Will Smart Meters Cut Energy Use, Save Money on Power Bills?

The UK plans to offer power monitors with all smart meters established in people's homes as a way of decreasing CO2 emissions. Initial government estimates propose that smart meters could save round 3 4m tonnes of CO2 emissions over a 20-year time span as persons become more cognizant of the power they were consuming and decrease their power use. In the UK families account for about a quarter of power use and CO2 emissions, annually. It has been estimated that more than £900m worth of electrical power is wasted each year as a result of appliances being left on standby mode. The UK government plans to establish smart meters (paid for by the user) in more than 27 million dwellings and 2 million enterprises over the next decade. The Australian Government has funded a demonstration project for a smart grid in a joint project with the power sector. In America the Congress in 2000 assigned US $4.5 billion for smart grid deployment.

What is a smart meter?

A smart meter is a sophisticated meter that records power use for time periods of an hour or less, and utilise two-way communication to send the usage data by a network back to the electrical power provider for supervising and billing purposes.

Typical smart meter - learn more about them here. Source: Public Domain

Smart meters can furthermore be utilised for natural gas or water consumption. The meters are of major advantage to the suppliers.

The old-style meters could only assess total utilisation on the entire grid and supplied no data of when the power was consumed. The time of use data, provided by the smart meters, can be utilised to better agree provide to demand. It can furthermore be utilised to introduce varying charges based on the time of day and the season. This has major advantages for managing peak demand, which is very costly to supply for short periods of time over and above the base-load.

What's in it for customers?

It is contended that buyers can use the same usage and time data to supervise their own use. They can work-out which appliances use the most power and when. They can furthermore experiment with switching off 'stand-by' appliances and see the benefits.

In a sense, clients will be encouraged to adapt their utilisation patterns in relation to the market prices that change throughout the day. However, those that are against smart meters point out that the smart meters by themselves supply no advantages to customers.

They only get the benefits by changing their customs by turning off stand-by appliances and changing when they do things throughout the day.

If they don't make these alterations they will face the additional charges for the smart meter as well as higher electrical charges, as the suppliers boost the rates for the peak demand periods.

Italy has the world's biggest smart meter development so far with over 27 million customers. The meters are smart and fully electronic, advanced power measurement and management capabilities, integrated two-directional communications, an integrated remote disconnect switch, and an all solid-state design.

The system as a range of very advanced features:

a customer can have their power remotely turned power off or on,
detect a service fault,
read usage information from a meter,
locate unauthorized power use,
change the maximum delivery rates for a customer and remotely change the way the bill is paid and the plan offered in terms of multi-rates.

Research released last year in Finland found that smart meters created an average power cost savings of about 10%. Another publication estimated the savings at about 10% for business and about 7% for households. Other more cautious estimates varies between as little as 3% and 5% - which is quite low, given the cost is borne by the user. However Dutch investigators asserted that even these small saving estimates were too high because the study was only run for three to four months.

A longer study undertaken at Delft University of Technology over 15 months, discovered that many of the initial power savings were diminished with over time as the consumer's eagerness waned and they reverted to their old habits. More sophisticated schemes permit the business to remotely turn off a customer's water heater at the time of peak demand, with the customer's consent in exchange for a special tariff.

Research published last year in Finland found that smart meters produced an average energy savings of about 10%. Another publication estimated the energy saving at about 10% for businesses and 7% for households.

Other more conservative estimates range between as little as 3% and 4% - quite low, given the cost borne by the user. However Dutch researchers claimed that even these small savings were too high because the research was only run for three or four months.

A longer study conducted at Delft University of Technology over 15 months, found that many of the early energy savings were lost over time as consumer enthusiasm waned and they reverted to their old habits.

More advanced systems allow the company to remotely turn off a customer's water heater at the time of peak demand, with the customer's permission in exchange for a special tariff.

How will consumers be able to better manage their energy consumption?

Smart meters mean that consumers can see a display of their electricity consumption in their home or businesses and see what appliance consume the most power and how turning off appliances on 'stand-by' reduces consumption. By being able to monitor daily consumption patterns consumers can modify their behaviour to save money on their electricity bills. There are many tools such as the Google tool which provide more comprehensive information than that available of the smart meter display.

How do smart meters benefit the electricity network?

The network can be more effectively used when peak demands are flattened out through tariffs that encourage buyers to use off-peak electricity. This decreases the requirement to augment the distribution network to deal with peak loads. Smart meters can furthermore improve the network through the detection of outages helping much quicker rectification of problems. And they can furthermore monitor the quality of the by detecting low and high voltage.

How do smart meters improve the service for customers?

Smart meters increase the details and improve billing accuracy, avoiding the need for estimated accounts, and help clients to better understand their electrical power consumption. They will supply more timely services through remote disconnections and connections. The meters furthermore help the detection of outages and much quicker rectification of problems.

What are the Negative Aspects of Smart Meters?

Many fear that the smart meters may be an innovative concept for the electricity industry, but bad for many consumers.

Some electricity companies promote the positive aspects of smart meters, highlighting them as a tool for tackling climate change. However many people won't be able to transfer the bulk of their electricity usage - such as cooling, heating, cooling, entertainment and cooking - to off-peak times. It will require a major changes of habits and lifestyles.

In Australia, the Victorian Energy Minister has recently announced an indefinite moratorium on the smart meter rollout to every home across the state - because of concerns the poor and pensioners would be hardest hit by higher electricity prices. Energy retailers will charge more for electricity during times of peak demand, and if you are not savvy enough to make the changes you may be hit with higher bills. Users also have to pay for the meters (about $40 and $50 a year) in Australia.

The fear is that most people will pay higher electricity bills when they get a smart meter because they will not be able to find enough savings.

People at home during the day will be the worst off - people such as pensioners, the stay-at-home parents, the unemployed and people who work at home.

Consumer Backlash About Smart Meters

There appears to be a growing consumer backlash about smart meters in America and worldwide. Most consumers can't see how that the benefits outweigh the costs and ask what's in it for them, given they bear the cost of the meters.

How can they reduce their power bills when the major things and activities, and their timing can not be changed? For example activities such as the times they cook, the times they relax in front of the heater in the early evening, the time they wash their clothes and dry them. Many consumers cannot see the alternatives, which are simply not obvious nor practical.

Many think it may be better to switch power sources or install insulation rather than fiddle with their power use and behaviour.

Turning off appliances on 'stand-by' may not save much from the power bill.

Research by a University of Oxford group found that the devices themselves were unlikely to lead to an overall reduction in the demand for energy. Smart meters even with displays showing instantaneous energy use and how much power each appliance or activity is consuming still require the users to change their habits and the way there use power and at what time.

Consumers have to stop doing things, and change when they do other activities, but what is required is not obvious - it takes work, time and knowledge of the alternatives.

It only makes sense if you have an option that makes a major difference - an alternative course of action. If you use electric heating - what's the alternative - propane or natural gas? If these alternative are too expensive what's the other alternative - wearing 4 layers of clothes and not using the heater during the peak price periods and freezing?

There must be practical and valid alternatives beyond simply watching you money go up in smoke! Unless the power companies provide some sort of an incentive, like a discounted price to chase, then most householders will get bored with watching the smart meter display and return to watching the TV instead.

The incentive to let the power company turn-off your water heater for a lower tariff may be attractive for some people but many may see it as an intrusions. There is a huge potential privacy issue that has been recognised by some companies.

Conclusion

Smart Meters appear to be a smart idea for the power companies but a dumb idea for the consumers who ave to pay for them.

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