The UK Government recently advocated for all homes in the UK to operate smart energy meters but what will this mean for everyday energy consumers?

In the future most households in the UK can expect to be offered a new option for managing their energy usage in the home. The Smart Meter system (seen in the picture below) is set to be a new trend in utility supply with the UK Government recently advocating their target for every household to have one installed by 2020 [1]. For customers who are sick of estimated bills inspired by vague meter readings once a year, this should come as good news. Finally it would appear that we are embarking upon a new era of energy supply, one in which consumers may really take control of how they run their energy intensive dwellings.

A few days ago a ring at the door presenting me with a parcel, meticulously wrapped and branded in garish red I was told I had received my free home energy monitor from my utilities supplier Npower. The principle is simple, attach a sensor to the cable exiting your electricity meter and a remote monitor tells you how much electricity you are using. As I turn to the screen at a push of a button I can see how much I am consuming (both in cost and Kilowatts) and how that translates into KG of Carbon an hour. This is only a monitor and communication is not two way as with fully installed Smart Meters. With Smart technology the provider takes readings a few times a day from your monitor and charges in accordance with actual usage of energy. Looking at the monitors screen in my badly insulated and hugely inefficient student home I am shocked as my history tells me I have already used £1.18 and emitted 5.29kg CO₂ worth of electricity today (the time is only 12.20pm). Of course here the Smart Meter has done its job, as we speak I am already looking around the room to see what appliances and lights I can switch off, reducing the gage on the monitor that looks similar to your average car speedo.

According to an interview with The Guardian, First:Utility (the first company to offer a full smart meter energy plan in the UK) ‘bill shock’ is the first reaction of customers. As individuals see just how much energy they are using on a chilly winters day, they may realise that their estimated billing was actually costing less than actual usage [3]. Smart Meters look set to benefit consumers who readily use the information provided, directly being able to see how much turning an appliance off will save you in real time should mean a more efficient household? Indeed Smart Meters could define a trend of more responsible energy consumers, ones that are priced for the environmental externalities of over consumption.

On closer inspection however it would appear that the Smart Meter system is far from meeting its 2020 distribution target. A quick look at the reviews section of moneysupermarket.com shows a bleak picture for First:Utility, initial and only supplier of Smart Energy tariffs in the UK. With an average customer review of just 4/10 complaints include difficulties with processing smart readings and poor customer service [4]. Indeed in theory the Smart Meter system is brilliant however may not hold up in practice, at least not yet. If you have not recieved a smart meter through your energy company then why not consider biting the bullet and purchasing one yourself, we have a great range here at ESW. The initial cost will no doubt be covered by savings in your energy bills once you have a greater understanding of how much energy you are consuming.

The Department for Energy and Climate Change (DECC) state that the distribution of Smart Meters will entail a replacement of some 50 million redundant meters requiring visits to over 25 million UK homes [5]. In this light it must be questioned just how viable a complete overhaul of our current utility provision is by 2020. Despite this it is argued by the DECC that transitions to a low carbon economy will require major changes to the way we supply and use energy. Furthermore it is proposed that a ‘Smart Energy System’ will smooth demand, making the energy system more efficient and ready to take on sustainable technologies such as renewables [1]. Eventually it is proposed that energy companies will be able to switch off consumers appliances remotely, thereby reducing the burden on an electricity system in demand [6]. With energy sources such as wind and solar that produce energy in uneven bursts throughout the day depending on weather conditions, this technology is seen as paramount. A smart electricity grid will also allow for producers of their own energy (such as wind and solar power) to sell any surplus back to the grid rewarding their good environmental behaviour. In this light it would appear that a smart electricity grid really will reward good environmental citizens whilst placing restrictions on the biggest polluters.

Overall it would appear that a revamped energy system, one in which provision and demand are managed more effectively will be paramount to achieving a sustainable energy future. Indeed Smart Meters do provide a brilliant opportunity, presenting real time information on energy used and where savings can be made. For example businesses with multiple locations may use the Smart Meter system to accurately monitor energy usage and costs in a reliable way. Whilst the Smart Meter system may not be quite ready to roll out in the UK yet, with the only supplier gaining much bad press it would appear that the paths are defined. In the near future consumers can expect to be presented with new flexible energy tariffs that use Smart Meters for implementation. Indeed the path to a decentralised energy system in which the consumer may really define and take control of home energy usage may be nearer than you think.

[1] DECC (2009a) Smarter Grids: The Opportunity. December 2009. Available From: http://www.decc.gov.uk

[2] http://www.scientificamerican.com/article.cfm?id=virginia-smart-meters-power-grid

[3] Bachelor, L. (2010) Will Smart Meters Help Reduce Energy Bills? The Guardian. March 8th, 2010

[4] moneysupermarket.com (2010) First:Utility Customer Reviews. [Accessed: 24/5/2010].

[5] DECC (2009b) Energy Metering: A Consultation on Smart Metering for Energy and Gas. May 2009. Available From: http://www.decc.gov.uk

[6] Jameson, A. (2010) British Gas Jumps the Gun With Smart Meters for a Million Families. The Times. March 29th, 2010.