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£938m saving is potential benefit of smart metering

“Smart metering installations could cut UK households’ electricity bills by £938 million a year,” says Dr. Howard Porter, CEO of BEAMA, welcoming the findings of an independent review of 100 smart meter pilots and rollouts across the world.

“These savings could be delivered with the current UK specifications. Smart metering systems including display devices need to be installed in UK homes as soon as possible,” he added.

The report identifies the kinds of activities and technology that are needed to maximise the customer and industry energy saving benefits from smart metering. It shows that, if the technology and customer engagement is right, hundreds of millions of pounds could be saved by consumers in Britain every year, and that smart meters could make a significant contribution towards achieving EU goals of a 20% reduction in energy use by 2020.

The report demonstrated significant reductions in the amount of energy used by consumers and when they use it. Replicating these savings in the UK will require the right approach and the right kind of technologies. It found that, worldwide, customers who received an energy display with their smart meter achieved on average an 8.5% reduction in the amount of electricity they used.

This level of saving across UK households would equate to £938 million cut from electricity bills. Lower, but still significant, reductions were achieved from enhanced bills showing detailed energy usage and web based displays. Different pricing structures and automation were effective in encouraging customers to use energy at off-peak times and reducing overall energy use when used as part of a well designed consumer engagement and education programme.

Technology was identified as the key tool to enable consumer benefits. However, the success of pilots and roll outs and the savings that customers made varied depending on socio-economic factors, consumers’ consumption patterns, rollout programme content and structure, and what customers were using energy for.

Crucially, it found that if a smart meter rollout is to maximise energy efficiency savings to customers, consumers would need to have access to good-quality support, advice and education. There will also need to be consumer engagement programmes that segment the customer base and tailor their approach and message to the needs of different types of households.

The study identified that what customers valued most, and responded to best, was an in-home display that shows them:
· Up to date consumption information (how much energy they have used between the last bill and now)
· Up-to-date cost or bill (how high is their bill since they last paid)
· Historical consumption (how much electricity have they used during this period compared to the previous periods) in a format they can understand.

In recognition of in home-displays being a crucial part of engaging consumers, BEAMA has worked with manufacturers to set-up the Consumer Energy Display Industry Group (CEDIG). This group will represent manufacturers of display products, which provide the important interface between the consumer and the smart meter.

Porter comments: “This research is very welcomed, as it provides timely evidence from around the world that well-designed smart meter rollouts reduce customer bills. The members of BEAMA supplying smart meters and customer displays to the UK market are working together to deliver solutions to allow easy customer interaction, and the best opportunities for energy use reduction and consumer savings. The interoperability of all smart metering systems is vital to allow the best customer experience and engagement. BEAMA and the industry group SSWG are dedicated to the delivery of open specifications to allow all smart metering equipment to be interoperable.”

ESMIG, The European Smart Meter Industry Group, commissioned the report from the energy think tank VassaETT to see what lessons could be learnt from international rollouts and pilots of smart metering. It looked at more than 100 different programmes with the aim of providing a source of comparative data for the smart metering industry in Europe. Drawing direct comparisons between Great Britain and other countries are not advisable because of variations such as climate, housing stock, fuel type, cultural variation and fuel type which impact the overall success of the programme. That said, there were lessons that can be learnt to help Government and the regulator design smart meter rollouts to maximise energy efficiency and consumer benefits, with the confidence that many installations have delivered significant benefits.

It should be noted that the £938 million saving is based upon an Ofgem typical electricity bill of £424 and government predictions of 26,048,000 households in the UK in 2009.

Electrical Products' Editor Paul Wolfe attended this conference and will be writing a review in a future issue of the magazine.

The image shows Dr. Howard Porter, BEAMA’s CEO (left) and Richard St Clair, Chair of the BEAMA Smart Metering Association

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