The Department of Energy and Climate Change (DECC) is
expected to reveal its decision this month on how to implementa £10bn planto replace 47 million gas and
electricity meters with new smart energy meters in every British
home, office and factory by 2020.
The government believes smart meters will provide accurate
real-time information on consumers' energy consumption, encouraging
them to use less. Smart meters promise to give consumers the
ability to switch between energy suppliers almost instantly.
Micro-generators will be able to sell spare energy back to the
grid, and consumers will be able trickle-charge their electric cars
at the cheapest rate. There will be no more meter readers or
estimated bills.
The project will "dwarf" the Digital Dividend project to convert
TV broadcasting from analogue to digital technology, says David
Southwell, a spokesman for the
Energy Network
Association (ENA), which represents companies that own and
manage the energy distribution networks "Every home and office will
have to be visited [to fit the new meters]," he says.
Garry Felgate, chief executive of the Energy Retail Association
(ERA), which represents gas and electricity suppliers, says the
industry needs to invest up to £200bn over the next 10 years on new
power stations and distribution grids to meet environmental targets
and to ensure "the lights stay on".
The DECC impact assessment found that the smart meter project
would cost £9.3bn and return £11.8bn over 20 years. So is spending
the money now on smart meters the right way to go?
A DECC spokesman says the spending decision has been taken;
still at issue is the roll-out plan. But last week, the government
asked consultancy Accenture, which has
pushed for city-based smart grid projects, to take another look
at the business case.
Guy Doyle, chief energy economist at
Mott MacDonald, a
multinational management and engineering and development
consultancy, says there are cheaper ways to cut energy
consumption.
The biggest impact consumers can make on their energy bills is
to turn down their thermostats, improve insulation in their houses,
install energy-efficient boilers and lights, and swap their cookers
for microwave ovens, Doyle says. "MOreover, these savings are
locked in," he says.
It would be easier and cheaper to retrofit existing meters with
a very basic energy meter. Consumers or energy retailers could then
use existing fixed and mobile telephone, satellite and cable TV
networks, or possibly even the electricity grid (see box) for
communications, he says.
The information transfer requirement is negligible, he says.
"Message sizes are a couple of bytes and they can update once a
day. There would be some loss of functionality versus the premium
solution, but the savings would be considerable."
He discounts the claimed benefits of extra information and
control that smart meters and smart electricity grids could
provide, pointing out that most of the grid is already under
real-time control.
"There are about 300 grid supply point [GSP] meters [which
measure the change from high-voltage to low-voltage distribution]
all under real-time monitoring and providing very detailed
information about consumption. One would want to be confident that
the extra information from 28 million consumer metering points
justified the cost," Doyle says.
He agrees that providing regular feedback to customers on their
consumption should incentivise them to better manage their
consumption, but research shows that consumers are only likely to
save between 2% to 15% on their bills, and these savings are
temporary as consumers do revert to old habits.
The energy industry is keen to have a centralised data network
to manage the meters. But that might not be needed. Search engine
firm Google is already
testing
how to use personal Google pages to provide customers with their
electricity usage data with several energy companies, including
Glasgow EPB.
Southwell says smart meters are essential if consumers want to
recharge their electric cars at the lowest tariff, or those who
generate their own electricity want to sell any surplus to the
national grid,
But the real short-term consumer benefit of smart meters would
be to simplify and speed up switching between energy suppliers.
Doyle says the present process requires some 30-plus error-prone
steps.
"A smart meter and grid would allow consumers to change
suppliers almost instantly. Your supplier could take a reading
while you were on the phone, say you owe so much, which you could
pay by card, and the job's done," he says.
The other big advantage would be to cut the number of meter
readers. Not reading meters would save energy firms £2.6bn, the
impact assessment says.
But unemployment is close to record levels. Could the government
afford to throw more people out of work? Would meter readers be
happy to retrain to fit smart meters?
Had the decision to refresh the nation's meters been taken six
years ago, when the government's finances were stronger, there
would be little argument about it. But the size of the national
debt, the current account deficit, the untested carbon saving, and
the likely staff redundancies, all suggest the case for smart
meters now is unproven.
How will the smart grid be controlled?
The kind of communications network needed to control the smart
grid is a key issue affected by the decision on how the UK will
roll out smart meters and convert the nation's 50-year-old
electricity distribution network into a smart grid.
The question was the first asked in a
consultation on ways and means to
spend almost £10bn to replace the nation's 47 million gas and
electricity meters by 2020, the aim being to cut the nation's
energy consumption.
The Energy Retail
Association (ERA), which represents the six main energy
suppliers, is keen on a centralised communications network. It told
the DECC, "A combined central metering management system (which
includes communications network specifications) is the most
effective way to govern retail and metering arrangements."
Others argue it could be done using the existing telephone,
data, TV and possibly even the electrical power grid itself, or a
combination of them. Or that it could be done with regional rather
than national networks.
Jason Brogden, principal consultant for Engage and project
manager for the ERA's smart meter project, says interoperability is
crucial for the different components that make up the system. The
industry would prefer to specify the network in terms of
application interfaces that cover the meters' functions, the wide
area network, the home area network and the human interface (ie,
display), he says.
"The key thing is to define everything as a service," he says.
This will allow suppliers to provide innovative answers to the
meters, the networks and the displays because they have only to
ensure that their components can accept defined inputs and provide
defined outputs.
Either the government or the industry can then use procurement
policy to get competitive bids from smart meter manufacturers,
installers and communications services suppliers, he says.
Energy grid as broadband network
Two new standards are under development that will turn the
electrical power grid into a secure high-speed broadband
network.
They could allow energy companies to compete with existing
telecommunications network operators, or to earn more by renting
out spare capacity.
The
IEEE P1901 project will develop a standard for high-speed
(faster than 100Mbps) communication devices via alternating current
electric power lines. They will use transmission frequencies below
100MHz and run up to 1,500m from the nearest exchange or 100m from
other network devices in local area networks.
The standard will ensure the privacy of communications between
users and allow the use of networked devices for security sensitive
services. The full implementation will allow devices on the network
to talk to each other as well as other networks via Ethernet 802.1.
The standard will also comply with national electromagnetic
radiation limits to ensure they don't affect other electronic
devices.
The IEEE P1903 standard will allow local devices such as TV
monitors and personal digital assistants to use internet protocols
to discover, set up, and maintain their own local area network
independently of underlying transport networks.