E&T looks at the privacy concerns from consumers that energy companies will have to tackle to ensure a smooth rollout of the technology.
In George Orwell's 'Nineteen Eighty-Four', the two-way television set in Winston Smith's apartment could never be turned off. Everyone in Oceania had one in their apartment - mandated and installed by the State. Since the novel was first published, people have been vigilant of any increased surveillance by their governments.
Often this vigilance refers to the increased use of CCTV and the capture, storage and use of personal data. This also includes any regulation or legislation that impinges on our civil rights to control how our own information is being used.
But could a new front soon be opening up in the war of information which is controlled not just by our own governments, but by private companies.
Companies such as Google and Facebook have been in the firing line of late, but soon consumers may have similar concerns over personal information held by their utility companies which could dwarf even the data held by search engines and social networking sites.
We are talking about smart meters and the granular information that they will be able to harvest from us while we go about our daily lives. Think what you do when you get home from work. You may, for instance, get a beer from the fridge, heat up a ready-meal in the microwave and relax in front of the television. What does that say about you? Who would that information be valuable to?
A smart meter is an advanced meter (typically an electrical meter) that identifies consumption in more detail than a conventional meter and communicates that information over a wide area network back to the utility company.
The first ones were only introduced in the UK in September 2008 by electricity supplier First Utility for their customers based in the East and West Midlands. But in December 2009, the Department of Energy and Climate Change announced its intention to have smart meters in all homes by 2020. The new coalition government is likely to continue this policy as it has been mandated by a European Union directive in 2006.
Thus smart meter deployment is at various stages in Europe and the rest of the developed world as a result of environmental concerns. However, privacy issues have already halted plans to deploy smart meters en masse in the Netherlands.
The Dutch feared that data on energy consumption could be misused by criminals, police or insurance companies and, because of a consumer backlash championed by consumer advocacy groups, Holland has curtailed the compulsory introduction of the meters.
Dutch consumer and privacy organisations were concerned that information relayed as frequently as every 15 minutes could allow employees of utility companies to see when properties were empty or when householders had bought expensive new gadgets and how and when they were used.
The u-turn by the Dutch government represented a significant victory for privacy campaigners in the Netherlands and demonstrated that if enough noise is made about a civil liberties issue, politicians will fold rather than face an electoral backlash.
The privacy concerns were also highlighted earlier this year by Datamonitor, a market research and analysis company. The report warned that governments across western Europe are not being explicit enough in their aims for the rollout and that gaps are appearing in the delivery of potential benefits as a result. It also warned that communication with consumers must be co-ordinated early and made regular to ensure the public stays on board with the idea of smart metering.
'This is not just a gas and electricity engineering project - it is a telecommunications and IT project to rival the creation of the Internet,' claims Alex Desbarres, senior renewables analyst at Datamonitor and co-author of the report.
'Effectively what we are talking about is the construction of a machine-to-machine communications infrastructure to rival the online facilities that we have come to enjoy.'
In the US there has also been criticism, but this has mainly been centred on security issues. Much of the rollout has been funded by stimulus money provided by the Federal Government. Thus, utilities are rapidly deploying thousands of smart meters that many experts say could easily be hacked.
A security company has found holes in two-way meters that could allow a person with a laptop to tap into the communications between people's homes and utility companies. InGuardians was hired by three utility companies to test the vulnerability of smart meters from five manufacturers and the systems used to manage them.
The researchers discovered a number of potential vulnerabilities that could lead a criminal remotely turning someone's power on or off, for instance.
The communications standard used by smart meters in particular was an area that was a cause for concern, says Joshua Wright, a senior security analyst with InGuardians. If criminals are able to tap into the network, they could potentially doctor another person's bills or even stage bigger attacks on the grid, the report claims.
Companies such as Cambridge Consultants who are designing smart meters, point out that smart-grid technologies need to have security designed into them from ground up and this would have to include security on the device itself. To mitigate these threats, vendors need to use strong authentication in secure chips and utilities need to do more testing of the systems, says Alistair Morfey, senior consultant.
Google has now branched out into home-related services via your Internet connection, of course. Google PowerMeter is an energy-monitoring tool that can be downloaded from the Google website which will allow you to monitor and control your energy usage. It allows consumers to examine energy use in their home, especially at times when they are away, via access from anywhere online.
Once you have downloaded and installed Google PowerMeter, you will find that it can kick back to you any number of interesting facts, which can help you to determine your energy usage and how to increase your savings through suggestions. One of the first things you will see is a graphical representation of the power your home is consuming by day, week or month. With that kind of information, you can see at what points your using the most and budget accordingly.
But does Google have a commercial agenda here? The widget was developed by Google.org, the charitable arm of the search engine company. However, it is firmly integrated into the iGoogle infrastructure and all users will have to sign up to a Google account if they do not have one already.
A Google insider told E&T that the company does not currently use PowerMeter data for advertising purposes, but could not preclude the possibility that Google would not turn on this feature in the future.
The granular nature of the information that can be gathered is amazing. Obviously, this is useful for customers to be able to monitor energy that is used for cutting their own energy costs. Google is partnering with First Utility and Alertme.com, who provide a gadget that you can attach to any device in your home to provide detailed information about the energy that you are consuming.
There is no evidence of sinister intent by governments, power companies or multibillion dollar Internet services companies. But a dialogue with consumers may be preferable to sweeping consumer concerns under the carpet.