Get Smart: Bringing meters into the 21st Century

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Keywords:poverty targets, electricity consumer, consumer watchdog, fuel poverty, international competitiveness, carbon emissions, smart meters, reduction targets, domestic sector, carbon reduction, billing practices, energy market, reducing energy, fuel bills, energy usage, climate change, fuel prices, energy use, get smart, current situation

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Date Added:Dec 31 2008 2:11PM

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Energywatch, the gas and electricity consumer watchdog, recommends that smart meters, capable of displaying consumption costs and being read remotely, are installed during all meter replacement activities and in all new connections. Smart meters can help in delivering carbon and fuel poverty targets through reducing energy usage. However, the current structure of the energy market means it is highly unlikely such meters will become widespread without further action.

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#font 334 "BVWNPU+GillSans LightItalic 139 0" www.dti.gov.uk energy environment energy_efficiency smartmeter.pdf www.eci.ox.ac.uk www.eci.ox.ac.uk www.cse.org.uk pdf pub1014.pdf. www.parliament.the stationery office.co.uk pa cm200405 cmselect cmpubacc 442 442.pdf Ing.Carlo Maria Drago European metering workshop,ISPRA. energyefficiency.jrc.cec.eu.int html Advanced 20Meters 20for 20Energy 20Efficiency 20and 20Renewable 2005 2003 2007 20IS P RA 20Drago.ppt www.ofgem.gov.uk temp ofgem cache cmsattach 2638_factsheet26_meteringmarch03.pdf www.dlms.com en index.htm www.ofgem.gov.uk temp ofgem cache cmsattach 2638_factsheet26_meteringmarch03.pdf europa.eu.int eur lex lex LexUriServ site en com 2003 com2003_0739en01.pdf europa.eu.int comm energy efficiency doc 2005_06_green_paper_text_en.pdf .pg.15.June 2005. www.metering.com archive 022 22_1.htm. #font 331 "KELZDK+GillSans Light 135 0" 1 Smart Metering Working Group Report.DTI. .2002 2 40 House.Environmental Change Institute,University of Oxford.pg.36.February 2005. 3 40 House.Environmental Change Institute,University of Oxford.pg.36.February 2005. 4 Towards effective energy information Improving consumer feedback on energy consumption.A report to Ofgem by the Centre for Sustainable Energy. 2003 5 3,300kwh electricity c300 and 20,500kwh gas c400 per annum 6 House of commons committee of public accounts:Ofgem the social action plan and energy efficiency commitment.pg.6.May 2005. 7 Automatic Meter Management The future has already started. March 7th 2005 8 Figures provided by BEAMA. 9 2.5 million smart meters @ 50 per meter = 125million as opposed to:500,000 ppms @ 50 per ppm = 25million plus 2 million cre dit meters @ 7 per meter = 14million.Therefore total = 39million.Difference in programme costs = 86 million.Labour costs are assumed to remain the same. 10 Introducing competition in metering.Ofgem Factsheet. 11 DLMS website. 12 Introducing competition in metering. Ofgem factsheet 26.March 2003. 13 Proposals for a directive:energy efficiency for end users and energy services 14 Commission of European Communities:Green Paper on Energy Efficiency. 15Keypad Prepayment System trials successful in Northern Ireland. #font 126 "EBZABY+GillSans Italic 131 0" Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch Bringing meters into the 21st Century Gas and Electricity Consumer Council energywatch #font 88 "XRXUBT+GillSans Light 191 0" #font 86 "UZGUAY+GillSans LightItalic 188 0" #font 84 "EMTBOR+GillSans Light 186 0" #font 82 "MCTWXN+GillSans 183 0" #font 80 "ZSTRUY+GillSans BoldItalic 180 0" #font 78 "HXMAFG+GillSans Italic 178 0" #font 76 "EVLTYB+GillSans Bold 177 0" #font 74 "RCDMIE+GillSans Italic 169 0" #font 72 "PBYCYR+GillSans BoldItalic 174 0" #font 70 "PXSYML+GillSans 179 0" #font 68 "MHTDKG+GillSans Bold 162 0" #font 66 "URLOJG+GillSans BoldItalic 161 0" energywatch August 2005 Summary Evidence shows that smart meters have the potential to deliver significant benefits to priority consumer groups,improve energy efficiency and promote the effectiveness of the energy market including: Barriers and recommendations: What makes a meter smart? The benefits ofsmarter metering Barriers to implementation ofsmart metering technology Emerging European Legislation Conclusions Examples of metering technology in practice Energy Efficiency Commitment #font 64 "LIYMWM+GillSans 156 0" Bringing meters into the 21st Century energywatch,the gas and electricity consumer watchdog,recommends that smart meters,capable of displaying consumption costs and being read remotely, are installed during all meter replacement activities and in all new connections. Smart meters can help in delivering carbon and fuel poverty targets through reducing energy usage.However,the current structure of the energy market means it is highly unlikely such meters will become widespread without further action. Rising fuel prices of 15 to 25 in the domestic sector have,over the past 18 months,pushed around 500,000 households into fuel poverty across GB.The non domestic sector has witnessed rises of up to 40 which have put serious pressure on the GB economy and its international competitiveness.It is widely predicted that similar rises will be replicated over the coming year.At the same time carbon reduction targets have come under pressure. It is vital,therefore,that cost effective technologies which impact positively upon fuel bills and carbon emissions should be explored and wherever possible utilised.Available evidence suggests smarter meters can reduce energy use by between 3 and 15 through changes in behaviour.Moreover,smart meters capable of being read remotely would have a significant and positive impact upon consumers experience of the energy market by serving to avoid debt,and other detriments,caused by poor billing practices. energywatch therefore recommends a review of the current situation to identify how best to facilitate,encourage and,where necessary,require the installation of such technology in order to aid in the fight against fuel poverty and climate change,while making the GB economy more sustainable and the energy market more effective. Reducing fuel bills by providing better information on consumption patterns.Research suggests savings from change of behaviour associated with smarter metering can reduce consumption by between 3 and 15 . A reduction of 5 can result in a 35 per annum saving for an average consumer; Such meters also eliminate problems associated with estimated,inaccurate and late bills and the knock on effect where consumers find themselves in debt,often put onto more expensive payment methods and unable to switch to a cheaper provider; A reduction in annual carbon emissions equivalent to approximately 6 of savings to be produced from EEC2; Helping deliver security of supply by reducing demand for energy.A smart meter replacement programme could result in savings of around 1,250 GWh this year.This is similar to the amount of electricity a 300MW combined cycle gas turbine station would produce in a year if it ran at full power all the time.Clearly the potential to save energy increases annually with ongoing replacement programmes; The facilitation of the selling back of surplus energy by microgeneration technologies to the grid; Suppliers can save on costs through reduced contact and complaints surrounding billing and data issues,and easier complaint resolution associated with poor billing; A better understanding of consumption patterns would also offer the opportunity to introduce innovative demand management tariffs. Consumer churn raises the fear among suppliers of creating stranded assets.We therefore recommend a review of meter ownership arrangements and the possibility of transferring this to distribution network operators in electricity and transporters in gas,as is the case in many other energy markets worldwide. The lack of any requirements for smart meters,or perceived benefits to any single agent in the energy industry,has seen the continuation of the installation of non smart meters.We therefore recommend requiring that all new and replacement meters are capable of showing time based consumption in terms of cost and kWhs and of being read remotely. Lack of common standards in terms of what such technology should include may have caused uncertainty.We therefore recommend the development of guidance requirements for minimum standards such as data transfer protocols. energywatch calls upon the Government,Ofgem and the industry to deliver a pathway that might lead to the widespread adoption of smarter meters and smarter energy consumers. Over the last two years energy prices have risen by between 15 to 25 for domestic consumers.For consumers facing such price rises,the ability to monitor their energy use and adapt their behaviour accordingly is vital.Bill statements often contain estimated figures that prevent consumers making informed decisions to help reduce their costs and consumption. The majority of gas and electricity meters used today are based on a design which is at least twenty years old.The meter displays a figure which must be physically read by a meter reader,or the consumer.Such displays mean little to consumers,giving no meaningful information on costs or environmental impacts. The Government has set targets to reduce carbon emissions,increase energy efficiency and eradicate fuel poverty.This paper summarises why improved metering can help deliver all these objectives and suggests how the market could be better structured to give incentives to suppliers,distributors and consumers to quicken the pace of meter replacements. The principle function of a meter is of course to measure consumption. Currently this information can only be captured by a meter reader or by the customer providing the information to the supplier themselves.The majority of gas and electricity meters in Great Britain may be relatively new less than 20 years old but are based on designs from the 1970s,and based on principles developed during the nineteenth century.Information is displayed in kWhs by a series of dials or a mechanical display. More effective and efficient metering technology has existed for many years. Other countries have,or are midway through,updating their metering stock to take advantage of the benefits of more sophisticated meters see Appendix A . Although there is no universal definition of a smart meter the following functions are available: Display and record real time information on energy consumption that is available immediately or remotely to energy suppliers and consumers; Easy to understand,prominent display unit which includes: Costs in p, Indicator of low med high use, Comparison with historic average consumption patterns, Function to allow data to be accessed via PCs mobile phones, Two way communication between energy suppliers and the meter to make it possible to switch tariffs,or pay as you go pre payment provisions, remotely; An internal memory to store consumption information and patterns; Export metering for micro generators; Demand side management options,such a tariffs which charge more at peak demand times of the day and less for off peak times; Inactivity monitoring and,in gas,real time monitoring of gas leaks and carbon monoxide emissions;and Provide data to suppliers to ensure: Correct and timely bills; Information on patterns of use improving forecasting and wholesale purchase; Targeted advice of efficiency measures to customers. In order to realise the benefits of improved metering service the following characteristics will probably be required: Clear display providing information on consumption and cost over a series of timeframes half hourly,weekly,monthly etc ; An internal memory to store the half hourly data for at least a year; A communication facility allowing the half hourly consumption data to be sent by radio,phone,internet,SMS or other to suppliers,or for a meter reader to transfer the data onto a handheld set,as per normal meter reading activity; Two way communication between energy suppliers and the meter to make it possible to switch tariffs,or pay as you go pre payment provisions, remotely.This would also enable the calibration and recalibration of debt recovery rates; Ability to be upgraded future proofing to allow for demand side management tariffs and domestic scale generation to become more widespread. Some or all of these characteristics can be found in meters in other countries. See Appendix A for more information. The potential advantages of improving meters fall across the areas outlined below. Helps those least able to pay for their energy use The price rises witnessed over the last two years are threatening to reverse the progress that had been made in tackling fuel poverty.While the Governments 2005 annual report on the UK Fuel Poverty Strategy records that households in fuel poverty had further decreased to 1.2 million households in England,of which 1 million are considered vulnerable,and a total of 2 million across the UK,that figure is based on 2003 data and the price rises since are certain to impact on the downwards trend.The DTIs own ready reckoner has estimated that a 1 per cent real change in both gas and electricity prices would imply an increase of 40,000 households in fuel poverty. Many consumers in debt have pre payment meters to allow debt repayments to be made.The gulf between the highest PPM tariff on the market and the lowest direct debit tariff is 159 for electricity and 149 for gas.In Northern Ireland see Appendix A smarter PPMs have been installed which,with improved cash flows and reduced servicing costs,have meant lower prices for consumers. Additional benefits for vulnerable consumers are potentially: Two way communications with prepayment meters will improve their performance and reduce their costs.For example,when coupled with key pad systems,credits can be added remotely avoiding the need for a visit when customers cannot get credit for whatever reason.This should also reduce costs and problems for consumers in rural communities,especially for recalibration or varying debt recovery rates purposes; Providing information on fuel consumption should enable customers to manage their energy budget more effectively; Reducing the installation and operating costs of pre payment systems would make them more affordable to customers who prefer this type of payment; Suppliers and others can monitor the extent to which customers self disconnect; Specialised functions can send warnings to carers or suppliers should consumption patterns drastically change or consumption cease altogether; Smart meters would enable schemes such as Fuel Direct to be automatically activated to help consumers in need of the scheme benefit more quickly. Encouraging energy efficiency and responsible consumption There is a significant body of evidence that demonstrates that consumers behaviour can change when they are regularly made aware of the amount,and in particular the cost,of energy they consume 1,2 .The concept typically involves a consumption display located away from the meter in clear view of the consumer,for example in the kitchen or next to the thermostat,that provides details of energy consumed,its costs and environmental impact. Such meter technology could provide details of consumption over time as part of the energy bill and provide comparisons with similar properties.Studies and experiences from oversees including Italy,Ontario,Northern Ireland and elsewhere [see Appendix A] have demonstrated that changes in consumer behaviour result in a reduction of consumption by between 3 and 15 3,4 , with savings at the upper end often being linked to the provision of energy efficiency information and advice.While it is not clear how sustained this reduction could be over time,consumers with Economy 7 tariffs are proof that behavioural changes can be sustained for long periods. Even taking a conservative estimate for reductions of 5 ,the installation of a smart meter may bring savings per household of around 35 per year for an average user 5 .This is roughly equivalent to the costs reflected in an average household bill to cover environmental objectives such as the Energy Efficiency Commitment 6 . At present meters are replaced at a rate of about 1.5million electricity meters and 1million gas meters each year.If smart meters were installed during normal replacement programmes the amount of energy which could be saved after the first year would be around 1,250 GWh.This is similar to the amount of electricity a 300MW combined cycle gas turbine station would generate in a year if it ran at full power all the time.As each annual replacement programme and new connections are transferred to smarter meters the additional equivalent would be saved each year,dependent upon the replacement rate. The amount of carbon produced by an average households gas and electricity use is 2350kgCO 2 each year.A 5 reduction in usage for 2.5 million households could produce annual savings of 306,125 tonnes of CO 2 .This is equivalent to about 6 of the carbon savings to be achieved from EEC see Appendix B . The Government hopes that the domestic sector can achieve 4.2 million tonnes of carbon savings by 2010.In the above example installing smart meters could conservatively deliver 7 of this target each year.These savings are from behavioural changes resulting from improved information only and do not take account of any further energy efficiency measures. Demand side management and micro generation The Energy White Paper describes how the Government hopes an effective and competitive energy market will deliver reduced carbon emissions,secure supplies,and affordable energy for all.Demand side management measures and micro generation technologies would help fulfil these goals. Demand side tariffs allow suppliers to promote contracts which encourage customers to consume energy at off peak times during the day for example the early hours of the morning by offering reduced off peak charges in exchange for relatively high charges during peak periods of the day between 5.30pm and 7pm for example .In Italy see Appendix A tariffs have been developed which have three charges for different parts of the day.There is also a fourth charge which is only used,with advance warning sent to the meter,for the few days of the year where peak demand is very high in GB this would typically be a cold winter day.Reducing the demand during peak periods takes pressure of the distribution network and could potentially reduce the need for building generating plant to cover the peak periods. Although some demand side management tariffs are currently available e.g. Economy 7 smart meters could allow for far more sophisticated tariffs to be introduced which could help manage peak demand more effectively.Capturing half hourly consumption data will allow these tariffs to be developed to best fit actual usage profiles.Italy is currently undertaking a programme to install 30 million smart meters.It is estimated that demand side management tariffs, which limit customers to 3KW of power during peak periods,have reduced peak demand by 5 for 3 hours,10 days a year.This has removed the need to construct a power station with 2GW capacity to cover the peak demand 7 .[See Appendix A]. Microgeneration is the production of electricity and or heat from a low or non carbon source on a domestic scale.Examples include micro CHP a small Combined Heat and Power unit which produces electricity and heat simultaneously ,micro hydro,micro wind and photovoltaics.The Government is currently consulting on the development of a microgeneration strategy which may set targets for installation,or generation.The benefits of such technologies are that the fuel cost is zero in the case of wind,solar or hydro technologies and also carbon free.They can generate about a third of a householders annual electricity needs therefore reducing the cost to the consumer,and at the same time reducing the load on distribution networks. In order to capture the financial rewards from these emerging technologies meters must have the capability to record imported electricity from the distribution network and electricity exported back to the network during times when generation outstrips demand.They should also be able to record the overall amount generated to allow the customer to qualify for Renewable Obligation Certificates ROCs . Supplier savings Experience from other markets oversees see Appendix A all point to substantial savings for the whole supply chain where smart meters become the norm. As mentioned above meters are currently replaced or installed at a rate of about 2.5 million a year.This figure comprises 1.5 million electricity meter installations and 1 million gas meter installations.The capital cost of smart meters is currently higher than a basic credit meter.However,these costs are falling and we would expect this reduction to continue as economies of scale arise.Current estimated costs for electricity smart meters are between 40 and 50 more than standard electricity credit meters and around the same price as a pre payment meter 8 .For gas smart meters the costs are slightly higher. Based on these figures the cost for such a programme would increase by around 86 million 9 .This is an extra 11 a year on top of the 800 million Ofgem estimate the industry spends on replacing,installing,maintaining and reading meters every year 10 . If introduced during replacement programmes there are substantial opportunities for suppliers and distribution network operators to reduce their own costs which are ultimately borne by customers .The main savings arise from: Reduction in queries associated with inaccurate or missing meter reads coupled with easier resolution of billing queries claims from within the industry have suggested call centre efficiency can be improved by 70 ; Easier change of supplier process no disputes; Reduction in the incidence of high cost no access or must read visits; Lower cost to serve pre payment customers this can apply to both suppliers and meter operators; Reduction in maintenance requirements through self diagnostics; Increased identification of theft; Reduced peak demand through demand management tariffs; Better forecasting to increase the efficiency of wholesale purchases; Identification of houses in need of energy efficiency measures via Energy Efficiency Commitment or Warm Front,and Reduced meter reading costs. Improving billing performance Poor billing is by far the largest source of complaints to energywatch.In 2004 5 it accounted for 61.5 of all domestic complaints,equivalent to approximately 40,000 complaints.The number of consumers seeking advice about billing from energywatch has increased by 202 since April 2002. NOP research commissioned by energywatch in 2003 found: consumers lack confidence in the accuracy of estimated bills; 35 of customers receive estimated bills frequently; 1 in 5 believe that the estimated bills they receive are very or fairly inaccurate; Almost one in ten said that estimated billing had pushed them into debt with their supplier and for a third of those the debt exceeded 100. For 1 in 4 of these the debt was difficult or impossible to pay off. By phasing in smart meters billing inaccuracy should be eliminated over time. Automatic reads and better billing should lead to substantial reductions in suppliers back office costs associated with complaint resolution. In addition,two way communication with the meter means that supply can be stopped when the consumer vacates their premises at their request and only recommenced when the new occupants require it,ensuring the previous and new tenant are billed for the correct usage. More sophisticated meters should allow suppliers to reduce costs as they will have a much greater understanding of when and where their customers use energy. Technical Generally speaking the technology is already available for most of the options described above.There is however a fairly wide range of technology options both in terms of meter type and information exchange systems.One the one hand it is important to avoid being over prescriptive in terms of technology type to allow innovative solutions to emerge.However on the other hand it has been suggested that the industry would benefit from a clearer set of common standards for example by requiring standardised data transfer protocols. energywatch believes that agreeing basic standards for metering protocols and interoperability would prevent wasteful competition between viable technologies such as the VHS and Betamax struggle in the home video market in the early 1980s whilst giving manufacturers and suppliers the confidence that all billing and metering systems would be compatible.A number of standards exist,with work currently being undertaken to publish updated international standards covering automatic meter data exchange 11 . A further issue is that the continuing trend to install low cost meters with basic functionality has depressed margins in meter manufacturing.As a result very little investment is being undertaken in the UK in terms of research or prototyping. Historically the communications costs associated with half hourly and daily metering have been high,with new,dedicated lines.However,given mobile phone coverage and the fact meters would not necessarily need to be read in real time or even daily,the use of existing communication infrastructure should allow easier installation and immediate benefits from increased data accuracy. Regulatory The prime focus of Ofgem has been towards the development of metering competition.Ofgem has stated that competition will advance the interests of consumers by increasing choice,encouraging smarter meters and reducing costs for suppliers and consumers 12 .Whilst there is some evidence of this amongst larger non domestic consumers for example those with a number of sites nationwide who wish to manage their energy portfolio on a combined basis to date the impact on domestic consumers has been to restrict the degree of innovation. The combination of RPI X regulation on network operators and tight supplier margins has exacerbated the trend to install low cost meters with basic functionality.The meter stock is relatively modern in both gas and electricity but few meters are fitted with data ports both gas and electricity and no electronic gas meters are now being installed. Furthermore the 28 day rule and competition in metering services has mitigated against suppliers and meter asset owners being prepared to make investments that might be at risk from either change of supplier or meter operator.Whilst the new Supply Point Administration Agreements will help it is still the case that where new metering services contracts have been signed there has been the tendency to create a special purpose vehicle to own the assets in view of the risks involved.This has increased costs and complexity though the emergence of a small number of meter asset owners in the longer term may be a helpful development.It is apparent that the market could be working more effectively for domestic consumers seeking smarter meters,and there is a danger that the current state of affairs could lead to escalating problems should future legislation or regulation require smarter meters. Where smart meters have been introduced in other countries the onus for providing and maintaining meters falls on the distribution networks and not with suppliers.This approach frees the retailers from having to install assets which they can only make a reasonable return on whilst they supply that premises. Instead electricity distribution and gas transportation network operators can be guaranteed an income stream which is far easier to administrate for suppliers and distributors and transporters alike. Article 13 of the draft European Commission Energy Efficiency End User Directive 13 contains proposals to ensure consumers are provided with competitively priced individual meters that accurately reflect the customers actual energy consumption and actual time of use. energywatch made representations to the Commission supporting this clause with the proviso that the cost burden on consumers would be reasonable.Instead of a nationwide meter replacement programme energywatch favours smart meters being installed during all replacement activities and for all new connections.How this Directive will be transposed into GB remains to be seen,but the spirit of the Directive is to make it easier for consumers to use information and price signals to change their behaviour and reduce consumption and costs. The Measuring Instrument Directive provides a European wide approach to the standardisation,accuracy and allowable tolerances of 10 different categories of measuring instrument,of which gas and electricity meters are two.It is likely to result in tighter tolerances for meters and greater levels of in service monitoring of meters.Should some existing metering stock prove to be unacceptably inaccurate it will give weight to argument that metering stock needs improving. The recently published European Green Paper on energy efficiency states: There is a lack of effort to allow for consumers to understand the price of their consumption.A real time metering system so called smart meters could bring down consumption at times when the electricity price is high 14 . There is a good amount of evidence showing smart meters can play a significant role in helping consumers reduce their costs,promote energy efficient behaviour and assist vulnerable households.Reducing and managing demand will help in delivering security of supply and environmental objectives.Improved information flows for suppliers can cut their costs and improve the effectiveness of the energy market. There are a number of commercial and regulatory factors that are combining to make smart metering a more likely and attractive option for the energy market. However,the present fragmentation and uncertainty that has characterised the metering sector has,to date,worked as an effective barrier to implementation. energywatch therefore calls upon the Government,the Regulator and the industry to investigate barriers and develop and implement cost effective solutions that ensure smarter meters are adopted.Ownership arrangements and the structure of competition in metering need to be reviewed and,where necessary,reformed to facilitate and encourage the adoption of smart metering technologies.Requirements for the installation of meters capable of showing consumption in meaningful terms and being read remotely need to be developed and implemented. Such steps are necessary to realise the contribution of smart meters and smart consumer behaviour in the fight against fuel poverty and climate change,while making the GB economy more sustainable and the energy market more effectiv e. 6.1N Ireland This was driven by a need by Northern Ireland Electricity NIE to replace some 80,000 pre payment meters.NIE decide to make the new meter such that the pre payment meter was the meter of choice. The technology is based on a meter plus a separate customer interface unit.NIE now have 175,000 pre payment meter customers out of a total of 700,000 customers.The company is achieving high levels of performance on debt management and cash flow and the meters are proving popular with a wide range of consumers.This has enabled the company to offer a 2.5 reduction in charges to these customers.There has also been a definite reduction in consumption estimated at 2 3 but subject to some further research that is in progress .The new meter has also opened up the possibility for three different tariffs and there is evidence that consumers will manage load to avoid times of higher charges.NIE has not identified any significant degree of self disconnection and indeed has been able to tailor the use of extended credit to help groups such as one parent families 15 . 6.2Ontario The Ontario Energy Board OEB is requiring distributors to introduce a basic smart metering system that would measure how much electricity a customer uses each hour of the day.It is intended that through wireless communication or other technologies,the data would be transferred daily to the local electricity distributor who would use that data to charge customers an energy price that varies depending on when the electricity was consumed.Customers would have access to data by telephone or Internet the following day. The OEB does not propose to mandate a specific system recognising that what is optimal depends on many factors such as customer density and geography. The system proposed by the Board is based on two way communication though the OEB notes that this will not,in itself,provide functions such as customer display,integration with load control systems,interface to smart thermostats, voltage monitoring,earlier payment,load limiting and remote cut off.Therefore in order to improve interoperability there will be a requirement that smart meter systems have an open network interface at the connection to the wide area network.The OEB anticipates that retailers and other energy services companies will be prepared to offer enhanced services for a fee to those customers who desire extra functionality as it becomes available on these systems. The implementation plan proposes that all new and existing customers of licensed distributors in Ontario,including all residential and small commercial customers,have some type of smart meter by December 31,2010.The OEB intends to introduce a regulated price plan for residential customers with smart meters with prices that vary by time of use.In addition the capital and operating costs of the smart meter system will be added to the distributors base rate and will be charged to all customers whether or not they have a smart Meter and the costs of old meters that are stranded can be recovered. 6.3ENEL Italy ENEL the Italian electricity utility with 30 million customers embarked on a major programme of smart meter installation in 2002.The system,known as advanced automated meter management AMM integrates metering,billing and contract management.ENEL states that it can provide improved customer service by reducing metering errors and maintenance time,and by offering varied tariff structures with lower energy costs for off peak consumption.ENEL is the only utility to have applied and tested this technology on a large scale and by 2004 had installed 15 million new meters.It intends to install a further 15 million to complete the programme by the end of 2005. 6.4Sweden In Sweden electric utilities will have had to introduce automatic meter reading for billing electric energy consumption by 2009.A number of companies are active in supplying solutions including mobile phone providers such as Vodaphone who are working with Actaris the meter manufacturer.In July 2004, Iskraemeco a Slovenian manufacturer won a contract to provide more than 150,000 meters including a complete system for remote meter reading. For EEC 2 April 2005 to March 2008 all domestic suppliers are tasked with saving a total of 130 TWh of fuel standardised lifetime discounted energy benefits.This is equal to 0.7MtC of carbon emission savings by 2010. 1 TWh = 1,000 GWh = 1,000,000 MWh = 1,000,000,000 kWh Domestic electricity demand in 2003 DTI = 115TWh Domestic gas consumption in 2004 DTI = 399TWh Total domestic gas and electricity consumption = 514TWh Of the 2.5 million meters being installed in 2005,1.5 million are electric and 1 million are gas. We assume annual savings of 5 . Applied to the figures above this represents annual savings of 42.5million and 1,272,500,000 kWh of energy. At todays prices this represents an annual saving of 15 per electricity bill and 20 per gas bill or 247,500,000 kWh of electricity and 1,025,000,000 kWh of gas each year. However EEC target is fuel standardised,life time discounted energy benefits. To work out how these savings compare to EEC savings we need to make some assumptions. Assumed lifetime of a smart meter:20 yrs Discount rate:3.5 yr DEFRA To reflect different carbon intensities of electricity and gas the savings need to be multiplied by differential factor. Electricity Saving per meter:165KWh yr Aggregate saving over lifetime of meter:165KWh x 20 yrs = 3,300kWh Discounted aggregate saving over lifetime of meter:~2,400kWh Differential factor:0.8 EEC saving:1,920 kWh Gas Saving per meter:1,025kWh yr Aggregate saving over lifetime of meter:1,025KWh x 20 yrs = 20,500 kWh Discounted aggregate saving over lifetime of meter:~14,900kWh Differential factor:0.35 EEC saving:5,215kWh Therefore,in terms of EEC the meter replacement programme for 2005 would be: 1.5 million x 1,920 kWh = 2,880,000,000 KWh 1 million x 5,215 kWh = 5,215,000,000 KWh Total:8,095,000,000kWh of fuel standardised lifetime discounted energy benefits = 8.095 TWh = 6 of EEC target #font 62 "TLUVYN+GillSans Bold 154 0" Get Smart: Smarter metering the way ahead? Get Smart: 1 Get Smart: 2 Introduction Get Smart: 3 Get Smart: 4 Get Smart: 5 Get Smart: 6 Get Smart: 7 Get Smart: 8 Get Smart: 9 Get Smart: 10 Get Smart: 11 Get Smart: 12 Appendix A Get Smart: 13 Get Smart: 14 Appendix B Get Smart: 15 Get Smart: 16

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