All homes in Britain will have smart meters installed by 2020
under
plans published today by the Department of Energy and Climate
Change.
The proposal to replace almost 50 million of the country's gas
and electricity meters with networked meters will cost £10bn but
deliver net savings of £2.5bn to £3.6bn and cut carbon emissions by
2.6mt/y by 2020, the government said.
Smart meters employ a centralised national communications
network that allows energy supplies to read them remotely. This
will eliminate physical meter readings, estimated bills and the
need for many call centre jobs, the government said.
Consumers can monitor and adjust their energy consumption
directly by using off-peak rates more. Consumers who generate their
own energy will be able to sell their surplus to the grid.
An earlier cost benefit analysis of the impact of smart meters
on small and medium enterprises and the public sector by the
department of business found that installing smart meters over 10
years would cost £552m but would create benefits of £1.44bn; doing
nothing would save £533m.
An energy department spokesman said that study was a work in
progress and has been refined since. The current impact assessment
on domestic meters shows capital and operating costs of £9.3bn,
which the government believes will lead to savings of £11.8bn.
Rolling out smart meters for business and the public sector
would cost an extra £791m for savings of £2.54bn, the government
said. "We assume that there are no additional IT and legal and
contractual costs for the non-domestic sector as they have already
been taken into account in the IA (impact assessment) for the
domestic sector."
Left to themselves, energy suppliers would only install smart
meters where it made economic sense, between 20% and 30% of some 47
million meters, the government said.
Energy and climate change secretary Ed Miliband said the move
was in line with government efforts to fight climate change. He
published a consultation paper to gather opinion on what is the
best way forward.
The government's preferred option makes energy suppliers
responsible for the installation and maintenance of the smart meter
but communication to and from the device is coordinated by a third
party across the country.
The other principal models considered are a competitive model,
where energy suppliers manage all aspects of smart metering,
including installation and communication, and a fully-centralised
model where regional franchises are set up to manage the
installation and operation of smart meters with the communications
to and from the meters managed centrally and on a national
level.
Another model proposed by management consulting firm Accenture
is to roll out smart meters on a city-by-city basis, and to
integrate the resulting network with other city-based services.
"The role cities can play has been 'underweighted' by policy
makers," said Sander van 't Noordende head of the firms's resources
division. He said they can provide the scale, scope and integration
of utility services such as communications, energy, transport,
waste, and water that are big enough to make a difference. They are
crucial too because cities are the main generators of CO2. Without
their buy-in, any national plan is doomed, he said.