By Derek Lickorish

Derek_LickorishEnormous environmental expenditure to protect the world’s future generations is a tremendous responsibility, but we know enough about energy, its costs and its environmental impact to begin the journey of serious carbon reduction and energy’s very efficient use. The European Energy Services Directive (ESD), together with the government’s White Paper is creating a drive in the UK, but are these a catalyst or a catastrophe as we try to understand the next move?

The need to implement the ESD and the difficulty of, say, a 2-year delay in installing smart meters, could lead to a trade off between ‘clip on’ real time displays versus smart gas and electricity metering in the UK.

Real time displays are a potentially unsatisfactory intermediate step to smart metering. The information provided will not be billing data as such, and will not include gas, and all the data and estimating process issues, etc. will remain. A better intermediate step could be for a display from the electricity meter and to derive a metered real time display. This would still have stranding issues but no more so than the use of such displays as currently envisaged, but the information would be accurate.

Turning to the bigger picture, more detailed analysis of the options for rollout is required. Some of the more strategic and, as yet, not completely quantified smart meter customer benefits are:

  • Engagement in energy use in an innovative and enduring way
  • Provision of accurate real time billing information for both fuels
  • Time-of-use and/or carbon use tariffs together with innovative payment options
  • Microgeneration – fuel cells importing and exporting as system prices dictate (not average profile price)
  • Ease of supplier change process, change of tenancy, change of payment and metering options
  • Demand side management post-2012, with freezers, fridges and electric summer water heating remotely controlled to meet the government’s carbon reduction target.

There is much to be resolved, including interoperability, rollout options, communications, legacy contracts and, of course, the costs and the business model. My view is that competition, compared to a centralised command and control structure, will serve the customer best. Market-based solutions provide incentive and drive creativity, and customers receive the most cost effective solution. However, a level playing field is needed and that will require some form of light touch enabling regulation, to remove the uncertainty and create the right direction and framework for a smart gas and electricity meter future. Perhaps a mandate for smart meters, but from when?

A consultation document has just been released. All interested parties need to work together and analyse the options, and have it finished by the end of this year – there is now a unity of purpose, and we can and must make it happen.