Smart meters: a new frontier for the energy industry
By Mark Daeche, CEO of First Utility
We are currently entering a real period of reform in the energy market. Government bodies such as DECC and Ofgem are investigating the possibility of significant change across a variety of energy industry issues, the key aim being to better meet consumer demands and changing environmental and economic factors.
As the leading independent energy supplier (the largest number of customers after the ‘Big Six’ energy suppliers), First Utility has played a key part in contributing to these various consultations. This includes DECC’s Electricity Market Reform proposals and how the UK’s energy market may need to be revised to encourage greater liquidity, and ultimately greater competition in the energy marketplace.
One of the other areas of the reform in which the company has played a pioneering role is the modernisation and updating of the UK’s energy metering infrastructure, through the implementation of the first national roll-out of smart meters in the UK.
A smart meter is a modern metering device which replaces the outdated ‘dumb meters’ that most UK households still use to measure energy usage. The key difference with smart meters is that they measure energy usage in a far more detailed manner than traditional ‘dumb meters’, with the capability to remotely and automatically read energy consumption, sending the information back to the energy supplier.
Smart meters have been around for over a decade in some European countries. Sweden, Spain, France and Italy have all embarked on national smart meter installations and smart meters are also commonplace in America. The UK however, has until recently, remained woefully behind the rest of the world when it comes to smart metering. Italy, which undertook the world’s largest smart meter deployment almost a decade ago, when Enel SpA, the dominant utility company in Italy with 27 million customers, deployed smart meters to its entire customer base. This example is almost twenty years ahead of the UK plans which currently state a mandatory smart meter roll out will not take place until around 2017 – 2020 despite the Coalition Government focusing considerable efforts on energy in the last few months.
|100| ENVIRONMENT INDUSTRY MAGAZINE
As Chris Huhne, Energy and Climate Change Secretary, said recently: “The era of cheap, abundant energy is over. We must find smart ways of making energy go further, and value it for the costly resource it is, not take it for granted." Let’s not forget, being able to measure what you’re using in the first place is a key part of any subsequent control or reduction efforts.
However, despite the generally lethargic attitude of the UK’s larger energy suppliers, challenger energy firm First Utility identified what it considered a significant opportunity in smart metering. Launching in 2008 initially offering a regional approach to its smart meter roll-out, it commenced a national implementation of the technology in 2010, offering free gas and electricity smart meters throughout the UK against a backdrop of growing consumer interest in the technology and the benefits it offers.
Smart meters identify consumption in far more detail than a conventional meter and communicate this information via a mobile network back to the relevant energy firm for monitoring and billing purposes. In the case of First Utility’s smart meters, the meter can take half-hourly readings for electricity and daily for gas. These readings are then sent daily to our head office using SMS which means regular accurate readings. The result is a range of benefits for the consumer.
The primary benefits of smart meters include providing the customer with 100% accurate usage information therefore guaranteeing that customers only ever pay for what they actually use. As a result, customers pay for the actual energy they have used that month as opposed to building up large over or under payments as a result of a rigid monthly direct debit to their supplier. The detailed consumption information that the smart meter provides can also be used to present the customer with a very detailed picture of their energy usage. This information can be accessed through First Utility’s online portal, enabling the customer to clearly see when they are
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