Smart Meters

The Smart Meter roll-out is well underway and set for completion in 2024, 4 years later than the originally planned date. The motivation ultimately comes from meeting green energy targets, with Ofgem providing the necessary pressure to keep energy suppliers accountable.

Since the start of the nationwide project, 12.8 million smart meters have made it into operation, installed by over 50 energy suppliers.

What They Do And Why
Smart meters are installed at the consumer unit to constantly measure the energy being consumed minute by minute. They communicate this information back to energy suppliers through telecommunication and to owners through a readout device (as shown above).

The functionality of the readout device varies by manufacturer, but they all share the same underlying principle. They provide immediate, real-time data about the energy being consumed. Just put the kettle on? The device will show you your energy consumption skyrocketing. Some even automatically calculate this into cost per minute or hour, and allow the user to check back through previous days to see fluctuations in energy consumption. With access to this highly precise information in real time, the idea is that energy will cease to be an invisible process in the home. The effects of turning appliances on and off will be immediately apparent, revealing unnecessary energy usage.

The information sent back to energy suppliers allows highly accurate billing and reduced labour costs. Combined, this results in overall reduced cost and an end to estimated billing. It also enables more detailed energy cost reports from your supplier.

The technology was originally developed in 1972, borrowing its underlying mechanics from Caller ID. It was first patented just 2 years later in 1974, and first put into active use in 1977. With 4 decades of refinement and consideration, their value in our energy-conscious civilisation has become clear.

Worries, Woes, and Myths Demystified
As with all new technologies and initiatives, Smart Meters have since collected a veil of myth and mystery around them. How much validity is there to these scary monsters?

• Data Harvesting
In our current period of history – the Information Age – data is a commodity. In this case, there is some slight concern about energy suppliers collecting energy usage data for ulterior usage. Smart meters currently can’t measure appliance-specific data (which is in fact a common criticism against smart meters for not doing enough, rather than doing too much). The information gathered will certainly be used to improve existing infrastructure and customer support, and is an integral part to the project overall. On an individual level, however, this won’t impact anyone’s lives beyond a reduced energy bill.

• Cost Increases
Installing new technology throughout the country doesn’t come free – and it doesn’t come cheap. The project in total will cost somewhere in the order of billions of pounds. To offset this initial cost, it is true that energy prices have risen. Some opponents to Smart Meters understandably cite this as cause for concern. However, a study showed that consumption with a Smart Meter installed fell by around 3-5% on average, offsetting the price rise almost immediately. And energy prices between suppliers remains competitive; when the rollout is complete, these prices will fall back down relatively, and likely even further below as their operational costs fall.

The Short Evolution
Before October 2018, SMETS1 smart meters were the device of choice. The original intention for these devices was to be the first wave of the Smart Meter roll-out. In the rush to get the roll-out underway, however, a huge number of these were hurriedly installed. Relatively speaking, they were primitive. Their main issue being incompatibility between energy suppliers, effectively binding consumers to their supplier unless a replacement of the meter was undertaken.

Around 5-10 million of them are still in use today – a point of criticism among even proponents of the initiative. Many of these will need to be replaced entirely with SMETS2 meters, effectively rendering the first stages of the process fruitless. This initial teething process wasn’t entirely without merit, however. While the meters themselves will need to be upgraded, the real benefit of the SMETS1 was getting a firm foothold in how best to complete the project in its entirety.

Some comparable criticism around SMETS2 still exists. A 2011 analysis of Smart Meters claimed that their greatest benefit wasn’t yet considered. Essentially that they could access more detailed analytics for customers, more precisely reporting the consumption of appliances themselves. It’s likely that later iterations will include this in their functionality, particularly as the Internet of Things makes this kind of data more accessible.

Energy Consumption Reduction
As covered earlier, the first impact is an overall and temporary rise in energy prices, easily offset by the benefits Smart Meters provide. But what about the meter itself?

It might almost seem counter-productive to introduce new electronic devices to reduce energy consumption – akin to running a bath to see how much water comes out. Estimates for smart meter consumption average around £2 per year for both the meter itself and the readout device. This is far less than the energy that can be saved as a result to the information it provides.

Dr Jake’s Very British Reviews reported that through his smart meter, he discovered that his freezer was costing him an enormous amount of energy – well over 4 times a modern appliance would. He bought a brand new freezer with all the bells and whistles which will pay itself off in less than 2 years. This serves as a prime example of what Smart Meters offer consumers: a real perception of how electricity is being used in the home, and an opportunity to adjust their lives in all-round beneficial ways.

According to the 2018 Smart Meter Progress Report, there was already a £300 million bill reduction, projected to rise up to £1.2 billion a year by 2030 (around £47 per household). More than costs themselves, Smart Meters are a significant step towards inviting consumers into the conversation around energy consumption.