New Meters – Not So Smart for Consumers?

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Source: Wikipedia.

Rush for ‘Smart Meters’


Why the rush for so-called ‘smart meters’? I had been slowly writing a blog on this. Too slowly; the Sunday Times has now published an excellent article confirming that the main beneficiary of these meters will be energy suppliers, not energy consumers. Yet consumers will pay for them!

The estimated investment cost of these meters stands at £11 billion. Spending is set to be roughly £220 per meter including administration and installation. The cost for a typical urban dwelling with two meters, one for gas and one for electricity, is therefore £440.

The return to consumers is not high enough to justify the proposed rapid installation rate. The energy saving is usually quoted as £20-25 per year. But there are plenty of other areas in which to spend £440 on energy-saving technologies. If this spending was targeted, the returns would be £75-100 per year or even more.

To bear out more optimistic energy-saving claims than £25/year, a visible display screen is probably needed in the building. This would have an extra cost and an extra electricity consumption.


Covert Motives


DECC and the Big Six energy companies should reveal the covert reasons for imposing ‘smart meters’ on energy consumers. It may not be wholly or even very closely linked to ‘saving energy’.

‘Smart’ electricity meters look like part of the process of a government imposing lifestyle changes on consumers to coincide with its policy of electricity replacing gas heating. See my blog of 12 May 2014. It is about ‘managing’ peoples’ electricity consumption, hour to hour and changing their lifestyles to suit future electricity output.

The government probably realises that if it succeeds in its aim of increasing electricity consumption and moving away from fossil-fuelled generating plant to more nuclear and more renewables, the national grid would become a less stable source of electricity. In effect, it wishes to outsource the resulting imbalances between supply and demand from electricity producers to electricity consumers.

Unlike gas, oil or even hot water, electricity cannot easily be stored even from minute to minute. It must be produced as needed. Gas-fuelled or hydroelectric generating plants can be flexibly turned on and off to meet the changing demand but it is challenging for nuclear, wind or solar generators to meet demand at the times that people actually want to consume electricity. These types of generator would need a lot of help in the future from more responsive generators; e.g., fossil or renewable gas-fired plants, hydro and/or pumped storage.

The government probably envisages that future consumers can be sold extra electricity by cutting the price if demand is low and the system is full of nuclear power stations which have been built and must generate all the time to repay their vast cost. Conversely, consumers can be disconnected or, put more delicately, rationed by price if not enough nuclear, wind or solar power is being generated.

Because piped gas is easily storable, short-term fluctuations in gas consumption do not cause the network operators such great problems as varying electricity consumption causes them. A possible reason why energy companies are so keen on smart gas meters – why would they not be, if the hapless consumers are footing the bill? – is that they can cut off gas consumers more easily for non-payment of bills. Disconnection today needs not only a court order but a physical visit to the meter. This is expensive.


Who Pays?


If, as the Sunday Times notes, energy suppliers are the beneficiary of ‘smart meters’, why do they not fund them? Years ago, fitting meters with a few genuinely useful functions; e.g., remote meter reading or fixed time-of-day or -year electricity tariffs could have been made part of the supplier’s duty when meters are replaced anyway. Replacing meters on this more relaxed timescale would not cost £11 billion.

Energy-efficient consumers with a houseful of A+++ appliances, no electric heating and a consequent electricity bill of only £150-200/year are set to pay as much or more for a smart meter than they will save. They impose no undue peaks on the national grid, given the diversity between peaks in one household and another, giving little benefit to electricity suppliers from installing such a meter except the remote meter reading facility.

If a consumer is in this position, can he/she opt out? Extraordinarily, he or she cannot. From 2015, all consumers must pay an extra £14 per year even if they decline to have a smart meter fitted. The whole exercise seems to be a questionable use of scarce resources and an unwarranted bonanza for energy suppliers [7].






[2] One must ensure that such equipment does not consume too much. Standby power of 5 W would cost £6 per year, negating a quarter of the promised saving. I think that the costs would be substantial. Many dwellings have an electricity meter outside the building or in an outbuilding such as a garage.

[3] The diversified maximum demand from lights and appliances is from 0.75 to 1 kW(e) per dwelling. Peaks for lighting or appliances or central heating pumps in one dwelling do not coincide with peaks in another. Countries without much electric heating have high load factors and relatively little seasonal variation in consumption.

[4] The report LESS IS MORE: Energy Security After Oil, published by the AECB (February 2012) discusses why, with our dependence on electricity for essential services, a stable grid is more important than a smart grid. It outlines a strategy to secure it after fossil fuels have gone, principally by (a) not transferring the heating and transport loads to electricity and (b) ensuring that, as today, the majority of electricity comes from despatchable generating plant.

[5] Virtually all UK installed hydro capacity is in Wales and Scotland. There are few initiatives to fit a significant amount of the remaining UK potential which is limited anyway.

[6] Other types of renewable generating plant such as double basin tidal lagoons or hot dry rock geothermal could possibly produce electricity on demand. But UK activity in such areas is limited.

[7] There are also some data protection concerns. Will OFGEM, the regulator, protect consumers from having their electricity consumption details, which qualify as ‘personal data’, being sold to third parties without their informed consent, despite the wording of the Data Protection Act and the Privacy and Electronic Communications Regulations?