Delayed deadlines were prudent, consumer benefits clear

Published Dec. 10, 2014 Smart Grid Today By Karen Haywood Queen

Although the UK’s £11 billion (US$17 billion) smart meter rollout will start six to eight months later than originally planned, most of the country’s 53 million smart meters still should be installed by the end of 2020, British Electrotechnical & Allied Manufacturers Assn (BEAMA) CEO Howard Porter told us last week. BEAMA represents 350 firms that make grid technology, he added, including many UK firms plus a who’s who of global smart grid gear brands, according to the group’s website.

The AMI deployment is “a big mountain to climb,” said Porter, who was similarly optimistic when he spoke recently at the Smart Grid World Summit in London. “But we’re still on track by the end of 2020 to have the vast majority done. The level of cooperation among the different stakeholders is unprecedented,” he added.

The UK is working to cut GHG emissions 20% by 2020 from 1990 levels as part of the Climate Change Act of 2008. The UK AMI rollout differs from other deployments by calling for every home in the nation to have a smart meter and a consumer interface with an in-home display (IHD) of energy use, Porter said.

“The UK rollout is the most complex, arguably, in the world,” he added as he walked along the Thames near his London office. “The fact that we have a fully deregulated market with at least 20 different retailers makes it complex.”

Critics have questioned whether the rollout can be completed on schedule and have raised concerns about costs.

About 900,000 smart meters are currently in use in the UK, according to the Data Communications Co (DCC), and the current timetable calls for installation to begin, under DCC oversight, a year from now. DCC will provide the AMI infrastructure needed for smart meters to run consistently for all consumers, regardless of their energy supplier, Porter explained.

The recently proposed start of service could be April 2016, DCC said in a report it publicized last month. Now, the firm wants feedback on whether a July 2016 or October 2016 start is more appropriate.

The later go-live would allow more time for testing and would “reduce the impact of unplanned operational issues on consumer experience and cost.” The change would add up to £90 million (US$140 million) in added costs, the DCC report said.

The timetable slipped partly because a communications system, called the Great Britain Companion Specification (GBCS), that defines the messaging between the meters and DCC needs more work and testing than originally envisioned, DCC reported. Design, build and pre-integration testing will likely take until Aug 31 instead of the original plan of April 10, it added.

The organization is proposing to extend the next phase – system testing – by at least two months.

Delaying progress now to solve problems is better than pushing ahead, said Porter, who spoke recently in the House of Lords and to Parliamentary committees on the meter rollout. The three main political parties continue to be forceful in support of the rollout, he added.

“I … agree with the government, that it’s good that these systems are vetted now to make sure the systems are working as opposed to rushing ahead and finding out in the first year that things are not working – then having a longer delay to get on track,” Porter said.

Cost concerns are understandable, he added. “A number of other IT projects in the UK have gone up in price considerably,” and so it is appropriate that people are watching to make sure added costs do not grow to a level that puts too much pressure on consumers.

Critics have said the estimated £215/home (US$337/home) cost for smart metering equipment is too high. Most of the UK’s 27 million homes have two meters, one for gas and one for power.

But the government has precluded energy suppliers from charging up front for the meters. “It would be madness,” Porter said, for energy retailers to charge consumers up front. “I imagine they will amortize it over the lifetime of the meters, over a 10-year basis.”

Some retailers may even absorb up to half of the meters’ cost, he said.

Benefits of smart grid

Critics have put consumer savings from AMI at 2%/year. Porter cited an independent research study by VaasaETT this year that found an average savings in power use of 9%/year over three years.

That study qualitatively reviewed findings of six British and European consumption feedback studies with over 28,000 participants, and research from an another six British studies.

Extrapolating from the data, the UK average residential customer with both gas and power using an in-home display (IHD) would save £111/year (US$174/year), BEAMA told the press this year.

With smart meters and the IHDs showing energy use, consumers will get more accurate bills and have the chance to monitor and cut energy use, Porter noted.

QUOTABLE: You’re getting better service. You have the ability to control your energy and save energy by managing your energy better. You will be able to save considerably more, radically larger savings, than the amortized annual cost of the smart meter. – British Electrotechnical & Allied Manufacturers Assn CEO Howard Porter in an interview last week

Full deployment of smart meters also will allow more consumers to switch to paying in advance for energy use, Porter said, noting 3 million customers use pre-pay today. In the future, there will be “smart ways of paying” including via mobile phones, Porter said.

Use of IHDs challenged

Some stakeholders criticized the planned IHDs, saying that by the time the rollout is complete, most consumers will be able to get the energy use data directly onto their smart phones. But that data will be only historical data via the energy supplier – not real-time use data, he added.

Skipping IHDs would also leave out energy users who do not have smart phones or who do not fully use them, Porter said. Some 2/3 of UK residents now have a smart phone, Deloitte Consulting said in a mobile consumer report this year.

Plus, smart phones would need a consumer access device (CAD) either within them or in the home to securely link to the smart meter for real-time data, he added. Consumers certainly could have energy use information sent to their mobile phones via an app, but for real-time data, the app would need to link to a CAD.

“Currently all the work done with IHDs supports the technology we have,” Porter said. “Throughout the rollout of smart meters, the technology will change. We’ve had discussions with the government and important consumer stakeholders and the IHD is the only way to inform the consumer.”

Each energy retailer will provide its own smart meters and IHDs, all of which have to be compatible with the technical specs of the AMI.

Better integration coming

In the next 10-15 years, smart meters combined with smart appliances and other technology will let renewables such as solar panels be fully integrated into the grid, he added. “I have PVs on my roof and the system is physically wired in to my house. The energy I don’t need is put back into the grid but there is no smart use of that.

“There’s no connection between the energy production from those PVs and the energy production on the grid,” Porter said. He envisions smart meters and associated technology enabling a system where excess energy produced by PVs at individual homes could charge EVs and power smart appliances on timers targeted to come on when the energy is available.

“This would help smooth out peaks and troughs linked to renewable energy sources,” he added. “If the market demands it, technology will be delivered at consumer-friendly prices.”