UK smart meter roll-out – what should households expect?

6 August 2013 (Last Updated August 6th, 2013 18:30)

The Energy and Climate Change Committee issued a report last week on the smart meter roll-out that is set to begin in 2015 and reach completion in 2020. The group acknowledges the programme will have a beneficial impact on UK consumers and businesses. However, it reveals that the immediate cost of the roll-out could come close to £12.1bn, but the long- term price tag of benefits could reach £18.1bn. Alexandra Carrera reports.

UK smart meter roll-out  – what should households expect?

UK households will have their existing electricity meters replaced

The committee's primary area of concern is "consumer acceptance of and engagement with smart metering", which it admits will determine whether the programme will be a success or a failure.

As a result, the main goal of the DECC is to ensure that the all necessary information is disseminated to UK consumers in order for them to fully experience the rewards that smart meters have to offer.

Incentives and installations

"At installation, participating UK households will have their existing electricity meters replaced by a smart unit."

So what does having a smart meter actually entail for UK consumers? According to Dave Openshaw, a senior advisor with UK Power Networks and a fellow with the Institution for Engineering and Technology, the purpose of the smart meter programme is to enable consumers to "make more informed choices."

Openshaw emphasizes that: "They'll be able to monitor their electricity and gas usage on their in-house display (IHD) so they'll see real time energy consumption and information."

At installation, participating UK households will have their existing electricity meters replaced by a smart unit, which will also include an IHD that may take the form of a pad or a portable computerised device.

As a result, consumers will no longer need to read the meter itself or schedule monthly meter reading visits with engineers. Instead, they would be able to look at their IHD and instantly examine their energy usage from anywhere in their home.

No more high electric bills - but is there a catch?

Currently, UK consumers pay an estimated rate depending on the scheme that they choose with their energy company. The breakdown of the bill usually includes the kilowatt hours (kWh) used in addition to the cost per kilowatt hour and the latest meter reading.

"As a result, consumers will no longer need to read the meter itself or schedule monthly meter reading visits."

However, the initiative will include time-of -use (ToU) tariffs, which allow consumers to see which times during the day that electricity prices will be higher or lower.

"Consumers will be able to do more manual interventions into whether they'll be using electricity or not," Openshaw reveals. "In the longer term," he adds, "we would anticipate a greater use of time-of-use tariffs."

As a result of the ToU tariffs, UK households will be able to reduce their electricity and gas costs, by combining both bills into one, which Ofgem believes will save consumers "£23 a year by 2020."

Privacy concerns and considerations

On the other hand, reservations in relation to consumer safety within the programme continue to arise, mainly involving the possible lack of privacy, security and data protection.

"As a result of the ToU tariffs, UK households will be able to reduce their electricity and gas costs."

Doubts as to whether proper safeguards on customer information will be added have become the main argument against going forward with such a programme.

Critics of the smart meter question whether consumer privacy will be respected and protected. Furthermore, smart meter opponents question whether UK energy companies will be able to prevent hackers from stealing background and financial details on their customers.

"There's no reason to suspect that the smart meters that are out there now are not secure," Openshaw asserts. He also stresses that: "Very strict provisions will be put in place both by suppliers and by network operators to make sure that the data is held securely."

Ofgem believes that by 2020 more than 50 million new meters will be installed in around "30 million homes and businesses."

Although it is not mandatory to participate in the smart meter programme, organisations such as the DECC, the IET and the Energy Savings Trust believe it will bring about major changes to the energy industry, as well as revolutionise the manner by which electricity and gas are consumed in the future.

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