The Government's recent announcement on the deployment of smart meters officially marks a new phase in the UK's fight against climate change, writes Omar Abbosh, Accenture's managing director, resources for the UK and Ireland.
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After years during which attention has been focused on the supply side of the energy debate and the search for low carbon alternatives, smart meters will now shift efforts to the demand side of the equation. But as we gear up to a large roll out of end-user technology, we must not forget that smart meters should be seen as just one part of a larger and more ambitious investment in a new energy transmission infrastructure, at the heart of which will be smart grids.
The Government's smart meter initiative could provide the UK with one of the most advanced means of monitoring and managing energy demand. It should also reduce the cost of meter reading, allow utilities to offer a range of new services, and ensure that greater revenues are not entirely dependent on greater levels of energy consumption. Smart meters therefore pose a challenge. Will utilities be able to manage the volume of real time data generated? Will they adapt to a less commoditized, more bespoke business model, requiring new customer service skills and fresh investment in CRM technology? Will other players from outside the utilities sector enter the market for valued added services?
Crucial to the success of the smart meter plans will be the nature of the chosen roll out. 48 million devices will have to be installed in 26 million homes. Today's competitive market suggest that utility companies should be free to install meters in their own customers' premises. Others fear this could lock customers in as well as slow down the process. Instead of multiple utilities installing meters in every street, they prefer single entities being given responsibility for blanket roll outs in each region.
And once the meters are installed, a central communications hub will be required to hold and share meter data between utilities. This central platform will support exchange information between otherwise separate networks of meters, enabling consumers to switch supplier without restriction.
Our migration to a low carbon economy, however, needs far more than smart meters. We need to move to a world of distributed energy, in which millions of homes and businesses generate their own energy and sell it back to the energy pool; in which they can charge up the electric vehicles the Government hopes we be driving. We need urban environments that can respond in real time to energy availability by stimulating real time changes in consumers' behaviour, whether it's the time they drive and charge their electric cars, or the way they use household appliances.
Smart grids will not require a rip and replace of today's electricity grid. Instead, today's grid will be transformed with intelligent devices, sensors and data systems to manage demand and supply dynamically. But above all, smart grids require new levels of collaboration between the private and public sectors, in particular, between utilities and the metropolitan authorities who will pioneer this technology as part of smart cities. We calculate that by working together in cities, the private and public sectors can bring forward the breakeven point of smart grid investments by five years. Those five years will make the difference between hitting and missing our greenhouse gas targets.