back to article E.ON fined £7m for smart meter fail

The UK's energy regulator Ofgem has slapped supplier E.ON with a £7m fine for failing "to supply relevant business customers through advanced electricity meters by the April 2014 deadline". In 2009, E.ON was given five years to provide its roughly 20,000 business customers with smart meters. Ofgem reports: "E.ON only …

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Re: And for customers who say "sod off"?

230MW isn't much compared with the grid overall, but it is still 230MW which we don't need to be supplying...

I might have to get myself a natural gas powered generator for blackouts...

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Re: And for customers who say "sod off"?

but it is still 230MW which we don't need to be supplying...

Oh, but we do. That is, if we choose to believe the work of fiction that is the UK smart meter business case. It's got the same excrement-stained credibility of the HS2 business case (or the Hinkley Point C business case), but civil servants and politicians never, ever admit they are wrong.

And in this case, the Conservative government are as fully committed to the smart meter project as the Libdems were in the coalition, and the clowns of NuLab before. They, and the berks at DECC hope that smart meters will be able to shift energy use patterns around so that the results of twenty plus years of "climate fear" inspired meddling can be alleviated by making demand fit available generation. Unfortunately, other policy objectives "decarbonisation" of heating and transport will roughly treble total electricity demand, so any remote chance that smart meters might have had of coping with current balances of generation and demand will be nil in the longer term.

Interconnectors were mentioned in a post above - along with the French plan to reduce dependence upon nuclear. But in the forseeable future, Germany is exiting nuclear power altogether, as is Belgium and Switzerland, and in the UK, all but one of the already life extended AGR fleet are supposed to shut down between 2019 and 2024. There's no chance that Hinkley Point C, Moorside, or Bradwell will be operational by then, so the choice will be blackouts, a new short term (ie very expensive) dash for gas, or dodgy life extensions for the AGR fleet.

I'd order your gas fired gen set, and a radiation suit. FWIW, if you can bid your gas gen set into the current auxiliary services market, and scoop all the available funding schemes, it'll have paid for itself in cash terms by 2020.

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Anonymous Coward

Bill passed to the customers

EON will just pass the cost of the fines on to their customers. A bit like the joke of government departments being fined for various breaches. It is the tax payer "victims" of whatever the breach who then end up footing the bill for the penalty.

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Re: Bill passed to the customers

Normally it's specifically not allowed to come from customers. I forget how but they take it from profits and prevent that profit from being clawed back in the future to ensure it is impacting the business not the consumer.

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Hang on...say that again....

"E.ON has also gained financially by avoiding the costs of installing and operating the new meters."

So, the government regulator admits that these devices cost money to install and operate, and that a "conventional" meter is cheaper? Does that means we have been fed a pack of lies by the politicians and power companies about how these dastardly things will save us money and be more cost-effective for all? Well, blow me down......

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Re: Hang on...say that again....

Does that means we have been fed a pack of lies by the politicians

Yes!

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Anonymous Coward

Accountability

If Alan Sugar was in charge, someone would be accountable for the £7m fine and would be fired. Well, we all know that program is not reflective of actual business practice.

The board were warned quite a while ago, most recently in March this year:

"E.ON New Business Director Don Leiper added: “Whilst the original delay to timescales was disappointing, it happened for the right reasons and will help ensure the rollout will be as effective as possible while also minimising disruption to customers.

“What’s important now is that we all focus on continuing to make the rollout a success and on reducing the chance of any further delays.”"

Looks like CAPITA were not accountable for the delay:

"The Data and Communications Company (DCC), run by outsourcing group Capita, is responsible for linking the 53 million smart meters with energy suppliers, network operators and energy services companies."

http://www.energylivenews.com/2015/03/05/smart-meter-rollout-suffers-delay/

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Re: Accountability

The board were warned quite a while ago, most recently in March this year:

How would being warned in March help them, given that they had to have the meters installed (or excuses tallied up and documented) by 6 April?

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Anonymous Coward

What good are smart meters when we don't have the electricity to run them given the UK's precarious position with winter energy buffers.

Call me a conspiracy theorist but I think smart meters about being able to cut you off at the flick of a switch.

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hmmm

As a consumer what does a "smart" meter do that a dumb one not do. Yes I can see what energy I'm using but why would I have things turned on that I'm not using (so could save by turning off)?

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Re: hmmm

As a consumer what does a "smart" meter do that a dumb one not do.

Allow the supplier to turn your power off when they don't have enough because the government and EU has decreed that base load supplying coal fired power stations are to be shut down and windmills given priority when supplying power.

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Anonymous Coward

If only ...

We could set up a wind farm inside the houses of commons ?

Plenty of windbags and hot air there in there

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Re: hmmm

Allow the supplier to turn your power off when they don't have enough

Actually, if there's power cuts due to an imbalance of generation and demand, who and where the cuts occur is solely the operational decision of the transmission system operator (National Grid) of the local distribution network operator, and they'd not use the smart meters to do that. They'd just tell critical businesses (industrials, hospitals and the like) and pull entire areas off load.

What DECC hope is that suppliers will use smart meters to come up with convoluted time of use tariffs that magically persuade everybody not to use as much power at peak times. Sadly the evidence is available (I've seen it, I work in the industry) that discretionary loads are a tiny part of peak power demand, so they can complicate the tariffs as much as DECC like, but it won't change demand unless sufficient poor people sit in the dark, shivering and hungry.

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Re: hmmm

"they can complicate the tariffs as much as DECC like, but it won't change demand unless sufficient poor people sit in the dark, shivering and hungry."

The New Winter of Discontent may change demand, but probably not in a way that the DECC envisages.

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Anonymous Coward

Given that the National Grid were paying up to £2500 per MWh for the extra power they requested during last week's Insufficient Safety Margin period (curse these warm November nights), I can only imagine the DoE's relief at the collapse of most of what is left of the UK's steel industry.

( normal price is around £60, the contraversially expensive nuclear plant proposal is around £92 )

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Anonymous Coward

A big steelworks can be a net exporter of electricity.

Actually, an integrated steel works produces enough fuel gas from the coke ovens, blast furnace and basic oxygen steelmaking plant to run a power station big enough to generate surplus electricity after supplying all the works requirements. You need to invest a lot in gas storage and cleaning though.

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Steel works use coal for their power requirements, and also because there is a chemical reaction between the coal and the iron ore. Aluminium smelters use lots of electricity, because their process uses electrolisys to extract the aluminium from the ore.

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National Grid were paying up to £2500 per MWh

The most marginal plant to meet annual peaks will only ever run for a few hours each year (and some years not at all), so almost the entire cost of the plant needs to be met by very high marginal rates. Looking forward, capacity needs will be met by offering a capacity payments of (from memory), 2018 auctions IIRC about £20/kW, so £20,000 MW.

Note that's per MW, not MWh. Capacity payments are made even if the plant never runs. In that case the cost per MWh is infinite. It's also very high if the plant runs for very low hours.

'twas ever thus. If you want to meet peak demand, you need assets that are used for a few hours per year.

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ok gas and elecy run wild ... this is what we have been told .. and a meter telling you how much your using is going to do what ? we use what we need I know exactly what I use and why every week ..

because that's what I use every week nothing more but sometimes less ..

so what is a smart meter going to do for me .. ?? nothing except allow someone in an office to turn me off when things get bad .. brown outs are coming .. and smart meters will help ..

atm it's blowing at 33mph gusting to 40 .. are the 400 or so turbines sitting off shore not so far away working ... no they have been shut down to windy .. when the wind eases they will draw power from the grid to restart .. are they green .. well no just grey paint and rust ..

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Internet of Smart Meters

Oh good more vulnerabilities in our national infrasctucture..

http://www.theregister.co.uk/2014/10/30/smart_meter_hackable_for_free_electricity_say_security_reserachers/

just to start with

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Anonymous Coward

E.ON fined £7m

would it be the reason why the estimated cost of a "smart" meter has more than doubled? Because somebody's gotta fund those fines?

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Re: E.ON fined £7m

Who knows? But British Gas and npower are both under investigation for the same failure to fit AMR meters to business customers, so further fines are possible. And these will be added to the £150m that OFGEM has fined the industry over the past five years.

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Costs?

"E.ON has also gained financially by avoiding the costs of installing and operating the new meters."

The entire selling point of smart metres has been that everyone saves money - customers can optimise their usage and only pay for exactly what they use, providers get to reduce waste and optimise production against demand, the government gets all kinds of tasty data to play with. If E.ON have gained financially by not installing metres, that kind of suggests that the entire thing has been a pack of lies from the start. Which is a revelation I'm sure we all find extremely shocking, but it is a little surprising that they're so blatant about admitting it. Maybe the right hand should have asked the left hand to leave that part out of the criticism? "You save money by not doing the thing we said would cost less" isn't quite the message they were supposed to be sending.

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