Clever clocks - introducing smart meters

Measuring environmental attitude March 2008

Issue 4

Introduction
The recent rises in gas and electricity prices have nudged the average household fuel bill to around 1,040. More than ever, saving energy is one of the simplest ways for people to dramatically reduce their energy costs. The Energy Saving Trust is already providing millions of people a year with personal, specific energy saving advice. This is making a difference. People are now installing cavity wall insulation, buying energy efficient products and generally trying to use energy more frugally. However, one of the fundamental barriers stopping individuals from saving energy is that they dont understand how the energy they use at home relates to their gas and electricity bill. Our research shows that around a third find their energy bill not easy to understand and 82 per cent dont even know what energy

tariff they are on.

On top of this, you almost need a manual to understand what the dials and numbers on your gas and electricity meters actually mean. Thats, of course, if you can locate the meters in the first place, as theyre often tucked away - out of sight under the stairs, or in the garage.

Soon estimated bills will be a thing of the past - with a smart meter you pay only for the energy you use

We know from trials conducted in the 1970s that giving people simple, easy to understand feedback about how theyre using energy at home helps them to lower consumption. And, whilst unfortunately the

The installation of a smart meter would be carried out by professionals unlike clip-on displays - which must be fitted by the homeowner.

Smart meter technology is only marginally more expensive to implement than clip-on displays. Based on a UK-wide rollout, the initial estimates put the installation cost of a smart meter at between 100 - 200. Ultimately, smart metering has the potential to change how every household in the UK views and uses energy. Smart meters are also relatively future proof as their software can be upgraded something that is not possible with clip-on displays. Trials across the world have demonstrated that smart meters can achieve between a five per cent and ten per cent reduction in carbon emissions. If the UK really has aspirations to be a world leader in the fight against climate change, then smart meters have to be part of the solution. Thats why the Energy Saving Trust strongly supports the installation of smart metering in new dwellings and during major refurbishments, as well as a programme for full-scale rollout completed within five to ten years.

Ultimately, provide feedback of this kind on a smart metering UK-wide basis, fortunately it does now. To this effect, the UK has the potential Government recently announced it to change wanted energy suppliers to make clip-on displays available to how every households free of charge on request. household in the This device clips onto the cables UK views and uses coming out of the electricity meter and gives a near instant reading of energy
technology didnt exist then to the energy being consumed - at any given time - via an electronic display. Whilst clip-on displays would give people a rough guide to their electricity usage, the Energy Saving Trust would like to see the Government be bolder and offer the support necessary to enable smart meters to be rolled out on a UK-wide basis. What is a smart meter? Well, in appearance they are similar to clip-on displays as they have an electronic display, which details energy consumption and the financial and carbon costs. Where they differ is that they offer two-way connectivity with the energy supplier and not only for electricity, but gas too. This means that the energy cost displayed would exactly match what you owed to the energy supplier. So, consequently there would be no need for the supplier to send someone round to read your meter, or provide you with potentially inaccurate estimated bills. It also means you would never need to take meter readings any more. And one of the most exciting aspects of smart meters is that they will make it viable for those consumers with microgeneration technologies in their home to sell back excess power to the grid. Another advantage is that the smart meter offers the opportunity to track energy usage over set periods of time (for example, a day, a week, or a month), meaning you could easily identify when consumption was at its greatest and which appliances were the major contributors. The upshot of having this information would be that it would allow you to know where the greatest energy saving opportunities are. Not only that, but because the energy supplier would also be able to see this information, they would be able to offer you bespoke energy saving solutions too. The display element of the smart meter is portable and wireless,

meaning it could be kept in any room in the house.

Philip Sellwood, Chief Executive, Energy Saving Trust www.energysavingtrust.org.uk/aboutest/blog

So where are we now?

There has been a slight rise in consumer attitudes towards the environment from 3.28 to 3.39 since the last Green Barometer report. Interestingly, Wales has seen its score drop to 3.09 the lowest of all the nations whilst England, Scotland, and Northern Ireland have seen their attitudinal scores rise. The actions taken to help the environment score has risen substantially since the last report, from 1.96 and 3.17. This can be attributed to the increased number of boiler installations over the winter months. Whilst this is an expected seasonal variation it highlights the importance for consumers to check and service their boilers before the colder months arrive. There has also been an increase in the number of energy saving light bulb installations since the last report.

There has been a slight rise in positive consumer attitudes towards the environment

UK attitudes towards doing something to help the environment:

The attitudinal basket is made up of seven views, on

5 Positive 4

which people were asked for their level of agreement. These are: Climate change will affect me and my family

3.39

3 2 1 Negative

If the government wants me to do more to conserve energy, it needs to start letting me know what I can do The government isnt doing enough to tackle climate change - so why should I? I can feel a growing pressure to change the way I live to reduce the impact of climate change There is a real link between the energy I use at home and climate change The UK should do more to lead the world in fighting climate change I feel so strongly about the environment that Ive stopped buying from the organisations that I think damage it

UK actions taken to help the environment

5 Positive
The behavioural basket is made up of seven measures which people could take to save energy. These are: Installations of cavity wall insulation Installations of loft insulation Installations of condensing boilers The number of people claiming to turn off lights when leaving empty rooms The average number of energy saving lightbulbs per household The number of people claiming to turn their TVs off standby The number of people claiming to consciously walk rather than take the car for at least one journey in the past week

3.17

3 2 1 Negative

3.54 3.59
UK attitudes - nation by nation

3.41
3.06

What is a Smart Meter?

Smart meters are the next generation of energy meter. They will display accurate real-time information about the amount of gas and electricity you are using at home.

Export excess electricity generated by solar PV back to the grid with smart meter used to measure the amount

Two-way communications between the energy supplier and the household. Communication via powerline, radio, mobile/GPRS technology providing accurate timely billing

Smart meters:
the key benefits and opportunities for the consumer and energy supplier
Frequent data on energy consumption (both gas and electric) Time of use data Historical use data Differential tariffs based on time of use Greater control over peak demand Ability for supplier to communicate with consumer e.g. energy saving messages Accurate and timely billing Net metering for microgeneration Improved security of supply Ability to switch between credit and pre-payment functions

In-home display of real time energy consumption

86% said the

smart meter would encourage them to turn down their heating

Why smart meters?

Studies on how people perceive and relate to energy consumption in the home were carried out as long ago as the 1970s. They involved simple experiments that looked to see whether giving people an idea of their previous days energy consumption would affect how much energy they used. What these simple tests revealed is that feeding back to people how much energy they were using resulted in them lowering their consumption.
Further studies showed traditional billing is inadequate and does not provide people with sufficient detail to enable them to make a choice. A Kempton and Layne 1994 study remarked -consider groceries in a hypothetical store totally without price markings, billed via a monthly statementHow could grocery shoppers economise under such a billing scheme?(1)

Looking abroad
Despite the market dynamics being different to those in the UK, much can be learned from the trials and rollout of the technology in other countries. The table below outlines just some of the smart meter trial results. (2)

Location Ontario Hydro One customer display trial Northern Ireland Prepayment meters Eastern Australia Trial by Country Energy Sweden Trial (Birka Tecknik og Miljo) USA Trial (Niagara Mowhawk) Canada Trial (1992)
California Trials aimed to reduce peak demand;
full rollout by 2006

Energy saving 7% - 10% 3% - 10% 0% - 25% 20% 3% - 27% 12% 0% - 4%

Looking at the UK
Our own UK consumer research, carried out in February 2008, shows that nearly a third (32 per cent) of householders found their energy bill not very easy or not at all easy to understand, making it the least understood of all the household utility bills / statements as the table below shows.

Household utility bill/statements - how hard are they to understand?

percentage of people who found them not very easy, or not at all easy to understand

Hardest to understand
Energy bill 32%

Water bill

19%

Phone bill

16%

Credit card statement

8%

Bank statement

8%

Cable bill

7%

Easiest to understand

10

15

20

25

30

35

40

When you consider that 82 per cent of people dont even know what energy tariff they are on, it means that currently UK householders simply do not have the means to easily understand how using energy in their home impacts both financially and environmentally. Smart meters are the solution to this problem. The international trials demonstrate that. And consumers want them too - with nearly half (46 per cent) saying theyd be interested

in having one installed and of those interested, 96 per cent would use it to save energy. Also encouragingly, given that heating is the major energy cost in the home, 86 per cent of people said the smart meter would encourage them to turn down their heating thermostat by one degree.

This table shows that people view the main benefits of the smart meter as more accurate billing, and being able to know at any point what their energy use, carbon emissions and current spend is. Likewise, people clearly identified with the fact that having a smart meter meant the irritation of waiting for someone to come round and read the meter would become a thing of the past. But what this table also tellingly reveals is that people are keen to understand their energy consumption and want accurate advice on how to reduce usage. The Energy Saving Trust already offers householders energy saving advice based on a number of personalised factors, such as house type, number of rooms, household appliances and total expenditure on energy. However, what no-one has done before is provide advice based on patterns of energy consumption. Having a smart meter will make this possible. It is exciting to think that an energy supplier could analyse on which days, and at which times a household was consuming the greatest amounts The Energy Saving Trust estimates that the mandatory roll out of smart meters across the UK would help each household to lower their energy of energy and then offer bespoke energy saving solutions. Going forward another key benefit of having a smart meter is that it will enable people who have microgeneration technologies in their home to receive an accurate reading of the level of energy they are exporting back to the grid. bill by five to ten per cent. With the installation of a smart meter likely to be around 100 200 it will be important for these costs to be fairly distributed across industry and households over the lifetime of the meter. Even taking the conservative assumption that smart meters would only help to lower the average household energy bill by five per cent this still equates to a saving of 1.2 billion pounds worth of energy and a reduction in carbon dioxide emissions by 7.4 million tonnes.
Based on the percentage of people who mentioned the benefit

The benefits of smart metering

More accurate billing

54% 35%
32%

No need to have the meter read Energy supplier can give accurate advice by analysing exact usage Provides ways of visually tracking usage trends e.g. weekly, monthly, or on internet Helps monitor usage in an area to prevent power cuts in times of exceptional strain on the national grid

26% 21%

Smart metering would enable the user to know exactly how much their energy was costing

A closer look at the smart meter consumer survey - nation by nation

How interested would you be in having a smart meter installed in your home?
Quite or very interested

Scotland 50%

England 47%

Wales 45%

N Ireland 20%

Would you use the smart meter to help reduce your energy use?
[Base: Of those who were 'quite' or 'very interested' in having a smart meter]

Scotland
Yes

England 96%

Wales 96%

N Ireland 94%

92%

Which of these would you try doing?

[Base: All those who said they'd use the smart meter to save energy]

Scotland
Turning television off standby Turning computers/printers off at the mains plug Turning heating thermostat down by 1 degree Turning lights off when not used in rooms

England 76% 74% 85% 81%

Wales 88% 79% 92% 83%

N Ireland 75% 75% 81% 75%

67% 72% 94% 79%

Which, if any, of of these subsequent smart meter benefits appeal to you?

Scotland
No need to read the meter/have someone call to read the meter for the purposes of your energy bill Get accurate bills by paying for actual usage and not estimated usage Energy supplier can give accurate advice by analysing exact usage Provides ways of visually tracking usage trends e.g. weekly, monthly Can help manage usage in an area to prevent power cuts in times of exceptional strain on national grid (e.g. by sending out text messages advising when best to use appliances in the next day)

England 38% 56% 33% 27%

Wales 21% 43% 21% 13%

N Ireland 12% 26% 19% 11%

25% 49% 35% 28%

17%

22%

11%

27%

How easy do you find it to understand your energy bill in relation to the link between usage and the amount charged?
Scotland
Not very easy Not easy at all

England 20% 13%

Wales 14% 5%

N Ireland 39% 4%

21% 8%

Do you know which energy tariff you are on or how much you pay per unit?
Scotland
Yes

England 19%

Wales 16%

N Ireland 7%

13%

Methodology
1,219 households were interviewed during February 2008. Interviews were in the home and conducted face to face. The sample is representative of the UK population. The survey is a quarterly national tracker of behaviour and opinion run by the Energy Saving Trust.

References
1. The effectiveness of feedback on energy consumption: A review for Defra of the literature on metering, billing and direct displays - Sarah Darby (2006), Environmental Change Institute, University of Oxford 2. The consumer's energy analysis environment - Kempton W and Layne LL (1994)

Energy Saving Trust, 21 Dartmouth Street, London SW1H 9BP Tel 020 7222 0101 www.energysavingtrust.org.uk CO135d Energy Saving Trust March 2008. E&OE.
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