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Smart Meters, the not so smart choice?

Will smart meters follow the path of diesel cars, a government recommendation quickly reversed?

As the internet of things (IOT) becomes less ‘Tomorrow’s World’ and more today’s tech, I pondered how useful smart meters are for the customer, and will they really be worth the £550[1] it could end up costing each household?

The government alleges that by 2020 everyone will have been ‘offered’ a smart meter though they aren’t compulsory, but we’ve heard energy companies are making it increasingly difficult for consumers to say ‘no’.

Suppliers argue that the reasons to reject a smart meter are few, and that the benefits far outweigh the drawbacks… but should we so readily trust the direction of firms who have abused loyal customers for far too long.

On the face of it the smart meter presents a reasonable case. Firstly there’s the suggestion that your bills will no longer be estimated, but instead based on real consumption readings communicated by your smart meter to the supplier directly. ‘Hoorah’ you say, no meter man turning up at my door, disturbing me when I’m binge watching Netflix! Furthermore, households can now monitor their usage live so they can see just how much gas and electricity they are using… great, I’ll delay my 8pm cuppa to 10, that should save me a penny or two. I jest… we can all benefit from knowing our usage, turning lights off when not in use and so on, but what else does the smart meter bring to the table?

Not a lot it seems. According to the Ofgem website, these two ‘significant’ features form the basis of why we are encouraged to transition from the existing generation of gas and electricity meters to the new SMETS 2 meters that are currently being rolled out. With them comes the possibility of new ‘flexible’ solutions for customers to engage in the market. Quite what those might be, and how happy the consumer will be with them, we’ve yet to see. In addition to the consumer benefits, smart meters are hailed as a key component of Britain's shift to a cleaner, more flexible energy system.

“For example, smart meters will record your energy use every 30 minutes. This means energy suppliers could offer you tariffs that reduce your charges if you use power when it is cheaper for them to buy it on the wholesale market and supply it to you, such as on a sunny or windy day."

The paragraph above is direct from the Ofgem website and alludes to ways in which smart meters might benefit the consumer, but do existing economy 7 tariffs give us some clues as to just how practical this could be in the real world?

Most of us are bound by a regular working routine, we wake up sometime in the morning, and go to bed in the late evening, spending most of the day out of the house. Whilst the internet has enabled some of us to benefit from a more flexible work schedule, the possibilities for us to adjust our energy consumption patterns significantly are relatively low, especially when you consider our ingrained physiological clock. When we look at the figures we can see that for a typical house using the national average economy 7 split the difference in annual energy costs between economy 7 and non-economy 7 tariffs isn't very big. For a large house in Yorkshire for example, average energy costs are £1,137 for people who aren’t on economy 7 vs £1,088 for those who are. If we use this information as a guide does it suggest that offering people tailored economy tariffs really does little to help reduce energy bills for households, and probably has a similarly small effect on a households ‘carbon footprint’ too.

One way to rectify this would be for households to install their own energy banks, large battery systems that could harvest energy during periods when energy would be cheaper (when renewable sources have a greater contribution to the grid) and then releasing that stored energy when the household needs it, at peak consumption times. But if we require most UK households to do this for us to shift to a ‘greener’ country one would argue that it makes more sense for the national grid to bear the responsibility of this logistical project which would do away with costly installations at household level, and most likely be more efficient too.

The very notion that knowing consumption data on a level as granular as individual households will help Britain become greener is quite preposterous. The energy needs of the country are met by understanding the supply side of the national grid, and through analysis of the amount of power generated by the various sources at particular times the national grid can know just how much power is being consumed.

Some would argue that knowing the split between business and residential use could help us better manage our energy production, but that only requires smart meters to be adopted by businesses as we could then work out the residential split by reverse engineering it from the other knowns in the equation. So why the anti smart meter rhetoric I hear you ask? Well I think the reasons NOT to get a smart meter are actually quite compelling…

Firstly we’ve already highlighted the unlikelihood that smart meters will result in tariffs that reduce the energy bill for the average household. The government, and the grid already have sufficient information to know our energy consumption patterns and tariffs like economy 7 show that, in the main, most people don’t benefit significantly from a tariff which encourages them to consume energy at more favourable times during the day.

Secondly, GDPR regulations prohibit firms from selling your data to third party firms without your express permission, but they don’t prevent firms selling aggregate data, even in packets as small as a few households.

What’s the big deal you ask? Well the true power of advertising is getting the consumer to purchase a good or service which they might not necessarily need or even want. As if advertisers don’t have enough data to conjure up even more persuasive marketing tactics, do you really want to aid their efforts with even more information? From your energy consumption data they could derive what time you use your hairdryer, to when you’re are sat in front of the tv, or ironing, or cooking. Energy consumption data contains a whole wealth of information, data that someone would undoubtedly pay for… unfortunately I don't believe the customer has much to gain from that data being sold.

Next, smart meters are like any other electronic device that communicates information. They are vulnerable! If someone manages to get access to your consumption information, they would know when someone is at home or not, and be able to create a profile of your lifestyle habits, a potential security risk for your home. We already know of thieves who have used holiday posts by people on social media from far flung locations as an indicator on when to break into an empty home. Is the smart meter an even more powerful tool for the smart criminal?

Let’s not forget the trusty meter man. I'll admit it's pretty hard to plug this point, for one I don't have much data to hand, and some will argue (quite rightly) that the jobs being created from the roll out of smart meters will outweigh those lost by meter reader redundancies. But our stance here relates to what we believe to be short-sighted programmes that have worrying socioeconomic implications. A few thousand meter readers being put out of work might not seem a big deal to the average person (unless you're a meter reader), but in the absence of any real idea of how society will function as technology eradicates the need for people, we think its wiser to make a decision that has a better outcome for social harmony in the present, than one that puts it further into disarray.

The ‘no smart meter’ movement is growing, at the very basic level customers seem frustrated with another poorly considered and implemented plan that they feel will ultimately hurt their pockets. If the government, Ofgem and energy suppliers really want us to adopt this new tech they are going to have to do a lot better at communicating the current benefits of smart meters and give us some reassurance that the proposed future benefits will materialise.

Fortunately for consumers, small suppliers aren’t under the same pressure to install smart meters, and smaller suppliers tend to have better prices. This means we can switch you into a great tariff, save you money and you’ll be under less pressure to have a smart meter installed. We continue to keep an eye on the situation and we will update you if or when it changes.

Feel free to let us know your thoughts.



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