U.K.'s upcoming $17 billion project to re-wire British homes with smart meters will fail if regulated too much, say conservatives.

Gary Flood, Contributor

March 22, 2013

4 Min Read

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One of the U.K.'s most ambitious upcoming national re-engineering jobs -- the deployment of "smart" electricity meters in millions of households -- will fail unless it gets more consumer support, according to several groups. How to drum up that support, however, is being debated.

The plan is to start upgrading all domestic power meters from 2014 over a five year time-frame, a job that will cost at least £11 billion ($17 billion), according to the national energy regulator Ofgem and could involve 53 million devices going into 30 million addresses. Some companies have already begun installing the meters, ahead of the official start date.

The U.K. originally committed to the refurbish to oblige the European Commission, which wants to see 80% of EU member state houses having smart meter access by the end of the decade, part of a plan to meet its green targets. U.K. government officials decided to take the project much further, arguing a smart meter program could be a way to empower consumers to decide for themselves how they want to use energy.

[ The U.S. National Institute of Standards and Technology wants to help consumers monitor energy usage. Read NIST Targets Energy Apps With Green Button Tools. ]

"Smart meters will for the first time put consumers, who are at the heart of the roll-out, in control of their energy use," it said in a December progress report, "allowing them to adopt energy efficiency measures that can help save money on their energy bills, offset price increases and reduce carbon emissions."

The smart metering scheme can work only by having a powerful, national data communications network able to collect and transmit data wirelessly. It also needs, naturally, someone to pay for making the new boxes and plugging them in. Who exactly is doing what or how the project will be paid for is still up in the air, according to the consumer group Which?, who says the entire program needs to be rethought. Some groups also dislike the security aspects of so much user data being collected for commercial purposes.

But according to the U.K.'s Conservative Party, adhering to free-market principles is the only way to ensure the project's success. Current plans for the new metering system are too dependent on central government and not the needs of the U.K. energy market, says the Conservative Technology Forum in its report, "Power To The People."

Consumers will reject the meters because they won't be done properly due to lack of commercial incentive, said author Andrew Henderson, co-chair of the Forum's energy group. "The current policy gives guaranteed roles for incumbent suppliers and regulators but fails to reward them for investing in improved efficiency in meeting customer needs, as opposed to meeting regulatory targets," he said.

The smart meter project needs to do more to build "confidence in the benefits [for the] consumer through addressing billing accuracy, fairness and cost, security and control of the meter and data and environmental health concerns about [use of radio frequency to transmit data]," he said.

"Successful technology adoption cycles always follow the same pattern," Henderson, who is also an energy consultant, told InformationWeek. "You have the early adopters who see the advantage and are prepared to pay more. Eventually, that filters down so that the mass market takes it up. It happened in PC, mobile, and the Internet, in the consumer space. For smart energy to succeed and deliver the sort of benefits the government want from it, a similar, market-oriented, model has to be applied -- not this centrally-controlled, socialist one," he said.

A key part of a market-oriented model, says Henderson, is interoperability. "Data and communications networks must be two way, between suppliers and customers" and be deemed part of the national infrastructure, "secured and encrypted for resilience as well as privacy," he said. Such standards, he recommends, should also link to those for the "smart grid" which will make use of the data from smart meters to help reduce the generation of unnecessary power.

It is also important to realize, claims the report, that "smart meters are not an end in themselves." By this, Henderson claims their value really depends on "ubiquitous broadband, smart grid and smart infrastructure" so that the country's administrators, electricity customers and the utilities can "make effective use of the information they [will] generate".

InformationWeek's 2013 Government IT Innovators program will feature the most innovative government IT organizations in the 2013 InformationWeek 500 issue and on InformationWeek.com. Does your organization have what it takes? The nomination period for 2013 Government IT Innovators closes April 12.

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