Analysis: the success or failure of the rollout of new meters will depend on the Irish consumer’s willingness to engage with the technology
Smart electricity meters will soon be installed in households and businesses across Ireland. The first 250,000 smart meters will be installed in 2019 and a total of 2.3 million meters are due to be in place by 2024. The smart meter rollout is replacing the old mechanical meters with a box of electronics containing sensors which measure and record a building’s total electrical energy consumption. The meters also contain a communications module, which allows this information to be automatically transmitted to the electricity supplier via a mobile network, so no broadband connection is required. This means that estimated electricity bills and manual meter reads by an ESB technician will soon be a thing of the past.
However, all of this comes at a cost and it’s the electricity customer who will foot the bill. As with any part of our electricity network infrastructure, the cost of smart metering will be passed onto the consumer via our electricity bills. Each of us will pay €5.50 per year for 20 years in order to cover the costs of smart metering. The Commission for Energy Regulation smart metering cost-benefit analysis report indicates that these costs are expected to be more than offset by the energy savings resulting from smart metering, with a net economic benefit for the Irish consumer.
But are smart meters really necessary? And what have experiences been like in other countries where smart meters have already been rolled out?
From RTÉ Radio One's Morning Ireland, Aoife MacEvilly from Commission for Energy Regulation, discusses the rollout of smart electricity meters
Smart meters provide us with much more detailed information on our electricity usage and, in theory, greater awareness of energy usage will promote better energy management and energy efficiency in the home. Smart metering also opens up new possibilities for dynamic "time-of-use" energy pricing, where the price of electricity for consumers varies throughout the course of the day. This changing electricity price reflects the actual cost of producing electrical energy at any given time.
Electricity is a unique commodity in that it is highly volatile and extremely difficult to store in large quantities. In effect, our electricity needs to be generated in the same instant that it is consumed. Electricity generation is far more expensive and carbon-intensive during times of heaviest demand on the national grid (for example, the evening peak demand on winter days), since dirty fossil fuel "peaking" generator plants need to be ramped up. On the other hand, electricity can be much cheaper to produce from renewable sources on windy days, and when overall system demand is lower. These factors are reflected as price changes in the electricity wholesale market, where huge volumes of electrical energy are traded daily.
Greater awareness of energy usage will promote better energy management and energy efficiency in the home
With smart meters, small users such as householders will have the opportunity to participate to some degree in the national electricity market. By adjusting their energy consumption to avoid heavy consumption during peak times, consumers will be able to avail of lower electricity prices at times when overall system demand is low and when renewable energy is plentiful. Users can adjust their energy habits in the home manually or with smart building technologies so energy savings can be achieved automatically without the user noticing any impacts.
Smart meters were trialled at over 5,000 homes in Ireland in 2009 and 2010, showing a 2.5 percent reduction in overall electricity demand and a peak-time demand reduction of 8.8 percent (full results are available here). Ireland is a relative latecomer to smart metering in the developed world, but experiences from other European countries show total energy savings from smart metering in the range of two to three percent, broadly in line with the results from the Irish smart metering trials.
While these headline figures for overall energy savings may not seem very impressive, this can translate into hundreds of millions of euro in savings from deferral of grid infrastructure investments and lower CO2 emissions, particularly if the peak electricity demand can be reduced. There is potential for greater benefits to be achieved in the future, as more small consumers install electric vehicles, smart home technologies and batteries, thereby increasing their ability to "flex" their energy consumption according to electricity prices.
However, the last time we tried to introduce smart metering in Ireland (the ill-fated Irish Water project), the result was very little public acceptance, mass protests, aggression towards meter installation teams, and the ultimate abandonment of the entire project. Is electricity smart metering likely to be any different?
Other European countries show total energy savings from smart metering in the range of two to three percent
Electricity smart meters may prove to be more publicly-acceptable, since they represent an upgrade of the existing metering technology for a service which customers are already billed for. There are also encouraging signs that the Commission for Energy Regulation have learned from the mistakes of electricity smart meter rollouts in other countries. The smart meter rollout will not be supplier-led (as it was in the UK, for example) which will result in a lower overall cost to Irish consumers and will allow customers to change their electricity suppliers easily after the smart meters are installed.
The meter rollout will be phased in such a way that early adopters (consumers who are interested in having a smart meter) will be focused on first, with the aim that they will provide a positive example to others. Consumers with concerns about smart meters can opt-out and keep their "dumb" meter, but will not have access to savings or benefits from the scheme.
Ultimately, the success or failure of the electricity smart metering project will depend on the Irish consumer’s willingness to engage with the technology. Smart meters are a critical part of our future energy infrastructure, but regulators face a huge task in persuading the public of the merits of the scheme.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ