Some day in the not too distant future, we will look back at the idea of people knocking on our front doors to read our meters and smile. Smart meters and grids are a technological great leap forward that will consign many of the inefficiencies that characterise our current utility systems to the history books.
Wholesale electricity prices rise and fall in predictable ways at different times of the day, week and year, yet most consumers pay set rates. Smart meters allow suppliers to introduce dynamic tariffs, varying charges hour by hour according to demand. Laurence Carpanini, director of smart meters and smart grids at IBM UK, says the experience of smart metering in other countries has shown potential savings of 10%-15% in energy use. Consumers who can see that they can save energy, and money, by using their dishwashers at night, for example, are more likely to do so.
Ann Robinson, of uSwitch.com, says: "Not only will energy companies be able to provide attractive new tariffs around using electricity at off-peak times, but smart meters will also give us all more control over the energy we use."
The potential savings to consumers obviously vary according to behaviour, but British Gas estimates smart meters will reduce bills by about 3%, or around £30 a year for the average user.
Greater monitoring
In Italy, the state-owned utility ENEL installed more than 27m smart meters between 2000 and 2005 at a cost of €2bn (£1.75bn), or €70 per house. Total savings to ENEL were €500m a year and household power consumption fell by 5%.
Smart electricity grids will replace centralised, passive grids that deliver power from a few central power stations with more interactive networks that can move electricity around more efficiently. Because they allow greater monitoring, analysis, control and communication, they can respond much more proactively to events that affect generation and distribution, such as sunny weather triggering greater solar generation and increased use of air conditioning in offices, for example.
"Suppliers will have much more information about where the greatest demand is, meaning they can take steps to remotely manage that demand," says Zoe McLeod of Consumer Focus. "As a result of these more flexible tariffs, the energy companies will have to invest less in new power stations. These savings should be passed on to consumers."
Early "smart home" systems have required householders to buy expensive hardware and have tended to be the preserve of a small, dedicated group. Smart grids will help change all that.
Since 2007, residents of Friedrichshafen in Germany, have been testing the latest in state-of-the-art information and communication technology as part of Deutsche Telekom's T-City project. Fifteen households in the city have been trying out a system called HomeNetwork 2.0, which allows them to check on and operate their heating and other electrical appliances remotely via the internet, including from their smartphones.
Users can, for example, alter the times when the heating turns off and on, open and close windows, or switch lights on to simulate their presence for security reasons – all without having to be at home. The system is due to be offered to customers in the UK and elsewhere in the autumn.
Gabriele Riedmann de Trinidad, a senior vice president at Deutsche Telekom, said HomeNetwork 2.0 features such as room-by-room heating control, and automatic switching off of heating when windows are opened could help some consumers reduce their energy use by 20%.
"Smart grids together with our HomeNetwork allows users to control their appliances according to the availability of renewable energy," she says. "For example if you have an area with a lot of sun and photovoltaic energy during the day, currently the surplus electricity must be transferred elsewhere or sold abroad. In the smart world, with home management, it is possible to do demand management through different tariffs, so for customers we can improve home comfort and quality of life, while saving energy."
