Smart meters are coming early and could save £7.3 billion

53 million smart meters are to be installed in 30 million homes and smaller businesses across Great Britain, and are estimated to have a net benefit to the nation of £7.3 billion over the next twenty years.

The revolutionary rollout is set for completion a year earlier than previously expected, in 2019.

This is the most revolutionary change in the way we use energy since the invention of the National Grid. Globally, it has been compared to the creation of the internet. The timetable is tight, but at least the financing of the operation is not dependent upon government funding.

The government's overall strategy and timetable for smart meters were outlined yesterday in a consultation document.

The programme, to be overseen by Ofgem and to be implemented by energy suppliers, will cost over £11 billion but is expected to save over £7 billion more.

Smart meters have been trialled for several years in this country, and will be a crucial part of delivering energy security and a low carbon future, by encouraging energy efficiency and awareness.

They will also lay the groundwork for the "smart grid" which is hoped to help lower peak demand, thereby reducing the number of required power stations.

“Smart meters are a key part of giving us all more control over how we use energy at home and at work, helping us to cut out waste and save money," said Secretary of State for Energy and Climate Change Chris Huhne, on his way to visit a technology expo at the SmartLIFE training centre in Cambridge, which includes companies specialising in smart meter technology.

“In combination with our plans to reform the electricity market and introduce the Green Deal for home and businesses, the rollout of smart meters will help us keep the lights on while reducing emissions and getting the best possible deal for the consumer,he added.

Smart meters are poised to deliver the following benefits:

• giving consumers real-time information on their energy consumption - eliminating estimated bills - to help them curb excess energy use, save money and reduce emissions. By 2020, the average consumer (with both electricity and gas) is expected to save around £23 per year on their energy bill as a result
• giving suppliers access to accurate data for billing, allowing them to improve their customer service and reduce costs, for example by reducing call centre traffic, ending visits by meter readers, and better debt management
• giving energy networks better information an assist the move towards smart grids.

The rollout of smart meters will occur in two phases. In the first stage, beginning now, the Government will work with industry, consumer groups and other stakeholders to lay the groundwork, including finalisation of standards, encouraging consumer engagement and piloting.

A Functional Requirements Catalogue, published alongside the consultation document, sets out the minimum requirements that the smart metering system must provide.

The Government will also establish the Data and Communications Company, under a competitive process, which will provide data and communications services for the nationwide system.

The second phase, the mass rollout, will begin in the second quarter of 2014 and be completed in 2019.

There will be a new code of practice for energy suppliers governing smart metering installations. To counter some consumer perceptions of "Big Brother" monitoring their energy use and concerns about security, consumers will have a choice over how their data is used except where it is required for regulated duties.

Worldwide, the cost of smart meter rollout has been put at £3.6 billion. A study by Datamonitor published last October, found the cost of meters in the UK would be around £57 each compared to France, where they will be around £28-£30. However, this is speculation since the exact specifications of each system have not been properly defined.