New Energy Focus - The key to delivering energy efficiencies

John Roberts, former chief executive of Untied Utilities and chairman of smart metering company Remote Energy Monitoring, looks at the government's plan to roll out smart meters nationwide by 2020.

On Monday, DECC finally announced its proposed plan for the roll out for smart meters.

Much has been made of the costs of the roll out, but the benefits for all are so significant that the decision was taken to move forward at pace with the roll out.

By installing smart meters both energy retailers and consumers can achieve significant cost savings.

As many are aware, by having a smart meter installed into your home consumers will only ever receive an accurate bill and be able to monitor their own energy consumption and consequently change behaviours and benefit from reduced energy bills.

Test programmes for smart meters have demonstrated that consumers reduce their energy usage by up to 15%.

Based on savings of five per cent, if everyone in the UK switched to smart meters, British householders could save £1.2bn a year. Energy retailers could also provide advice to consumers based on their usage patterns.

Smart meters will enable energy retailers to deliver high levels of customer care, particularly when an on demand communication functionality is incorporated. The combination of no more estimated bills and no meter reading visits immediately provides the energy provider with significant savings.

Additionally, by having a more accurate picture of energy consumption energy retailers can manage their own energy production and purchasing more effectively.

But costs are not the only factor that is impacted by the introduction of smart meters. As OFGEM noted in its recent report (23rd March 2009), vulnerable customers historically fared worse due to higher energy tariffs, because of the cost of prepayment meters.

Smart meters will enable energy retailers to switch consumers from credit to pre-payment functions as appropriate and experience more cost effective energy tariffs. As up to date information is provided directly to the utility about consumption, the utilities manage their customers more efficiently, handle debt in a more socially responsible manner and deliver significant carbon savings.

Carbon

Reducing unnecessary energy generation will contribute to estimated reductions in carbon emissions of 7.4 million tonnes per annum Grid operators will be able to forecast demand much more accurately and reduce the level of supply to what is needed. Reducing unnecessary energy generation will contribute to estimated reductions in carbon emissions of 7.4 million tonnes per annum as a direct result of the installation of smart meters.

This is particularly important when less "reliable/constant"" alternative energy is incorporated as part of the energy mix. This increasing level of knowledge will also reduce back office costs like meter reading and make complaints easier and quicker to resolve.

Energy retailers will finally be able to shrug off their bad reputation of issuing inaccurate bills.

It is clear that there are significant advantages to smart meters. The key is to install multi mode meters that can be upgraded and adapt to the latest technologies but are also supported by a completely integrated software system