy that inevitably adds to costs, and masks many of the real costs of energy policy. Obfuscation is right at the heart of it all - as required by Ed Miliband's 2010 Energy Act that gives OFGEM the duty to hide the truth about the cost of green energy policy, and never to question whether it is in consumer interests.

Dec 3, 2014 at 1:41 AM | Unregistered CommenterIt doesn't add up...

'It doesn't add up'

So you are saying your concern would be on green levies, political involvement etc. affecting prices, and security, more so than the business practises of the companies themselves? This would require the CMA to broaden their focus, which at the moment is on the energy companies.

How would you set out to achieve that in advance?

Dec 3, 2014 at 9:47 AM | Unregistered CommenterFen Beagle

Oh, you now have a "Department of Energy and Climate Change" - I was wondering who was responsible for changing the climate all the time. Now, in absence of Russian gas on continental Europe we'll soon need one to add "... for local warming" too. As for smart metering I keep saying that the pigs don't get any fatter if you weigh them more often. Put thermal collectors on any roof and capture the sun's heat at about three times any photovoltaic contraption ever could and you're 90% done with carbon emissions ...

Dec 3, 2014 at 10:33 AM | Unregistered CommenterColm Barry

Fen Beagle:

Given that Labour created the Big 6 oligopoly in the merger boom of 2002, I would certainly seek to break it up and restore more competition to the market. Effectively, competition has been destroyed by requiring companies to buy expensive power if they don't produce expensive power themselves and telling companies that they're expected to hedge their costs a standard long way forward. CFDs that guarantee prices do nothing to promote competition based on being able to undercut an inefficient supplier. Hidden subsidies to ( especially Scottish) windfarms through undercharging for their cost of grid connection and impact. OFGEM and DECC decide on all the capacity investments. It all reminds you of a Sovietised system, not a competitive one. Let those who want to pay a premium for green power pay for it themselves.

Dec 3, 2014 at 12:57 PM | Unregistered CommenterIt doesn't add up...

Why is DECC involved at all? They are just getting in the way of how I deal with my supplier.

I pay my supplier. They supply me. If they think it has value to them they can put in a smart meter. If I don't think the smart meter benefits me I find a supplier who doesn't use them.

Government might have a place meddling with commerce when they can balance their own books without borrowing.

Dec 8, 2014 at 10:28 AM | Unregistered Commenterclovis marcus

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