Next-generation smart metering technology is central to the government’s future energy conservation plans, according to the Energy Review published last week.

But power companies say the technology, estimated to cost between £5bn and £8bn to implement, is unworkable without agreed technical standards.

Smart meters provide real-time measurements of energy consumption in cash terms rather than watts of electricity. The devices send regular and detailed billing data to energy suppliers over power cables or the internet.

Suppliers will have to overhaul their IT systems to cope with the huge increases in data generated by the meters, and this information will have to be cross-referenced with existing systems and stored for up to three years to meet data regulations.

British Energy IT director Ian Campbell says that without agreed rules or common functions a meter installed by one firm could not be read by a rival should the homeowner or business decide to change supplier.

‘If a customer changes supplier after having a smart meter fitted, the energy company will have to recover its investment somehow,’ he said.

Last month, energy watchdog Ofgem announced plans to set up an interoperability working group to establish technical specifications relating to the meters.

But suppliers say Ofgem must do more, and only a mandatory system will solve the problems.

‘Ofgem should specify one metering system that would be made standard across the whole country,’ said a spokesman for Npower . ‘Then energy firms could add plug-ins to allow them to innovate as they see fit.’

Individual smart meters cost up to £180 each.

Petter Allison, head of metering at British Gas , said: ‘The cost implications of replacing every single meter across the country mean they are not really viable for the mass market.’

Russell Hamblin-Boone, a spokesman for the Energy Retail Association , says there is no clear business case for energy firms to invest significant sums in smart metering. ‘Some firms would like to see metering taken out of competition altogether,’ he said.

‘If one body was imposing a single system, then all the companies could adjust their IT systems to deal with that.’

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