Article - Issue 46, March 2011

Smart Meters

John Scott

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The Ontario Energy Board had a target to deploy smart meters to all homes and small businesses (small ‘general service’ customers under 50 kW demand) throughout the province by the end of 2010. In this picture a consumer views their online usage and utility screen connected to an electric smart meter. This consumer is choosing the temperature for his house and which lights should be on or off at different times of the day © AP Photo/The Canadian Press, JP Moczulski

The Ontario Energy Board had a target to deploy smart meters to all homes and small businesses (small ‘general service’ customers under 50 kW demand) throughout the province by the end of 2010. In this picture a consumer views their online usage and utility screen connected to an electric smart meter. This consumer is choosing the temperature for his house and which lights should be on or off at different times of the day © AP Photo/The Canadian Press, JP Moczulski

The installation of smart meters in every home in the UK is coming closer to reality. The government is reviewing its original target for completion by 2020 and may bring it forward. The technical, logistical, commercial and legal challenges are being addressed and roll-out could commence as soon as 2012. John Scott of KEMA Consulting outlines what needs to be done to enable this to happen.

In May 2007, the UK government’s white paper Meeting the Energy Challenge started a commitment to replace nearly 50 million gas and electricity meters in 27 million homes and two million non-domestic premises. The roll-out, scheduled from 2012 with a target for completion by 2020, will allow the UK to meet EU targets for 80% of households to have smart meters by 2020.

This is seen as a key component of wider policies for the low-carbon economy, energy efficiency, modernising the electricity grid and providing consumers with information and choice over energy. Under the plans, each home will have new ‘smart’ meters for gas and electricity: in some European countries there would also be meters for water and heat.

A smart meter is essentially a meter with communications technology. Smart meters can provide continuous two-way communication between the energy supplier and the energy user, enabling both to make informed decisions about supply and usage. Providing up-to-date information on energy consumption would enable more sophisticated pricing mechanisms, time-based tariffs and peak load management.

Equipping all consumers with smart meters is an ambitious project: preparations are now at an advanced stage, with the government and the energy regulator, Ofgem, finalising details such as the specifications of the meters. Once these details have been established, there will need to be a significant programme of manufacturing and installation to replace 25 million electricity meters and 22 million gas meters. Over a five-year period this would equate to nearly 200,000 meters being installed per week.

Smart meters will be an important step towards the development of a ‘smart grid’, delivering improved network efficiency and responsiveness to changes in demand, along with the ability to balance energy from fluctuating renewable sources, such as wind farms. Definitions vary, but the European Technology Platform defines smart grids as: “electricity networks that can intelligently integrate the behaviour and actions of all users connected to it - generators, consumers and those that do both – in order to efficiently deliver sustainable, economic and secure electricity supplies”.

Relevance to consumers

Today the only information energy consumers receive regularly is via a bill that may arrive months after they have consumed the energy: even then it may be an estimate. Smart meters can provide consumers with real-time information about energy use, enabling them to monitor and manage their consumption.

The ability to see how household power demand varies as users turn devices on and off will help consumers to reduce their electricity consumption. This information can be broken down by time of day, so the user can spot anomalies when consumption is higher than expected. Similar usage data can be generated for gas consumption, potentially alerting the user to an inefficient boiler or heating setting (see panel titled New Features).

Trials indicate possible reductions of 5-10% in home energy use. Government estimates suggest that smart meters could save over 30 million tonnes of CO2emissions over a 20-year period as people become more aware of their energy use. Households account for 26% of the UK’s energy use and CO2emissions, with an estimated £900 million of electricity wasted each year simply as a result of appliances being left on standby. Smart meters would enable consumers to pin down such wastage.

The technology is intended to help consumers take advantage of many of the developments of the energy market of recent years, such as the wide range of alternative suppliers and increasing number of suppliers. Smart meters mean individual consumers can compare and contrast what is on offer more simply, as well as doing ‘housekeeping’ tasks such as changing their payment methods.

Smart meters are also a key enabling technology in developing and delivering home automation. The idea is that consumers’ own smart appliances will communicate with the smart meter and run more economically when prices are advantageous.

For example, in future a smart dishwasher might offer the choice of ‘run now’ (with the consequence of paying premium energy prices), or ‘run before the morning’ (where the automation will access the lowest price period overnight). This type of approach has attractions where energy use can be time-shifted and would be particularly relevant for electric vehicle charging.

Likely scenario

In the UK energy suppliers, rather than network companies, will be responsible for the roll-out of the meters at a cost of about £300 per household. The suppliers will recoup the cost from customers through higher bills or upfront fees. Competition between suppliers is expected to ensure that only some of the expense is passed on to the consumer. The companies stand to make big cost savings themselves, with the need for teams of meter readers becoming a thing of the past and many fewer disputes over estimated bills.

Smart meters enable more detailed information about individual and local energy habits to be gathered. They offer the potential for true interaction between suppliers, network companies and customers. Energy companies would be able to tailor services to meet individual needs and network companies could aggregate demand response services to manage network flows and achieve national balancing more cost-effectively.

The national balancing of supply and demand could be assisted by aggregated demand response, perhaps increasing demand to make use of surplus clean energy if, for example, the wind is blowing more than expected for a period during the day.

Smart meters and smart grids can be key enablers for connecting more low-carbon generation, including micro-generation at household level, to the distribution system. They will also enable cost effective grid balancing as more variable generation comes onto the system. By enabling better management of supply and demand, smart meters can also reduce the investment needed in network and generating plants to meet new demands for electric vehicles and heat pumps. Finally, smart meters will provide opportunities for engaging with consumers to create greater energy awareness, energy efficiency, and participation in demand response services.

Technology developments

It is evident that the smart meter project is about a lot more than ‘boxes on the wall’. It will need comprehensive national data communications, data storage and processing, and design at every level to ensure interoperability of different products, data protection, and cyber security. Software will also be an important ingredient in the technology of smart metering.

This is a rapidly evolving field. Thus there is a need for ‘future-proofing’ to meet developments such as enhancements to performance specifications or for cyber security, or to accommodate new developments such as local energy storage.

While the benefits may be easy to spot, the complexities are also becoming apparent. The challenges span the whole energy supply chain, with costs and benefits falling on independent parties, and it all has to be implemented within the framework of a privatised sector that is no longer centrally planned. Effective functionality will require a systems approach to ensure the seamless operation of sensors, data communications, data management, home appliances, electric vehicles, and commercial aggregation services – whereby smaller demand response or power providers may be aggregated across multiple sites.

Concerns for data privacy and cyber security need be addressed. Smart meters can be used to assign a power limit to a property, or to turn power on and off remotely, to ensure safe management of empty premises, for instance. Some of these elements will need regulatory review, in the same way that there are safeguards to ensure that cutting off energy supplies to consumers is a last resort.

There are also technical challenges: failure to achieve open systems resulting in a lock-in to particular manufacturers; smart meters and communications that do not in reality provide the platform for smart grids; and technology interfaces that act as a barrier to groups such as the elderly, the disabled, as well as busy people, and result in them being denied access to the best commercial deals.

Addressing these issues will take the traditional energy sector into uncharted territory, requiring new skills, techniques and relationships. This interdisciplinary challenge must combine skills from science, engineering, sociology, product design, and human/computer interfacing (see Smart Meter Set-Up).

Public engagement

The government has presented an economic case for smart meters and smart grids (see Economic Case). However, there is more to consider than a simple business case. Many people, perhaps most, neither understand nor are interested in how energy reaches them. While energy supply is crucial to society, and interruption brings immediate disruption, users take it for granted. Consequently the developments led by smart metering are not feasible if consumers reject the idea.

While this does not mean that the public have to become enthusiasts, there needs to be a willingness to bother, a curiosity to find out more, and appreciation of the benefits of home automation and smart appliances. The media, wider government and schools will be key influencers, as will be engineers and scientists who understand the issues and are willing to communicate their knowledge.

Smart metering deployment will benefit from support from both within the project and without. It will need intellectual fire power, excellent R&D in technical, commercial and social aspects. Considerable gain could come from the active support of individuals, institutions and organisations. Smart metering could be a helpful way to start to raise public awareness of the need to move to a low-carbon energy system.

The challenges are not insignificant, but the rewards for success are high. Smart grids, supported by smart meters, represent the biggest changes in energy management in the UK since the national grid system was introduced. The tasks are complex and multidisciplinary, but the benefits of securing cleaner energy supplies at lowest cost are potentially far reaching. Indeed, smart meters underpin the success of the government’s low-carbon agenda.

Understandably, there are sceptics, and there are those who, for a variety of reasons, resist change. The move to smart meters and smart grids is, however, evident at an international level. Demonstration and implementation are being pursued actively across the US, China, South Korea and Europe – Italy has already installed more than 30 million smart meters, for example. Early experience has been positive but it also reinforces the importance of excellent project management – and of winning the hearts and minds of customers and the wider public.

This is arguably a landmark development, a first step towards a new energy system and one in which consumers will be active participants for the first time. Support from the engineering and science community would be valuable indeed.

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