Smart energy

Smart meters: powering the new economy

As a nation we are becoming more and more reliant on electricity to power our lives.

Whether this is through the expanding range of gadgets in our homes or the predicted rise of electric cars – our energy demands are set to rise. 

This week we published a piece of research conducted by the Centre for Economics and Business Research on Powering Future Cities, which details the rise in demand that UK cities will face over the next twenty years.  

Keeping up with these new demands will be a big challenge, but also presents some important opportunities. 

Smart meters and smart technology could help us as a nation meet these demands, ensuring the long term security of our energy infrastructure and helping us better-integrate renewables into our energy mix.

Policy makers are already thinking about new ways to manage Britain's energy demand. From the National Infrastructure Commission’s vision of Smart Power to the development of smaller-scale energy generation in local areas, the advent of a smart meter in every home is creating newly integrated energy communities, using new energy data as a platform for innovation.

Smart meters are here 

By 2020, every home and microbusiness in Britain will have been offered a smart meter by their energy supplier, at no additional cost. By establishing a digital connection between the home and the energy supplier, these new meters are bringing an end to estimated bills and showing us in pounds and pence what we’re spending on gas and electricity. They’re replacing traditional energy meters ticking away under the stairs in a language of kilowatt hours that few understand - one of the things holding us back from behaving as fully empowered consumers in this market.

Change is coming, and the national rollout is well underway, with over 3.5 million smart meters already installed. 

Our Smart energy outlook, an independent piece of research into the experiences of over 10,000 people conducted by Populus twice each year, has found that 80% of smart meter users are taking steps to use less energy, and 76% are more conscious about the energy they use. Nearly four in five smart meter users say they would recommend one to others.

The benefits of smart meters are even wider than the way they’re transforming individual experiences. Smart meters are digitising Britain’s last analogue industry, and will deliver both energy savings and system efficiencies of £6billion to the economy while saving 32.7 million tonnes of carbon dioxide.  

The smart energy grid

For the first time, we will have data on our energy use. Our energy networks will use this data, aggregated to postcode level, to better understand peaks in energy demand, and to identify power cuts more easily. 

Better data on how we’re using energy is essential as more of our energy starts to come from renewables – which by their nature are intermittent, generating when the wind blows or the sun shines. 

More sophisticated ‘time of use’ pricing will then empower households to play an active role in managing demand, via tariffs which offer cheaper energy when demand is lower or supply from intermittent renewable sources more plentiful.

Other countries are embracing this. In Texas, for example, to use up the surplus of wind energy at night time, a new tariff was introduced offering free energy to customers at night.

Smart grids mean a cheaper and more reliable energy supply. In its report, Smart Power, the National Infrastructure Commission said that moving to a smart grid could save consumers £8bn per year. 

Driving forward the low carbon economy

Operating a smart grid will allow Britain to fully benefit from low carbon technology like electric vehicles.

The electrification of transport will be a big driver of energy demand in coming years, but also essential in helping to tackle air pollution in cities. 

But the take up of electric vehicles will needs to go hand in hand with the development of a smarter energy grid. Cars will need to charge ‘smartly’ to avoid unmanageable pressure on the grid at peak times such as the end of the working day.

Electric cars are just one part of the broader smart home. Smart appliances like washing machines, freezers and dishwashers may also in the future make decisions about when to use energy – communicating the smart meter and drawing energy when it is cheapest.

Cities like Groningen in the Netherlands are already trialling this sort of approach with great success. Households are empowered to choose the sources of energy they use, including buying it from their neighbours who may have solar panels, and also selling excess energy back to the grid or to other residents.

Digital opportunities 

The opportunities of smart energy data goes far beyond the energy sector. Smart technology is opening up potential for innovators in every possible field to use new data to develop new services.

The UK's digital economy is the largest and fastest growing in the G20 and already makes up over 10% of our GDP. In the future, we are likely to see a whole host of innovative new services which use energy data. These could include the next generation of price comparison and switching websites using your smart meter to automatically switch consumers onto the best tariff – even hour by hour.

Smart meters could connect to fitness monitors and sleep trackers, turning the thermostat down to a lower temperature when you go to bed.

Data could be used at a local level by a fuel poverty charity to identify households who are regularly self-disconnecting from their energy supply. 

And it’s not just in energy that this data can provide insight and innovation.

Getting a better understanding of people’s energy behaviours could be applied in areas like health – allowing carers, agencies or relatives to keep an eye on those they care for. Changing patterns of energy use can help identify if an elderly relative hasn’t switched their kettle on in the morning as they usually do – prompting a carer to check in on them.   

Smart technology and smart meters will be transformational, and are unlocking exciting new areas for economic growth in the low carbon economy. 

Claire Maugham is Director of Policy and Communications at Smart Energy GB

The views expressed in this article are those of the author, not necessarily those of Bright Blue.