Concerns about reducing greenhouse gas emissions, maintaining security of supply and tackling fuel poverty are at the top of the political agenda. Smarter, more innovative energy meters may be able to help tackle all three challenges. They could help domestic customers understand better their energy use and reduce how much gas and electricity they use. They could also reduce the costs of prepayment meters that many fuel poor customers use. Smart meters could also allow suppliers to improve the service they offer all their customers by removing the needs for estimated bills and meter reads and the problems they can create.

Since 2001 Ofgem has progressively introduced competition in gas and electricity metering services to allow customers more choice, to lower costs and to encourage innovation. It is too soon to judge whether metering competition is a success but suppliers do not currently have any plans to introduce smarter meters for a large number of domestic customers. Given the potential benefits and interest in smarter metering we want to work with government, the energy industry, meter manufacturers and other stakeholders as part of a major push to try to unlock the potential of smarter metering for domestic customers. The present consultation marks the beginning of that process. It sets out our analysis of the potential costs and benefits of smarter metering and what might need to be done to deliver smarter meters.

Courtesy of Ofgem