Smart meters enable meter readings to be taken remotely and together with a display device, give householders real time information on their energy.

Energy and Climate Change Secretary Ed Miliband says: “The meters most of us have in our homes were designed for a different age, before climate change. Now we need to get smarter with our energy. … Smart meters will empower all consumers to monitor their own energy use and make reductions in energy consumption and carbon emissions as a result. Smart meters will also mean the end of inaccurate bills and estimated meter readings.”

The project, which affects 26 million homes and “several million” businesses, is estimated to cost £7 billion, according to a BBC report. DECC says the smart meter roll-out could deliver net benefits of between £2.5 billion and £3.6 billion over the next 20 years.

Smart Grid next step?

According to DECC, “smart meters signify the start of a change in our energy habits,” and that “they are a key step towards future Smart Grids”.

Smart Grids would make it easier for renewable generation to feed into the grid, including micro and community level generation and could support the decarbonisation of heat and transport through the greater use of electric and plug-in hybrid vehicles.”

Three smart meter roll-out models:

• Central communications model - where energy suppliers are responsible for the installation and maintenance of the smart meter but the communication to and from the device is coordinated by a third party across the whole of the UK. This is the preferred roll-out option, according to DECC;
• Competitive model - where energy suppliers manage all aspects of smart metering, including installation and communication;
• Fully centralised - where regional franchises are set up to manage the installation and operation of smart meters with the communications to and from the meters managed centrally and on a national level.

Market model could be an obstacle for consumers

Mark England, managing director of smart metering/energy technology company Sentec, believes that the market model may provide an obstacle for consumers who wish to take advantage of all that smart meters can offer:

“In the short term, smart meters will enable suppliers and customers to share information that will help consumers take greater control of their own energy use. This should help them to cut costs and emissions, and has the potential to make a huge difference in its own right. But it is only the beginning of what can be achieved. Smart meters are, in effect, a gateway to a huge range of possibilities, including increased micro-generation, greater use of renewables, and a whole range of home management options.

“But these opportunities will only be realised if sufficient room for competition and innovation is built into the market design. An overly-prescribed, standardised model may take a particular view on how the interoperability of all the meters might work at the expense of that need to drive competition and create a market in which consumers can make real choices.”