Limited smart metering proposals set out

Plans to roll out smart meters to all gas and electricity customers within ten years were outlined by the government last week

From May 2008, energy suppliers will be required to provide a “real-time display” unit when installing new or replacement electricity meters under the latest proposals from the Department for Business, Enterprise and Regulatory Reform (DBERR).

In addition, for two years, starting no later than May 2008, suppliers will have to provide free displays to all households requesting them.

The government considered a wider roll out providing displays to all customers over five years, but does not think that the manufacturing capability exists to meet this demand. DBERR also thinks a limited roll out would deliver the most cost-effective emissions reductions because customers that ask for displays are the most likely to use them and adapt their behaviour. It estimates that around a quarter of households – up to five million – will request displays.

Gas and electricity suppliers will also be required to install smart meters in all but the smallest businesses within the next five years. Smart meters are more sophisticated than the displays and allow two way communication between the customer and the supplier.

The government is sticking with its plan for all gas and electricity customers to have smart meters and visual displays within ten years, and is weighing up whether to require all new and replacement meters to be smart, or whether to simply require suppliers to ensure that they are installed by a set time.

Energy suppliers would also have to improve their billing and provide customers with historical data so they can compare their energy use from one year to the next.

Taken together, these measures should save 1.5 million tonnes of CO2 a year in 2020. They would cost energy suppliers around £13 million a year, but save their customers over £80 million in smaller bills.