Smart Metering - the State of Play

Landis+GyrAlthough smart metering is very much seen as a 21st Century issue, its origins stretch as far back as the 1980s. Even then, the industry could see the benefits that collecting information from every point in the domestic energy chain provided.

The deregulation of the market and break up of the electricity and gas utilities in the 1990s seemed to have put paid to the idea, however. That is until a mention by Gordon Brown, then Chancellor, in his 2006 budget, proposing metering as an easy win in the war against climate change. Suddenly smart metering, and with it the smart grid, was back on the agenda.

In the three years since we have seen real Governmental focus on the question of how to make nationwide deployment a reality, with consultations run by Ofgem, DEFRA, BERR and DECC, as well as the Energy Demand Research Project (EDRP) which aims to identify the best methods of driving consumer reductions in usage.

Separately the European Commission has also made progress through its 20-20-20 targets (increasing energy efficiency and share of renewables by 20% and reducing greenhouse gas emissions by 20% inside the next 11 years), as well as with the passage of two key pieces of legislation; the EU Energy Package and the Energy Efficiency of Buildings Directive.

The conclusion of all these efforts from a UK perspective came first in November ‘08’, when Lord Hunt reiterated in Parliament the Government’s intention to install a smart meter in every home by 2020, and then in April ‘09’ with DECC’s announcement of a consultation to consider its preferred pathway for reaching the target.

Mass market trials

Of course we are still some way from actually seeing smart meters in every home. The Government consultation will finish towards the end of 2009 and we can then expect an announcement on what model the national roll-out will use.

What we urgently need in the meantime however, is to start large-scale volume trials. Although the Government does hold some of the information that this will provide from its EDRP trials (as well as from individual private sector projects like British Gas’ Green Streets competition), it does not have any data on mass market behaviour.

Equally, it is important that we begin the trials soon. The Government has said that it expects to begin deployment in 2012, which gives the industry an extremely limited period to work out how to transform an abstract model into national reality, particularly given the time it will take to deploy, complete and analyse volume trials. If we begin soon, it should be possible to agree a realistic schedule towards the 2012 and 2020 deadlines.

One year from now

Looking into the crystal ball it’s hard to know where the industry will be in a year’s time, but at the very least we hope that collectively we will have achieved three things:
  1. That the feedback from the volume trials will give us enough information to reach a consensus on the best model for both the UK and European markets, and that we will have started to resolve the question of how to achieve it.
  2. That we will have launched and forged ahead with a meaningful ‘pay as you go’ scheme. We need information about customers’ preferred payment options so that we can set up a system that allows everyone to take advantage of the best rates. In our smart energy future this may well be a ‘pay before you use’ tariff.
  3. That we will have agreed a set of best-practice standards recognised across the entire industry. These will act as the foundation upon which DECC and the energy providers can base the entire system on and will in effect be the gateway to many of the UK’s future energy and carbon reduction aspirations.
Since the Government’s announcement in April there has been huge amounts of speculation as to what smart meters and a smart grid will achieve - the potential of the technology is literally limitless. Our current energy infrastructure has been in use for over 60 years but with such potential we hope that our future, smart, system will be in place for far longer.

We will only have one opportunity to make this work, so not only do we need to ensure that we need to implement a system quickly in order to meet the spiralling challenge of climate change, we absolutely have to be sure that we find the right solution so that we are able to unlock all smart metering’s potential in the future.

Dave Robinson, Market Development Manager,
Landis+Gyr,
Orion Business Park,
Bird Hall Lane,
Stockport,
Cheshire,
SK3 0RT.
Web: www.landisgyr.com