Smart meter revolution will cut energy cost

Every household in Britain should by 2020 be able to cut its energy bills and carbon footprint using "smart meters" and handheld devices to control energy use closely, the government said today.

Britain plans to replace all existing electricity and gas meters -- often clunky objects hidden away amid domestic clutter in dark understairs cupboards - with easily viewed devices that show consumers exactly how much energy they are using, including by individual appliances.

The hope is users will change their behaviour to save money.

The meters will also help homeowners sell electricity from green technologies like roof-top wind turbines back to the grid while improving energy demand forecasts and network management.

"The meters most of us have in our homes were designed for a different age, before climate change. Now we need to get smarter with our energy," Energy and Climate Change Secretary Ed Miliband said.

"Smart meters will empower all consumers to monitor their own energy use and make reductions in energy consumption and carbon emissions as a result. Smart meters will also mean the end of inaccurate bills and estimated meter readings."

The government estimates that smart meters could deliver net benefits of between 2.5 billion pounds and 3.6 billion pounds over the next 20 years.

In April the government set a 2020 target to cut greenhouse gas emissions by 34 percent compared with 1990 levels, making it the first country to bind itself to a framework for emissions reductions.

But the necessary renewable energy growth and efficiency improvements have been small.

A consultation on how to install and run smart meters across the country will run until July 24, 2009. The Energy Retail Association of Britain's biggest suppliers said the government should follow up with swift action to get the meters rolling.

"We're delighted that the Government has finally announced its commitment to enable energy companies to put smart meters in every home," Garry Felgate, Chief Executive of the ERA, said

"However, we are still waiting for more detail on the meters themselves and the timetable for the project."

THREE OPTIONS

The government said it would prefer energy suppliers to install and maintain the devices, while communications with them would be coordinated by a third party across Great Britain.

The other options being considered are for energy suppliers to manage all aspects including communications, or where regional franchises manage installation and operation with communications managed nationally.

British Gas, which is trialling the meters in almost 50,000 homes and businesses, backs the government's choice.

"We believe the central communications model is best for customers, as it will speed up the roll-out of the technology by almost four years," Phil Bentley, the managing director of Britain's biggest energy supplier said.

Smart meters are seen as a first step towards creating "smart grids" where consumers can adjust electricity use to benefit from cheaper energy at times of low demand, including charging electric cars, and reduce consumption at peak times.

The older meters, many installed in the 1970s, show the total amount of electricity and gas used since installation.