The standard gas and electricity meters in many homes and businesses currently simply keep an eye on energy consumption and store this information so that readings can be taken. Businesses increasingly are adding management elements to the process of energy consumption, to better monitor usage.
Smart meters add a new layer of information processing, allowing the meter to communicate with the utility company who is supplying the energy. This gives the energy company the ability to vary prices, depending on consumption patterns as well as responding to power quality problems.
So what is in it for consumers? Well, you could argue that smart meters obviate the need for estimated bills and can help people to better manage energy use. For example, electricity pricing peaks predictably during any 24-hour period and in different seasons. Utility companies can use smart metering to charge customers by time-of-day and they say that this will prompt consumers to reshape their consumption habits.
But recent history tends to show that smart meters do not, over time, lead to functional changes in consumer energy consumption. Indeed, for many people, consumption is predicated by social and family needs, which are difficult to change.
It is true, however, that we are using less energy – the Office of National Statistics reports that domestic gas and electricity consumption in the UK fell by nearly 25% between 2005 and 2011. This is most likely due to a combination of intense economic pressures engendered by the recession, together with better understanding of the need to “go green”.
We know that the Coalition is promoting the installation of smart meters across the UK and that by 2020, more than 26 million British homes will have their traditional electricity and gas meters replaced by digital devices to monitor their usage. But some commentators fear that the networked smart meter poses potential security issues, they worry about effects on health and also that the devices give utility companies much more power to curtail or cut supply.
And Wired magazine suggests: “It’s still yet to be seen whether the amounts saved by homeowners will justify a £11 billion investment in smart meter technology and the accompanying data costs.”
But something radical has to be done to keep the lights (and heat), despite the failure of the Green Deal to galvanise national energy-saving and carbon-cutting activity. Matthew Aylott, from the UK Energy Research Centre, advises a “whole systems approach” is needed for the UK’s energy system, where policies aimed at both demand and supply work together.
He says in Business Green: “The Electricity Market Reform needs to make Britain an attractive proposition for investors and needs to do so quickly. And as UKERC has argued previously, the Electricity Market Reform needs to take demand response and reduction seriously. Ultimately the capacity crunch won’t cause blackouts; only inaction will.”
That’s why we have argued consistently that a national programme which promotes the adoption of simple, cost-effective energy and water saving devices in homes and businesses can deliver valuable, on-going savings – and help to keep the lights on when we meet the challenge of the capacity crunch in 2015.
That is the year when, as Matthew Aylott advises, some of Britain’s largest baseload power stations will stop operating due to European emissions regulations, fuelling concerns that the UK could face blackouts. Ofgem estimates that spare electricity generating capacity could fall from more than 10% now to as little as 1.5% in the winter of 2015/16 and the risk of disconnections could almost quadruple.
We all need to be smart and act now so if you want to cut your water and energy bills, call us on 0333 123 5464 to discuss how best to do that or you can write to us to start the money-saving, carbon-cutting conversation.