Perspectives on the Green Deal and the Smart Meter roll-out

Last week I attended a Parliamentary meeting titled ‘Putting consumers in control? The Green Deal and Smart Meters’. Phil Bently, the Managing Director of British Gas and Audrey Gallacher, Director of Energy Policy at Consumer Focus presented their perspectives on these two key Government energy reduction initiatives. A number of MPs also attended the meeting and consequently it was a great opportunity to hear views of representatives from Government, industry and consumer bodies.

The presenters agreed that together the Green Deal and the Smart Meter roll-out were essential in encouraging us all to reduce the energy used in our homes. A recurring theme was that in the context of ever increasing energy prices consumers need to make energy efficiency improvements to their homes and change their behaviour if they are going to keep their bills down.

Throughout the discussion it emerged that Government, industry and consumer representatives at the meeting saw the policy initiatives as very separate entities. The researchers on the REFIT project, however, see the improved energy consumption data that will result from the roll-out of Smart Meters as an exciting opportunity to inform retrofit decision making. We aim to analyse Smart Meter data to improve the Green Deal advice process and consequently recognise the cross over in these two significant initiatives.

REFIT visits the Smart Home conference

The Loughborough research team attended the Smart Homes, Smart Metering and Smart grid conference in Amsterdam last week. As a UK based energy researcher my interest in this field is broad but I was particularly focused on the Smart Metering stream. In the UK smart gas and electricity meters will be rolled-out to all homes by 2020. This is a mammoth task so I wanted to find out what industry (the utility companies which will be doing the rolling) think are the main challenges to the success of the smart meter roll-out and also what are the business opportunities which the new level of energy use data will provide.

Before I move on you might ask – what is a smart meter? Well, a smart meter, which will be installed in your home over the next eight years, is one which is enabled for two way communication. A traditional energy meter registers your consumption and is read by the consumer (you) or a meter reader from the energy supplier every three months. A quarterly bill is then produced which represents the energy used for the whole period. Often, however, this bill is estimated because the meter has not actually been read. A new smart meter will log energy use half an hour (in the UK the detailed specifications differ in other countries) and read automatically by the energy supplier via mobile communication. This will enable more regular and more accurate billing.

So what are the main challenges and opportunities which this roll out of over 50 million meters presents? The message was that on the whole the technical problems regarding the detailed specification of the smart meters have been solved or at least are in the control of the various technology developers involved. One challenge and one opportunity, however, were repeated by many of those presenting.

The main challenge was getting the costumer, the energy consumer, on board. There were questions about the acceptability of the customer to having energy suppliers knowing real time energy data. But what are the benefits to the customer (there are many benefits for the energy industry but these don’t matter to consumers)? Mainly, there is an opportunity for customers through being less detached from their energy use to save money. In the old billing model it was impossible to equate an action, say turning on the kettle, with an outcome, an increase in energy use which has a cost. In the new model a visualisation of real time energy use collected will be provided for every home and through engaging with this it will be possible for customers to better understand how to save energy. This suggests a research question which was not answered at the conference – does the potential to save energy through better information offset the perceived negative impacts of smart meters for consumers?

The main opportunity related to the unprecedented amount of energy use information which will be gathered by energy suppliers via smart meters. This potential business opportunity was discussed during many of the presentations I attended but the overwhelming message was ‘we still don’t know what to do with all of this data’. The REFIT project team are going to make some suggestions!