Smart meters or smart consumers?


altThe government, in its wisdom, has now announced plans to install "smart meters" in all homes across the UK by 2020. These would allow consumers to see what their actual gas and electricity consumption is at any time, and also do away with meter readers, as readings can be collected wirelessly by the supplier. There would also - in principle at least - be no need for call centres to deal with complaints or revised readings.

The cost is estimated as £7bn, or roughly £15 per household for each year from 2010 to 2020. Energy companies claim that £10 of that would be funded by their own cost savings, while the remainder would be more than offset by savings made by more aware consumers. Maybe, but experience suggests that costs are probably underestimated and savings overestimated. For example, it seems inconceivable that all 26 million electricity and 22 million gas meters would work perfectly all the time, so call centres would still be needed to some extent. And what will be done about the people who have prepayment meters?

Experience also suggests that smart meters will polarise people into those who become obsessed with turning off all possible devices (but many of whom are probably already obsessed by energy saving) and those who simply ignore them. The impetus for the move comes, not surprisingly, from the government plans to reduce carbon dioxide emissions. The claim is that energy use would be reduced by 2%. The likelihood is that such savings will not materialise and, by the time all the meters have been fitted, carbon dioxide will no longer be seen as the driver of climate change. The energy companies (and smart meter manufacturers) will gain, but meter readers and call centre employees will lose.

Martin Livermore is the Director of The Scientific Alliance