What are Smart Meters ?

Conventional utility meters are stand-alone units which measure cumulative consumption, sometimes for separate time periods (‘Economy 7’).  They must be read physically.  ‘Smart Meters’ have the ability to record second-by-second consumption and send that data to a wireless home display so that consumers can monitor their usage (this facility is already available via products such as the Owl).

More importantly, a Smart Meter can transmit consumption data via a SIM card or the internet, and receive data or instructions via the same method.  This will enable utility companies to monitor consumption on a minute-by-minute basis, and potentially vary tariffs with equal rapidity.  Each Smart Meter will have the facility to be remotely switched between credit and pre-payment modes, or even remotely disconnected.  This will give energy companies far greater leverage over their customers.

The term ‘Smart Meter’ is a catch-all term for a modern meter which can transmit data.  The Department for Energy and Climate Change (DECC) prefers to use the term ‘ADM’ (Advanced Domestic Meter).  This is because, once specifications are agreed, the term ‘Smart Meter’ will have legal meaning as a meter compliant with a precisely defined technical specification.  As yet no universal specification has been agreed amongst meter manufacturers / energy suppliers.  In Sept 2012 the EU approved the most recent draft of technical specifications, named ‘SMETS’ (Smart Metering Equipment Technical Specification) without enforcing conformity.  In short – there is currently no guarantee that an ADM supplied by one energy company will maintain its ‘Smart’ functionality when switching suppliers.  Whereas the UK’s Smart Metering Programme seeks to enforce interoperability, a November 2012 OFGEM decision fell short of imposing this as an obligation.  Instead it imposed the requirement that energy companies forewarn potential new customers of any loss of Smart functionality before switching suppliers.

When will I get one – must I have one ?

In July 2009 the EU set a target that 80% of households must have a Smart Meter by 2020 (they have been compulsory in Sweden since 2009).  Some UK utilities are already supplying ADMs for all installations.  The UK has 53 million electricity and gas meters across 30 million locations, and large scale replacements with Smart Meters are due to begin in 2014 and be completed by 2019.  The government requires that Smart Meters are available by end 2019 even in rural areas, but currently no legal obligation will be imposed on householders to accept one.  The Public Accounts Committee has described the challenges posed by this implementation as “huge”.  Government projections assume a 97% uptake, which currently seems unlikely – a recent government consultation discovered that 50% of UK inhabitants have never heard of Smart Meters, so a Central Delivery Body is being created to orchestrate the roll-out.

Where will the savings come from ?

Estimates anticipate the roll-out will cost £11.5 billion but deliver benefits of £18.6 billion.  It is unclear where the £7bln “savings” will be realised – or by whom.  The new meters will be paid for by consumers via energy bills.  The energy companies will make significant cost reductions by removing the need for meter-reading operatives, and have far better information with which to run their businesses.  Incidences of non-payment will dramatically reduce.

Renewable energy from sources such as wind and sunlight are unpredictable.  This, coupled with variable demand, make balancing the two an onerous task.  More accurate data from Smart Meters will allow energy companies better control of generation.  The greatest opportunities will occur not from electrical engineering – but social engineering.  The ability to send datasets to each Smart Meter to amend tariffs on a minute-by-minute basis will influence consumer behaviour.  Where possible, customers will adjust their energy usage away from expensive peak times, partially balancing demand and supply.

Additional information from: House of Commons Library Note SN/SC/6179 Author: Dr Patsy Richards

What are Smart Meters ?