Smart meters - a rough guide
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Smart meters are getting a lot of attention in the media lately. Craig Memery, Energy Advocate at the Alternative Technology Association, explains what they are and what they mean for household energy use.
Despite the tendency of governments and many energy industry businesses to lump all smart meters into one basket, the experience of the Alternative Technology Association (ATA) is that smart meters, and the networks of infrastructure required to support them, can take many forms.
As well as a number of makes and models, a diverse range of features and functions are (or can be made) available with smart meters. There are various ways in which they can allow a household or business to interact with the electricity network and these are accompanied by various tariff options.
At its most basic, a smart meter is an electronic interval meter with remote communication capability. These two features alone offer benefits primarily to distributors and retailers, however, smart meters can also incorporate features to benefit consumers, and it’s these features that ATA is strongly advocating to be included wherever smart meters will be rolled out.
Such features may include load control options, visual displays of energy consumption and generation, the ability to interface to a Home Area Network (more on those in the next issue of ReNew), better metering for household solar PV and other generators, and the ability to monitor and report the quality and safety of the energy supply to a consumer. Let’s translate some of these features into English.
 Interval meters
Traditionally, electricity supplied to homes and businesses has been metered with mechanical ‘spinning disk’ type cumulative meters which can only tell you one thing: how much energy you have used since last time you looked at the meter.
Although the cost of supplying energy to a home varies during the day, mechanical meters can’t tell you what time the energy is being used, therefore your energy retailer charges the same amount per kilowatt-hour (kWh) for all the energy you use.
Also, if you have access to an off-peak tariff (where you are charged less for electricity used for water heating or space heating at night) you need two meters and a switch with a timer.
An interval meter is an electronic meter that measures and records energy flows at regular intervals, typically every 30 minutes. This data is stored in the meter and is accessed for billing purposes, either via remote communication (making it a smart meter) or uploaded to a handheld device carried by the meter reader.
With an interval meter, a Time of Use tariff, such as an off-peak tariff, can be charged without an additional meter.
 Remote communication infrastructure
Smart meters require a network of wireless and/or hard-wired communication infrastructure. These networks will typically allow two-way communication between a meter, the distributor (who operates the electricity network) and retailer (who sells you your electricity). Remote communications can support a number of key smart meter functions, including:
- accessing meter data without having to manually read meters
- automated connection or disconnection of power supply to a property (when moving in or out of a property, or to alleviate stress on the electricity network during times of high demand)
- signalling to the distributor to alert to a power failure or possible safety issue
- switching of a controllable load, such as an air conditioner compressor or a pool pump
- sending messages to consumers, for example to advise of high energy prices if customers are on a critical peak tariff.
 Load control
Load control is the ability for the meter to operate (i.e. switch off and on) various appliances as a way of reducing demand on the electrical network. Load control may work by, for example, cycling (switching on and off for set periods) air conditioners to alleviate demand on a network while avoiding blackouts, or by shifting some loads, such as pool pumps to off-peak when energy prices are consistently lower.
Load control may be operated directly by the meter or remotely (in real time) by the network operator using the meter.
 Visual display
A visual display on a smart meter is key to making a customer aware of their energy use. A visual display for a smart meter may come in many shapes and sizes, such as: • a numerical display of power (kW) and energy (kWh) imported or exported, displayed on the face of the meter • a ‘traffic light’ type display of power consumption, with a green light indicating low power consumption and a red light indicating that it might be time to think about switching off some appliances, attached to the meter via a Home Area Network • a detailed breakdown of real-time and historical energy use data accessed by web-based portal or via a Home Area Network.
 Smart meter tariffs
Smart meters will change the way we pay for energy.
 Time of Use tariffs
With interval metering, an energy retailer can see what time of the day the energy is being used. This allows the retailer to offer a Time of Use (ToU) tariff, where consumers pay more for energy used during times of high demand and less when the demand is lower. For example, instead of paying 20c/kWh for all the energy you use, you might pay 30c/kWh during weekday afternoons, 10c/kWh overnight, and 20c/kWh at other times (these figures are indicative only: actual charges and tariff structures will vary between products and retailers).
 Critical Peak tariff.
Critical peak pricing is a Time of Use tariff where, on those few days of the year that energy usage peaks at its highest (usually hot days in summer but also on cold winter days in some areas), consumers on a critical peak pricing tariff will pay a far more (possibly ten or more times the ‘normal’ charge per kWh) which is compensated by a low tariff at other times.
The logic behind critical peak pricing tariffs is that a large amount of the capital cost of the electricity network is spent building and upgrading the generation, transmission and distribution infrastructure required to keep the electricity network operating on these high-demand days, and critical peak pricing passes more of this cost on to the user.
 Controlled load tariff.
As an alternative to critical peak pricing (or even in conjunction) some customers may have certain loads, such as air conditioner compressors and pool pumps, switched remotely to reduce strain on the network during times of high demand. In many cases, this can be done in a way that will not affect a customer’s comfort or amenity.
A corresponding tariff for controlled load customers may include a discounted Time of Use rate, or a reduced service charge.
 What do smart meters mean for householders?
Smart meters are seen by ATA as a mixed blessing for consumers. On one hand, they offer opportunities to improve energy efficiency, better inform consumers about their energy use and reward them for using less power during times of peak demand. On the other, smart meters and associated infrastructure are costly, still technically immature, and offer benefits to energy distribution and retail businesses that consumers may not gain from.
 Can smart meters save consumers money?
The cost of implementing smart meters and associated infrastructure will be passed on to consumers, so to save money for consumers the benefits need to outweigh these costs.
In Victoria smart meters are being rolled out state-wide over the next three years at a total cost of over $1billion. This cost is passed on to consumers in the form of an increased service charge which varies from one distributor to the next and from year to year; an average Victorian household will pay $53 more during 2010 and face a further $25 increase in 2011, even if their smart meter is not installed for another three years.
How any new tariff affects your total bill will depend on the daily pattern of your energy use. Choosing the right energy retail product and understanding how you use energy will be key to getting the most out of smart metering.
Any cost savings will come from reduced energy consumption, using power at different times, or choosing a tariff that gives the best value for your energy use. As mentioned earlier, with a Time of Use tariff energy will cost more during time of high demand (eg midday on weekdays) and less at times of low demand (at night).
This is great for households who can save money by shifting some of their loads (e.g. for washing) from daytime to night, and for working households where nobody is home during weekdays. Yet, people who are home during the day, including stay-at-home parents, retirees, people with medical difficulties, and whose energy use is not so flexible, may find their bills increasing if they are charged for time of use. For a number of years now, all energy customers who do not use air conditioners or heaters on high-demand days have been subsidising those who do. Critical peak pricing may be an effective way for customers who are able to avoid using large amounts of energy during temperature extremes to reduce their bills. Customers with air conditioners may benefit from a controlled load tariff, which will reduce their exposure to high peak energy prices.
 Smart meters and consumer choice
As smart meters will be rolled out (installed on a large scale) across most states and territories, relevant state governments will select which features or functions are enabled in their jurisdiction.
The ATA (along with other consumer organisations) is actively involved in advocating for the interests of its members to ensure that features which benefit consumers are included, and that expensive features which do not benefit consumers are kept to a minimum.
Distribution businesses will have the final say on which makes and models of smart meter technology are installed.
While individual households can’t opt out of having a smart meter, ideally many consumers will be able to save money through using the most appropriate tariff option, and some will be able to maximise functionality of the meter by using their Home Area Network.
In the next ReNew magazine we’ll look at:
- the problems with the smart meter rollout in Victoria. Victorian electricity consumers started paying for smart meters from January 1 this year, even though it will be at least three years until meters are installed at some properties
- the recent wins ATA has had advocating for its members in the National Smart Meter Program. ATA has been busy pushing for features that improve the value of smart meters for consumers
- Home Area Networks: the future of household energy management?
 See also
- Attribution: This page includes content from Smart meters - a rough guide, which is licensed under CC-BY-SA.
- The original content was downloaded from the Alternative Technology Association: 10:56 EST, 21 Jun 2010.