Smart meters essential to energy supply

Tuesday, June 09, 2009

The implementation of smart meters will be a huge challenge. There will need to be standards to support different types of meter and a national infrastructure to ensure that the data from the meters is available in the right place at the right time. Someone will have to finance this and a future generation will have to pay for it.

Despite these risks, the scale of the challenges we face means that smart metering has to be a vital part of our national energy infrastructure. How do we make it successful? First, we must get the level of competition correct. The UK did a brilliant job of creating the world's first truly liberalised domestic energy market. However, competition was driven down to very low levels, including segregation of the metering business. This incurred a cost wholly disproportionate to the benefit. We must not make the same mistake again.

Second, we must apply the lessons from elsewhere. Work in Australia and the United States has identified that significant benefits accrue to distributors, the people who own the pipes and wires; in the US, savings of 30 per cent have been achieved. Our benefits are primarily identified at a consumer, supplier and metering level.

Smart metering is a prerequisite of a smart grid. Our energy supply has been driven top down by large power stations. In the future, it must support bottom-up demand management, local generation and consumers selling energy back to the grid. This 21st-century infrastructure will be achieved only with a solid smart meter base.

This story was featured on The Times Website.

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