11 May 2009 – The British government today set out plans to have new smart meters installed in all 26 million UK homes by 2020, estimating that the project would deliver net benefits of £2.5bn-£3.6bn ($3.4bn – $4.7bn) over the next two decades, in the form of lower bills and reduced costs for energy firms.
The announcement was in the form of a consultation document setting out how energy companies should manage the installation of the technology.
Industry sources say that the £7bn cost amounts to around £15 per household per year between 2010 and 2020.
The new meters will be capable of providing real-time, accurate electricity and gas use data enabling customers to reduce the amount of energy they use, switch suppliers, and ultimately take advantage of smart grid technologies. The installation of smart meters mean the end of the very unpopular estimated gas and electricity bills.
"Smart meters will empower all consumers to monitor their own energy use and make reductions in energy consumption and carbon emissions as a result," said energy and climate change secretary Ed Miliband.
Under the consultation proposals, energy companies will be responsible for the supply and installation of the new meters but a new central government body will be set up to handle the nationwide transmission and management of the data. However, the government said it would also consider two alternative approaches as part of the consultation, which would either see individual energy companies manage all aspects of smart metering, or require the establishment of regional franchises to handle the installation of the meters while the data is managed by a new national body.
The government has offered alternative approached such as a local franchise for the roll-out and management of data or outsourcing the entire role to the energy companies. The Local Government Association called for the adoption of a regional franchise approach, arguing that it will be far more cost effective to send one team to carry out installations on a street than require each energy firm to carry out installations only for its own customers. However, some within the industry are fearful that the absence of competition in such an approach will make the franchises more costly and reduce the likelihood of the most effective meters being installed.
Centrica, the UK's largest energy supplier, today welcomed the planned roll-out of the technology, which will herald the biggest revolution in energy use since British Gas converted all the nation's homes to natural gas in the 1970s.
Centrica said in a statement that replacing the UK's 47 million gas and electricity meters with new smart meters will lead to households using less energy, helped by real time cost information on screen in the home - and saving more money by using appliances at cheaper off-peak times. Smart meters will also bring a transformation in customer service with an end to estimated bills and waiting in for meter readings.
Centrica's British Gas division has the largest smart meter trial in the country with almost 50,000 homes and businesses benefiting from the new technology.
Smart meters open up the possibility of using smart grid technologies capable of turning off electrical appliances such as fridges and washing machines at times of peak energy use and make it easier to manage the electric car recharging infrastructure that is likely to be required if the government's plans for increased use of electric vehicles prove successful.