Government unveils smart meter plans

Energy suppliers will be responsible for installing "smart meters" for gas and electricity in all homes by 2020 under final plans for the scheme published by the Government today.

The Department of Energy and Climate Change (Decc) said the smart meters, which enable power companies to take readings remotely and will spell the end of estimated billing, will save consumers money, make electricity use more efficient and cut carbon emissions.

The meters will be supplied with separate real time display units which can be kept elsewhere in the house so homeowners can see how much energy they are using, their carbon emissions and how much it is costing them.

Decc estimates that people could save around £28 a year by 2020 on domestic bills - although householders who use the standalone display units to help them use energy more efficiently could save more, for example by putting on appliances such as washing machines at night when electricity is cheaper.

Installing 47 million of the meters in 26 million homes by 2020 will cost between £7 billion and £9 billion, or around £340 per household.

However, Decc said the savings, which would be around £92 a year for small businesses, would be on top of any costs fed back to consumers.

Following the announcement by the Government, British Gas said the roll-out of smart meters would create 2,600 jobs in the company by 2012, including 2,100 experts in the field, 400 support staff and 100 managerial jobs.

The energy company, which has already run trials of the smart meters, said almost three quarters of householders trying them out were more aware of the energy use than they had been before.

Decc also published a report on the case for "smart grids" which would help manage the UK's energy supplies and demand more efficiently.

In the future, smart grids could have the capacity to manage supply that is more intermittent as more wind power feeds into the grid, for example by automatically powering down freezers for short periods when the power is needed for peaks in demand.

Energy and Climate Change Minister Lord Hunt said: "Smart meters will put the power in people's hands, enabling us all to control how much energy we use, cut emissions and cut bills.

"Smart grids will help manage the massive shift to low carbon electricity such as wind, nuclear and clean fossil fuels.

"Globally the business of developing smart grids has been estimated at £27 billion over the next five years and the UK has the know-how to be part of that."

Decc said the introduction of smart meters would be the responsibility of the energy suppliers but would be centrally co-ordinated to make it easy for customers to switch between companies and to develop smart grids in the future.

Shadow energy secretary Greg Clark criticised the "slow timetable" for rolling out the smart meters, which will be in all homes by 2020.

He said: "Yet again, the Government is delaying when urgency is needed. Smart meters are sorely needed to give families greater control over their bills and to help the UK to meet its climate change targets.

"Sticking with the same slow timetable for rollout by the end of 2020 will leave the UK lagging behind yet again.

"The industry says that it can move faster, which is why a Conservative government would accelerate the timetable for rollout to ensure every family has the opportunity to benefit from a smart meter by 2017 at the latest."

But Gary Porter, chairman of the Local Government Association environment board, welcomed the plan to provide every home with an energy display unit as part of the smart meter scheme.

"Householders will be able to take control of how much energy they use and cut back because, when you can see what you're using, you can save."

And he said: "We will need to ensure the opt-out of having an in-home display does not turn into an opportunity for energy firms to wriggle out of giving them to everyone who wants one."

Friends of the Earth's executive director, Andy Atkins, said: "A radical overhaul of the electricity system is desperately needed to help cut UK emissions - smart meters and new smart grid have a key role to play in achieving this.

"Smart meters will give consumers vital information to help them save energy, reduce fuel bills and play their part in tackling climate change.

"And a state-of-the-art smart grid will help the UK to use electricity more efficiently, develop its huge renewable energy potential and establish a low-carbon economy.

"But other measures are urgently needed to enable homes to slash their emissions, including a comprehensive nationwide programme to cut energy waste and generous cash incentives to encourage householders to install small scale renewable energy systems."