[Amatsia Kashti][July 17, 2006]Two pages in the new Energy Review report published by the UK’s Department of Trade and Industry last week are dedicated to smart metering and real-time displays in homes. 

The inclusion of both issues is considerable conceptual progress for an industry that, until recently, considered the actions and inactions of small consumers to be irrelevant to national energy consumption.

As the remit of the report is to assess means to address carbon reduction challenges, it focuses on the effects smart metering and real time displays could have on home energy savings. As such it neglects other aspects of this technology, such as promoting competition and the achievement of social goals.

The underlying assumption of the authors is that when provided with more accurate and timely information, consumers reduce their energy demand.  One Canadian research project quoted concludes that households “reduced their energy bills by an average of 6.5%”. On an annual basis such saving would diminish the average British annual household bills by just under £45 (US$82) or £0.90 (US$1.60) per week or £0.12 (23 USc) a day. 

Some people would no doubt consider it to be a significant saving, and proof of the concept, but the report also points to the system’s installation cost of £8 billion (US$14.6 billion) that will be passed on to consumers, offsetting much of the savings. 

In other words, when your smart meter informs your real time display to suggest you load your washing machine in the evening and programme it to switch on at 3 a.m., and then in the morning suggests you move the washing to the dryer to be programmed for 3 a.m. the next morning, you will not save the full 12 pence, but a fraction of it. I am not sure there are many who would bother.

In conclusion, the authors of this report, just as the authors of the report on domestic metering published by Ofgem a couple of weeks earlier, have failed to appreciate the conceptual leap required by meter designers and operators in order to achieve economic viability, without which no smart metering programme can ever be implemented.

This report that weighs among other, nuclear energy options, does not consider underlying metering issues, concentrating instead on simplistic and obvious challenges.