Smart meters get a bad press because they don’t save much money by themselves. However they are a vital bit of technology that enables a whole raft of other savings possibilities.
Smart meters conform to open standards that can interface to 3rd party equipment so you are not locked in to one supplier
A normal meter measures your energy consumption and keeps track of the total you have used. Period. A smart meter does quite a bit more than this.
- It remembers our energy use in half-hour chunks - so it knows how much you have used at different times of the day and night (maybe your teenage kids are using the Play Station at 3 in the morning?)
- It uses an encrypted wireless network(ZigBee not WiFi) to communicate with other equipment in your home, such as a real time in-house-display, your home computer, or other intelligent appliances. The ZigBee network conforms to an open standard so you can use 3rd party equipment, not just from your energy supplier.
- It knows your energy tariff and tells you how much your energy use is costing you accurately. It understands variable tariffs with different rates at different times of the day.
- When the network is fully operational (from August 2017) it will upload your energy use data to a national hub (the DCC) from where your energy supplier and other companies that need to can access it.
Most of the smart meters that we have seen so far do not work quite like this and are not compatible from one supplier to another. This means if you switch suppliers your smart meter reverts to being dumb. These old meters conform to the interim standard SMETS1. The real benefits come with the full standard SMETS2 which defines the protocols for the home area network and communication with the DCC.
The only way this smartness saves anyone any money directly is that the electricity suppliers don't have to pay a man to come round and read your meter any more. However, they enable lots of other potentially useful stuff.
Our electricity would cost less if we reduced the size of the peak demand
During the winter of 2015, the typical weekday load ranged from 27 GW to 49 GW (see chart) and sometimes up to 52 GW. The second chart shows energy demand over the whole year. The absolute maximum was 52.5 GW but it exceeded 42 GW only 10% of the time and was above 47 GW only 2.3% of the time. Ignoring for the moment the additional problem of intermittent renewables, this means we need 5 GW of plant capacity that is used for less than 8 days in the year. The rest of the time it is not used, but it still has to be constructed and maintained and some of the time it has to be on standby. There is no way that this plant can pay for itself in energy supplied so we pay for it through the capacity market or as short term operating reserve. This is expensive.
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If we flatten out demand, for example by shifting demand from peak times to other times, then we need less plant that is only used occasionally. However, for most of us there is no incentive to do this because we pay the same price for our electricity all the time.
Smart meters will make it practical to offer time of use tariffs to encourage shifting load away from the peaks.
The National Grid currently offers large consumers payment to reduce demand on request (This is called Demand Side Reduction). However, to get in on this sort of deal you have to normally consume at least 3 MW – about 6000 times the average home. If instead we were encouraged by variable time of use tariffs – with cheaper power at times of low demand – we could all take advantage. The British Gas offer is only the first of these. They are currently offering you free electricity between 9 and 5pm on either Saturdays or Sundays, whichever you prefer.
Some people already have a time of use tariff - Economy 7. This is useful if you have night storage heating because it gives you seven hours of cheap electricity overnight. The trouble is, getting onto this tariff means installing a special meter and takes weeks to arrange, plus a visit from an engineer who will turn your power off for a while. With smart meters it is possible for your supplier to switch your tariffs quickly without an engineer visit and with no supply interruption. And, if you don’t like it after all you will be able to switch back again just as easily.
Accurate information makes it easier to make savings, if you want to take the trouble.
There is evidence that accurate real time information on electricity consumption helps consumers reduce their overall usage. Smart meters should come with an in-house display unit that tells you what you are using, minute by minute. This information is accurate, unlike most clip-on energy monitors (see Clip-on (current clamp) electricity monitors are not accurate)
People with good energy monitoring save on average 3% [4]. In practice many people save nothing because they don’t give it any attention - others who are genuinely motivated save a lot more.
Smart meter data allows you to estimate savings from PV and battery storage
Smart meters log your energy use every half hour and this data is valuable. For example, with this level of detail you can get a reasonably accurate idea of how much of your own power you could use if you installed PV panels, and how much this would improve with battery storage. (See What will PV panels do to your school's energy consumption and What you could save with a battery to go with your PV panels)
No more shocks from fixing up poorly estimated bills
There are other benefits to consumers of smart meters too. If you have never had the shock of a large bill to fix up accumulated errors from estimated readings you may not appreciate the benefit of accurate bills all the time.
Smart meters for gas and water too – detect water leaks and enable other savings
You can have smart meters for gas as well as electricity. In some areas, such as Thames, you can have smart water meters too [4]. Smart meters for water will make it easy to spot leaks quickly, and you will also be able to work out how much you use for baths, showers, washing machine and so on (see also How much does your bath or shower cost).
Smart meters are unlikely to be quite as revolutionary as the internet but it will take time to fully appreciate their benefits
Smart meters do not bring huge benefits by themselves but they are enable new products that are beneficial. When I was first introduced to the internet I thought it was just a geek thing and not very useful. That was before Wikipedia, online newspapers and online marketing. Now I wonder how we ever managed without. Of course smart meters are unlikely to be quite as ground breaking as the internet – but we are unlikely to understand their potential until we have had them for a while. Let’s not abandon them before we get started.
[1] UK's climate change dept abolished, but 'smart meters and all our policies strong as ever' ( The Register) 18th July 2016
[2] British Gas offers free electricity at weekends (BBC)
[3] Data Explorer (National Grid)
[4] What the biggest ever UK trial tells us about smart meters (Green Alliance)
[5] Smart Metering (Thames Water)
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