Utility companies have been trying for years to get consumers to accept smart meters into their homes, but there are still barriers that must be overcome.
According to the latest government position, 30 million homes and small businesses will have smart meters by 2019, enabling all consumers to have access to accurate information and bringing an end to estimated billing. "In less than three years energy suppliers will begin the mass rollout of smart meters and I am determined that consumers are at the heart of this," Energy and Climate Change minister Charles Hendry says. "That is why we are proposing tough guidelines on installation, which will minimise inconvenience and help people to make the most of their smart meters.
"I want to be absolutely clear to consumers that they will be in control of their energy consumption data. So apart from where it is required for billing or other regulated purposes, it will be for consumers to decide who can access their data."
From the outside the programme seems to be riddled with difficult challenges, both within the technology and in the implementation. Standards have yet to be nailed down, and the general public is showing a distinct sense of antipathy towards the devices, perhaps driven by uncertainty over the importance of the programme in the current constrained financial landscape. However, within the energy industry there is little doubt that the smart meter is at the heart of future energy strategy.
"It's a bit like asking: how important is your mobile phone?" Rich Hampshire, smart metering consultant at Logica says. "Just as today it's not about your handset, but about the services it provides you with access to, so too with smart meters: it's not about the smart meter itself, but the information and communication infrastructure created through their deployment, and the services energy consumers will receive across it."
The information available to consumers will enable them to take control of their energy bills in a new way. Smart meters will also open the door for consumers to be offered a whole range of services that will allow them to change their relationship with energy and satisfy their needs sustainably. "The overall bill will be determined as much by when people use energy as how much they use - if they are able to control when they use, the savings can be big," Hampshire says.
For utilities, we need to split them into the distribution system operators and the energy suppliers. For the wires businesses, it will be about leveraging the information to design, build and operate their networks more efficiently, addressing the challenges created through the adoption of low-carbon technologies in people's homes as well as increasing amounts of renewable generation on the high voltage side of the transformer.
For the suppliers, at one level you could argue it's about operational efficiency and eliminating estimated bills. "But that would be missing the bigger opportunity - to fundamentally change their relationship with their customers," Hampshire adds. "To see them as people rather than just a meter reading and change how they operate their businesses based on what they will be able to offer to their consumers."
Standards and regulations
With the programme roll-out stage looming, the need for firm specifications and regulations is paramount. "There was a concern that the technical spec for the smart meters had a blind spot with regards to facilitating smart grids," John Scott, member of the IET Energy Policy Panel and director of Chiltern Power, says. "The IET has been active in providing the case to expand the technical spec of the smart meters and the last position that we have seen is that they have responded. We are hoping that the final specification will meet the requirements for smart grids as well as just the retail side."
Nick Collier, head of science and technology at Sagentia, believes that the biggest barrier is immature standards. "What protocols should manufacturers use?" he says. "How do they ensure both interoperability and meters that function in'all installation environments not just in the UK? From the development side there is also the challenge of keeping the meters low-cost.
"While the roll-out is being enforced on consumers, they still need to see tangible benefits. Some are concerned about radio transmission, data accuracy and privacy. Also, they may not be willing to allow utility companies to switch appliances on and off to load balance and operate more profitably.
"Solutions might be sub-optimal; however, we still feel these meters will represent a significant improvement on the current situation. The roll-out will drive evolution of a common standard that won't be achieved by companies acting independently.
"At the moment many of the standards are still in a state of flux and under review by the Department of Energy and Climate Change," Collier adds. "In an ideal world the metering companies would wait for these standards to be ratified before developing optimised products, but the rush to roll out means that the first smart meters must be sufficiently flexible. This means that these first smart meters will not be cost optimised."
The question of security is something that the IET is well aware of. Scott says: "The IET had made a point of how important it is to design in the security protection from the start because it's not often effective to try and patch up complex IT systems afterwards.
"Data security is complex because that's about data management. There is a huge amount of data that many parties wish to have access to to take advantage of the data and take those benefits back to customers through new services or opportunities."
Scott argues that the degree of amortisation of this data so that you can't individually identify customers helps on this issue, and for some users that's fine. So if you wanted to use smart-meter data to track the changes in winter demands in a particular area or city that would work. "But there are applications that need individual household data to do sensible things," he adds. "For example, with electric vehicles coming on charge, we could start finding the voltage being pulled down and eventually causing a problem. The smart meter can be a voltage sensor. But it's no good somehow averaging all that information out for an area or across a postcode; it clearly needs to be at a point or house where a voltage is being measured if it's going to be useful."
Technology and infrastructure
Most experts believe that the underlying metering and communications technology is adequate and available. From an operating perspective these meters are a significant improvement on the established solution of dumb registers.
However, the question is: can this infrastructure be put in place fast enough to meet with the aggressive roll-out schedules? "It is expected that every home in the UK will have a separate smart meter for electricity, gas and water in the next five years, which equates to a need to install around 20,000 new meters per day per utility," Collier says. "The development of the low data-rate wireless infrastructure, which is an inherent part of this roll out, offers an opportunity for exciting new services. In the UK and most of the world this infrastructure will be owned by gas, water, heat and electricity companies who do not currently offer data services. However, with this new infrastructure in place we could be using their services to buy eHealth or make financial, text and email transactions in the future.
"Additional services relating to smart metering could mean the analysis of the energy efficiency of our appliances and diagnosis of component wearing issues. This information could then be fed back to the customer. Until the infrastructure is in place, these services will not be developed, but that development would be a natural extension and potential future user benefit."
As for the technology it is a case of taking the best solution currently available, rather than waiting for further breakthroughs. "It's evolving - but that's what technology does," Hampshire adds. "The challenge is to ensure that technology deployed today doesn't end up being stranded - that's about recognising that technology will evolve and to allow the latest tech to be adopted where there is a benefit, but ensuring that backward compatibility is enabled.
"We can't just sit around waiting for the next generation of better technology, because when it arrives, there will be another next generation on the drawing board and in test."
When it comes to the government's role in a successful roll-out, communication holds the key. "The government as well as the project management really needs to be active with its public communication," Scott says. "While smart meters are being rolled out by supply companies, the retailers want to put their own marketing message in. I think it's really important that there's an underlying common message that is communicated with unambiguous shared messages to get the basic platform into place, get the public used to this idea, and get them interested and then we can let the supply companies play in a competitive way." *