U.K. Energy Suppliers to Install 47 Million Smart Meters by 2020

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Researched by Industrial Info Resources (Sugar Land, Texas)--Energy suppliers in the United Kingdom will be responsible for the installation of 47 million 'smart meters' in 26 million households by 2020 under the final plans announced by the Department of Energy and Climate Change (DECC).

The total cost of installing the electricity and gas smart meters in all homes and most small businesses will be £8.6 billion ($14.3 billion), or about £340 ($564) per home or business. According to DECC, the expected benefits of the scheme will be an estimated £14.6 billion ($24.2 billion) in the next 20 years, with each consumer expected to save about £28 ($46) per year on domestic bills.

While the installation will be the responsibility of the energy suppliers, the communication process between the smart meter and the supply company will be monitored centrally, making it simpler for customers to switch between supply companies and facilitate the development of smart grids in the future. The U.K. government will award a contract for the centralized monitoring system.

This is in line with the government's preferred option for the rollout of the smart meter technology, known as the Central Communications Model. Other options considered by the government were the Competitive Model and the Centralized Model. In the Competitive Model, energy suppliers would be completely responsible for smart meter installation and monitoring. In the Centralized Model, regional franchises, known as Distributed Network Operators for the electricity system and Gas Distribution Networks for gas meters, would be set up to install the smart meters, while communications to and from the meters would be handled centrally at a national level.

The smart meters are designed to provide power supply companies with the ability to take remote readings of power usage and to provide consumers with accurate and constant information on actual power usage and carbon emissions. The meters will be supplied with a separate, real-time display unit that consumers can keep elsewhere in the home.

Installation of the smart meters is expected to begin with 18-month trials in selected cities and towns, before the national installation program begins in 2012-13. However, concerns have been raised about the practicality of installing such a large number of smart meters. One utility company has pointed out that if the installation process started immediately, it would need to install 8,000 smart meters each week to achieve full installation by the target deadline of 2020.

Calls have also been made for industry standards for smart meters to be established as quickly as possible in order to avoid delays in the installation process. However, the problem of developing standards for the device is not purely technical, as privacy issues have also been raised about the security of 'smart systems.'

In order to facilitate the development of an internationally coordinated framework, the European Union has developed a Smart Grids Task Force, which is scheduled to deliver a plan for the implementation of smart grids and meters by 2010. Meanwhile, three European industry associations, Figawa (Cologne, Germany), KNX (Brussels, Belgium) and the German Electrical and Electronic Manufacturers Association (Frankfurt, Germany) have submitted an open metering system specification to the European Committee for Standardization.

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