Europe starts work on making buildings smarter

The European Commission is proposing that a voluntary scheme for rating the “smart readiness” of buildings be adopted by the end of 2019. This scheme will include the development of a smart readiness indicator, and a methodology to calculate this.

Buildings are becoming micro-energy hubs, but the building sector is lagging behind in understanding the implications.

(A version of this article was published on The Fifth Estate on 10 July 2017.)

In Europe, part of the problem is a lack of high-quality data on the building stock. This is hampering efforts to reduce the amount of energy buildings use. There is no consistent data to form a baseline for the Energy Performance Certificates (EPCs) that rate buildings’ energy use.

This problem is to be tackled from one direction by the development of a voluntary “smart readiness indicator” (SRI) for buildings. The SRI would measure buildings’ capacity to use ICT and electronic systems to optimise operation and interact with the grid.

But, just as there’s no consistent data, there is also no universally accepted definition of what makes a smart building, and there are few initiatives directly linked to indicators.

So work is now underway to try to define what an SRI for buildings looks like.

Why do it?

A smart building environment connects with many processes. Source: BPIE

An SRI’s eventual purpose is to raise awareness amongst building owners and occupants of the value of the electronic automation and monitoring of technical building systems, and to provide confidence and transparency to building users regarding the actual energy and cash savings generated.

An SRI would also align building energy performance – and the current drive to create a Single European Energy Market – with another pan-European idea: the Digital Single Market.

The rationale is that digitalisation of the energy system is rapidly changing the energy landscape, allowing easier integration of renewables, smart grids and the establishment of “smart-ready” buildings.

The benefits of 'smart buildings' Source: BPIE

As with most things in European legislation, the development of an SRI is complex. It’s bound up with the European Commission’s current process to revise a directive to improve the energy performance of buildings. By 2050, the aim is to decarbonise the building stock as part of developing a secure, competitive and decarbonised Europe-wide energy system.

This revision of the Energy Performance of Buildings Directive (EPBD) was originally meant to incorporate targeted incentives to promote smart-ready systems and digital solutions in the built environment, but has since become less ambitious.

The aim is to promote energy efficiency in buildings and to support cost-effective building renovation with a view to the long term goal of decarbonising the highly inefficient existing European building stock. It’s part of a wider review of the energy efficiency legislation, combining:

• reassessment of the EU’s energy efficiency target for 2030 – which was just set at a lamentably low rate of 27 per cent
• a review of the core articles of the Energy Efficiency Directive and the Energy Performance of Buildings Directive
• reinforcing the enabling financing environment including the European Structural and Investment Funds (ESIF) and the European Fund for Strategic Investments (EFSI)

What is an SRI?

According to the European Economic and Social Committee, a smartness indicator will measure a building’s capacity to use ICT and electronic systems to optimise operation and its interaction with the grid by developing a transparent, meaningful indicator that would add value to the EPC without imposing undue data collection or analytical burdens.

Such an indicator would show how capable a building is of letting its occupants assess energy efficiency, control and facilitate their own renewable energy production and consumption, and thus cut energy bills.

A preliminary report for the European Commission’s Energy Directorate by consultants Ecofys with colleagues in a specially created consortium, said these indicators would help with the energy management and maintenance of a building, including automated fault detection; assist in automating the reporting of the energy performance of buildings; assist with data analytics, self-learning control systems and predictive control to optimise building operations; and enable buildings to become active operators in a demand response setting.

The renewable energy context for 'smart buildings'. Source: BPIE.

Ecofys with its colleagues is developing the formal definitions for the indicators as Task 1 of a series of five stages up to the proposal of the standard in April next year.

It has listed the ten services that the indicator could cover as: heating, domestic hot water, cooling, mechanical ventilation, lighting, dynamic building envelope, energy generation, demand side management, electric vehicle charging, and monitoring and control.

The SRI must be open and transparent, in order to promote interoperability, or it will not be fit for purpose. This means that companies involved cannot monopolise or impose their own proprietary standards.

Interoperability means that devices and services are able to talk to each other in the same language. Image: Ecofys

“Smart readiness” necessarily implies a readiness to adapt in response to the needs of the occupant and to empower building occupants to take direct control of their energy consumption and/or generation, for example with the management of heating system based on occupancy sensors and dashboards displaying current and historical energy consumption.

It also implies a readiness to facilitate the maintenance and efficient operation of the building in a more automated and controlled manner, for example by indicating when systems need maintenance or repair, or using CO2 sensors to decide when to increase ventilation.

According to Paul Waide and Kjell Bettgenhäuser of Ecofys, speaking at the first conference on this topic in June, “The SRI should balance the need to reliably capture the smart readiness services and functions with the practicality and potential costs of independent assessment. It needs to be practical and provide the most benefit for the effort and cost of assessment.”

Above all, they said, “It needs to convey information which is salient (meaningful) to end-users, be easy to understand and motivate them to save energy.” It will also have to apply to all types of buildings, new and old.

An example of how the indicator could work.

This development process is expected to be complete by April 2018. Anyone interested in following or participating in the development of the indicator can sign up.

David Thorpe is the author of a number of books on energy efficiency, building refurbishment and renewable energy. See his website here.

New prize to stimulate dynamic demand innovation

Stewart Reid, Future Networks Project Manager for SSE’s NINES project, says dynamic demand response will make wind power more effective and efficient.

A Dynamic Demand Challenge Prize has been launched to help meet the challenge of satisfying ever-increasing demands on the UK’s power grid, as highlighted by last week’s Ofgem report on tightening electricity margins.

The prize is the initiative of Nesta, the UK’s innovation foundation, and hopes to find new ways of managing demand to shift electricity consumption from peak to off-peak times, reducing carbon emissions and better responding to demands on UK energy supplies.

Solutions will depend upon the smart grid: new data-driven, demand side response-enabled products, technologies or services, that reduce carbon emissions by shifting energy use to off peak times or towards renewable generation.

Dynamic demand, or demand side response (DSR), is the exchange of information between electronic devices, responding to signals from the grid directly or indirectly.

It will be built into the capacity market, being created by the new Energy Bill, to can help shift electricity consumption away from peak hours where electricity consumption is high, or enable greater usage of excess electricity generation from renewables, as well as help maximise the use of the smart grid.

A number of trials are taking place at the moment through initiatives such as Low Carbon London, DECC/Ofgem’s Smart Grid Forum and the Low Carbon Network Fund.

Currently the UK’s biggest smart grid initiative is a £54 million scheme called the Customer-led network revolution in which 14,000 homes and businesses are finding ways to reduce both their energy spend and carbon emissions.

The project includes decentralised generation and demand reduction through efficient smart appliances and is trialling demand response through the combination of generation and flexibly operated appliances. It is supported by Low Carbon Network Fund, with partners UK Power Networks, Northern PowerGrid, British Gas, Durham University and EA Technology.

A new project called Smart Hooky is now trialling a range of new technologies to create a community–scale smart grid that will help Western Power Distribution understand how a rural community uses electricity at different times of the day in order to manage peak demands and let electricity networks accommodate more renewable energy.

The Dynamic Demand Challenge Prize will offer incentives, financial support and expert guidance for shortlisted projects, with a prize of £50,000 for the solution that demonstrates the most significant impact.

Constance Agyeman, development manager, Nesta’s Centre for Challenge Prizes, commented: “The Dynamic Demand Challenge Prize will support innovations that create a measurable shift in energy use. This is important because there is increasing demand on the UK’s electricity supplies and we therefore need to find new ways to manage this.”

Partners in the challenge include the Centre for Carbon Measurement, the Department for Business Innovation and Skills and National Grid. Neil Hughes, NG's head of technology, explains, “Balancing the grid will become more complex as more renewable generation comes onto the system and our goal is to help new service providers understand those challenges and develop technologies to meet that growing need”.

Jane Burston, head of the Centre for Carbon Measurement at the National Physical Laboratory notes, “Climate change and a secure, clean energy supply are two of the biggest challenges of our time. Demand side response is a critical step in supporting the shift in supply towards renewable generation. This will only be successful with engaging tools and technologies we want to use in our homes and offices.”

The challenge is open to entries from anyone across the European Union, but the solution must be applied within a UK context.

Northern Isles New Energy Solutions (NINES)

NINES is another important dynamic demand response solution that is being developed by SSE in Scotland. It aims to support Shetland’s sustainable energy future by developing and managing the electricity distribution network more effectively.

Measures used here include replacing old inefficient storage and water heaters with modern 'smart' storage heaters, and adding a new electric boiler to the existing district heating system, both of which help to balance the electricity network.

This is crucial, says Tim Rotheray of the Combined Heat and Power Association, because currently wind turbines generating electricity that is not needed at that point in time are paid constraint payments per megawatt not to feed their power into the grid.

To combat this waste, often seized upon by opponents of wind power as a reason to oppose wind farms, the power can instead be stored in the form of hot water using the systems being installed here, even diverting the power for a few seconds, as when there are spikes of generation during blustery weather.

NINES is also deploying new technology that will allow more small-scale renewable generators to connect to the network and introducing new commercial arrangements to encourage businesses to change the times at which they use most energy, similar to ones that will be in the new capacity market.

Finally, it is also installing a 1MW battery, part-funded by the Department for Energy and Climate Change, at Lerwick Power Station.

The project will help SSE plan for the replacement of its existing Lerwick Power Station, which is nearing the end of its useful life, with a smaller station than would otherwise be required.

This type of demand side response solution is already used in Denmark, for example in the Skagen District Heating system, which utilises electric as well as gas-fired CHP boilers.

Silver Springs

Silver Springs is a company which already has 10 years' experience in this area in north America and Asia Pacific. With a customer-focussed attitude to smart meters, it works directly with end users and communities and has recently established an office in the UK.

Their Oklahoma Smart Hours Programme is a demand response initiative to encourage customers to shift their energy use to off-peak hours that works by establishing local communications infrastructure and installing programmable communicating thermostats to control air conditioning units at times of peak demand.

The programme has helped 44,000 users save an average of $191 each, and delivered more than 67 megawatts of load reduction in 2012.

In the UK, another pioneer is The Ouse Valley Energy Services Company Ltd, formed by members of the Transition Town Lewes Energy Group, which includes decentralised generation and demand reduction and is currently investigating local electricity and heat distribution networks for villages and towns within the District.

The community-owned MOZES (Meadows Ozone Energy Services Company) is also delivering decentralised generation and demand reduction, with the aim of helping the community to become self-sufficient in energy use, and then to become an energy generating community.

All of these initiatives are exploring and developing models that fit with the new paradigm of using available low carbon energy in real time more efficiently, one of the chief challenges of moving to a low carbon future, that is being supported by the NESTA challenge.

Eco-projects for electric vehicles and smart grid launched

A smart grid for the Isle of Wight and cable-free electric car charging stations, two important rehearsals for the UK's low carbon revolution, are being launched.

Electric cars

In London, the UK's first Wireless Electric Vehicle Charging (WEVC) trial, backed by David Cameron and Boris Johnson, is expected to start in early 2012 and will involve up to 50 electric vehicles (EVs).

The technology employs Qualcomm's wireless inductive power transfer that enables high-efficiency charging across a large air gap - although it doesn't say what losses are incurrec by using this method as opposed to plugging in.

It makes charging an electric car at home or in an organisation's parking space a breeze. The driver simply parks the vehicle in the usual way and the system automatically aligns for power transfer, making parking easier and charging hassle free.

The trial will be based partially in Tech City, the East London cluster, and companies such as vehicle manufacturers are being invited to participate by registering their interest at www.qualcomm.com/wireless-ev-charging.

Prime Minister David Cameron called it “a giant leap forward for the electric car industry", saying he is "delighted that London businesses will be among the first to benefit".

"Creative, high-tech advances such as this are extremely important as we work to rebalance our economy," he added, "and the decision to trial this at Tech City shows confidence in the UK as an ideal place for innovation and investment.”

Justine Greening, the Secretary of State for Transport, commented that the trial is "a great example of how vehicle recharging could work in the future".

The project supplements the £30 million Government fund from the Technology Strategy Board and the Office for Low Emission Vehicles to kick-start installation of recharging points in eight areas across the country.

The Mayor of London, Boris Johnson, said he wants London to be “the electric car epicentre of Europe".

"We are already on this path with Transport for London delivering a citywide charging network,” he added.

Andrew Gilbert, executive vice president of European Innovation Development at Qualcomm said, “Wireless charging eradicates the EV plug-in cable and makes charging of electric vehicles simple and easy for drivers”.

A Wireless Electric Vehicle Charging steering committee, containing representatives from TfL, the Mayor’s office and central government will be set up to oversee the trial.

Incidentally, a fascinating new film, called Revenge of the Electric car, is being premiered this month, telling the tale of the fightback of electric car enthusiasts against the oil industry which tried to kill the idea.

It shows Tesla CEO Elon Musk putting his personal fortune on the line, Bob Lutz, GM's Vice Chair, staking the GM brand on the very technology it once tried to destroy, Nissan's CEO, Carlos Ghosn, backing a car almost no one believed could happen, and an ordinary enthuisiast who proves you can convert a car yourself.

Welcome to EcoIsland

Meanwhile, an entire British island is launching its bid to become self-sustaining in energy, water and waste treatment.

The Isle of Wight’s EcoIsland project is the largest single sustainability project in the UK.

On 15 November, next week, The Minister of State for the Cabinet Office, Oliver Letwin will help to kickstart the EcoIsland Partnership Community Interest Company (CIC), which will establish a Global Innovation Centre for Smart Grid technology to connect every building on the island to renewable energy generators.

Working with Global Partners IBM and Toshiba, it plans to join up both the current and future wind, tidal, geothermal and solar power generators on the island.

The Smart Grid initiative is a crucial part of the Isle of Wight’s aim to become the first truly sustainable region of the UK.

It also expects residents' fuel bills to reduce by up to 50%.

David Green, the CIC's CEO said: “The Isle of Wight community needs to act quickly to avert the possibility of black-outs from increased demands on the UK's electricity generation capacity.

"We are looking to use the Island’s natural resources to make it self sufficient in terms of energy, food, water, fuel and waste, enabling the community to take its destiny back into its own hands”.

Since February 2011 EcoIsland has raised the first tranche of the £200m private funding that is required to achieve its goals, and set up partnership agreements with Cable & Wireless; Scottish & Southern Electric (SSE), as Distribution Network Operator and energy supplier; ITM Power, providing energy storage and clean fuel production in the form of hydrogen for commercial and private vehicles, and Southern Water, which also aims to have a zero energy footprint through the development of renewable energy.

It has already spent £25m installing photovoltaic modules and 500 air-source heat pumps on 3,500 social houses and pioneered the use of a 'Greenback' discount card backed by 65 local companies, which helps its 142,000 residents save up to £400/yr.

By 2020 it wants the island to become a net exporter of energy and to have created hundreds of green tech jobs, as well as cutting the amount of waste it sends to landfill to zero and to stop exporting its waste off the island, in order to take full responsibility for all of its residents' needs.

Electricity market reform unlikely to stimulate sufficient investment

The Electricity Market Reform White Paper is scheduled to be published today, the most radical change to the industry since it was privatised 20 years ago, but business is worried that it still won't provide sufficient certainty to permit the required levels of investment.

The paper is designed to shake up the way the supply industry operates and allow the construction of sufficient renewable energy to help the UK generate 15% of its electricity from renewable sources by 2020, compared with just 3.3% last year. (Only Cyprus and Malta generate a lower proportion of renewable electricity than the UK in Europe.)

The projected £200bn of investment needed by 2020, according to industry regulator Ofgem, is supposed to be sparked off by a guaranteed price for low carbon electricity, including nuclear, which will be passed on to businesses and households through higher bills.

After British Gas' price hikes - gas up 18% and electricity up 16% - announced last Friday, this announcement is particularly sensitive. But such hikes “demonstrate the problems caused for the UK by our over-reliance on energy from overseas", commented Juliet Davenport, CEO of 100% renewable electricity supplier Good Energy.

Almost 60% of the energy we use is imported and the latest rises in wholesale prices are largely due to events overseas out of our control. The proposed market reforms will help to increase energy and price security, and Chris Huhne insists that they will mean a long-term reduction in bills, also because of other Government measures to reduce household energy consumption.

“Once you take the effect on bills you actually find that we're getting overall bill down in the long-run,” he told the BBC, claiming that the UK has "the lowest energy prices in Europe".

Contracts for Difference

Under the white paper's proposals, a new scheme will come in from 2014, replacing and simplifying the current Renewable Obligation Certificate, where generators of renewable power earn tradable certificates which they then sell to utilities.

This system, called Feed-in-Tariffs with Contracts for Difference, will cut support for onshore wind and favour offshore wind and is intended to provide better value for money.

An agency - yet to be decided if it is a new institution, Ofgem or a government department - will pay a top-up premium for green power above the wholesale electricity price, up to an agreed fixed, or "floor," price.

If the wholesale price were to exceed the floor price, the renewable energy supplier would have to pay back the difference to the agency, under long-term contracts designed to promote certainty for investors.

The exact price, plus the amount of low carbon electricity the agency would buy, will be set nearer the time, but may be set by auction for "mature" technologies if there are enough bidders, as with nuclear power.

Business has warned, however, that too much delay on these crucial details could seriously put off vital decisions on investment.

Existing ROC contracts will be protected from the change. Developers will be able to choose between the ROC and the new scheme from 2014-2017.

There will not be an explicit target for utilities on how much of their electricity must be from renewable sources.

HMRC has worked out that electricity bills for an average energy-intensive business are estimated to increase by 2% and 6% in 2013 and 2016 respectively as a result of the carbon price floor, but by the late 2020s bills will be between 2% and 5% lower than would otherwise have been the case.

Reducing the monopoly of the Big Six

The established energy utility companies supply 97% of the energy consumed in households, and part of the purpose of the market reforms is to reduce their stranglehold.

Tim Yeo, Chair of the ECC Committee, has said that "radical reform" of the wholesale energy market is needed to "stop the Big Six from stitching it up".

Last week, Chris Huhne, who told the BBC, “we have to break the dominance of the big six”, met representatives of small energy supply companies who want to become the big companies of tomorrow. They told him that he had to do more to encourage independent energy generators so that smaller suppliers actually have someone to buy energy from.

They asked him to force the large companies to sell a minimum proportion of their electricity on the wholesale market, which would allow independents to undercut their prices.

Good Energy's Juliet Davenport, fresh from being honoured at the 2011 First Women Awards for the Retail and Consumer sector, told Huhne that the Government "has to balance its aim of simplifying energy tariffs with allowing smaller suppliers to innovate".

She also said there must be "complete transparency around the way Big Six generate and sell energy" to "buffer households and businesses from price hikes".

Mike Benson, of Carlton Power, said that allowing small companies to compete is crucial, because the balance sheets of the large utilities "are not strong enough”. “This really is the last chance,” he said. “If the big six are given a soft run this time round, they will lock themselves in for the next 20 years as the only ones able to play in this market.”

In another effort to support community renewable energy schemes, amongst other things, the Treasury had opened a consultation on the provision of finance for them - Tax-advantaged venture capital schemes - which Chris Huhne says will ensure that "enterprise investment schemes and venture capital trusts that invest in Feed-In-Tariff schemes through community-interest companies, co-ops and community benefit societies, will continue to qualify for improved support, as will those generating electricity from micro-hydro schemes".

Support for nuclear

The Select Committee on Energy and Climate Change warned the Government on 16 May that the long term contracts envisaged by the proposed bill at that point will work for supporting nuclear power, but that "different types of contract are needed for renewables and other clean technologies".

The white paper will reveal whether the Government has listened to this advice.

The proposed market reforms could end up giving a £1 billion windfall to nuclear power developers, who are among the Big Six, helping to consolidate their position.

This is why the ECC Committee warned in its report on the proposed bill that the Government "risks distorting its reform of the electricity market merely to save political face over implicit subsidies for nuclear power, through the use of a Carbon Price Floor Support system". It "will increase costs for consumers", they said.

LibDem MPs have also criticised the subsidy and are likely to vote against it.

The ECC Committee's report said the starting point for market reform should be a "clearly defined objective to reduce the carbon intensity of electricity generation in the UK to 50g of CO2 per kilowatt hour (KWh) by 2030".

Demand management

The report also warned that "it is too early for the Government to design a capacity mechanism given the rapid development of smart meters, interconnectors and storage systems that could remove the need for 'peaking plant'".

Reducing peak demand will reduce the amount of overall generation capacity required. Traditionally, energy planning has been done on the basis of meeting peak demand. But the roll-out of smart meters, the Green Deal and other policies will help reduce these peaks.

Greg Barker told Zac Goldsmith in the House last week that "demand reduction is not like alternative forms of energy generation. We are creating a new model, and different types of indices and accounting will be necessary. We will need a robust system of measurement as well as the market mechanism."

Goodbye to coal

Another effect of the market reforms will be to stop British power stations burning coal to generate power within the next three years, which Chris Huhne insists is also vital to bring stability to household bills.

"We've got to move to low carbon sources," Mr Huhne said. "We've got to get off that oil and gas fuel hook."

Carbon emissions from new coal plants will be limited to 450 grams of carbon dioxide (CO2) per kilowatt hour of power production, meaning they must have carbon capture and storage equipment installed.

Smart grids will cut carbon emissions by over 50%

The coming conversion of the world's electricity networks to the so-called 'smart grid' (I don't think it means it becomes self-aware - at least I hope not) will cause the grid to decarbonise itself by over 50% in America.

The exact amount elsewhere will depend on many other factors, but be at least as great. This is good news for efforts to fight climate change.

The figure is in a study from the Electric Power Research Institute (EPRI) published last week. It suggests that by enabling greater integration of renewable technologies, as well as reducing consumption, the smart grid could cut US 2030 carbon emissions by a staggering 58%, against a 2005 baseline.

Over here, the EU could be powered almost entirely by renewable energies in 2050 without power disruptions by using smart grids and building new cross-border connections, according to a study by Greenpeace and the European Renewable Energy Council (EREC).

It's big business

This is going to mean very big business indeed.

Last week General Electric announced it is buying a small Irish smart grid company FMC-Tech in just one example of an intense level of business activity that is set to increase over the coming decade as the smart grid really begins to take off.

GE is acquiring the company to give it expertise in distribution automation - FMC-Tech has developed a suite of services for automating management of power distribution from the substation to the customersmeter.

The EPRI report also says that over 20 years the investment required to create the smart grid may be up to $476 billion in the US alone - that's $17 billion to $24 billion a year.

But the benefits to society will far outweigh the costs - up to $2.028 billion, EPRI says. In Britain, the savings to consumers are calculated at £7.3 billion.

The savings come because smart grid technologies will reduce the annual growth in electricity consumption to less than 0.7% over the 2008-2035 period, below the 1% projected by the US Department of Energy's 2010 energy outlook.

Put another way, if we do not smarten the grid, the average electricity bill will probably rise by 400% over the next 20 years; if we do, the increase will be only around 50%, according to Clark Gellings, EPRI fellow.

By using smart grids, utilities will also be able to lower the system voltage level and make meter-reading redundant, argues Chris King, chief regulatory officer at smart grid software provider eMeter.

Ian Marchant, chief executive of Scottish and Southern Energy, has put the cost of a European smart grid at over £150 billion and proposed that funding come from growing European pension investments. After deducting necessary costs like the installation of smart meters and new software, the net benefit to Europe would still be Euros 31 billion per year, King said.

Speaking to an IT Forum last Wednesday GE Energy Services chief technical officer Eric Gebhardt explained how his company is making "the journey to a smart energy ecosystem.”

As more renewable energy sources such as solar and wind are plugged into the power grid, their intermittent nature is forcing IT operations to change, he said.

“Infrastructure in place today has reached the end of its design life,he added. 鼎ustomers are looking to operating longer and longer with the same equipment while changing operating modes.”

General Electric's view

So General Electric is buying FMC-Tech because its technology, by providing real-time data about conditions on the grid, is able to control energy management and demand and outage management systems.

This will give much cheaper load balancing for utilities, recuing demand and managing distributed supply. FMC describes its services as "a system that delivers dramatically improved network performance at lower cost. The system consists of sensors fitted on cables throughout the network, both overhead and underground, measuring current and conductor temperature.

"Local controllers (X-NET) gather this information and deliver to a web-controller via GPRS. The overhead sensors are line powered, and the X-NET Controller can be powered by a low voltage supply or a solar panel. The system provides a platform for continuous network improvement through the application of new and enhanced software development."

General Electric's Bob Gilligan, vice president of transmission and distribution, has said that GE is developing compatible household appliances such as refrigerators that could reduce their energy use by about 25% by adjusting the timing of their automatic defrost.

He also said that the key issue for smart grids is that they will have to accommodate the gradual introduction of millions of electric cars, which will be able to store energy and also release it back when required from their batteries.

Successful smart grid trial

Practical results on developing the smart grid have come from a trial involving 25 Dutch households in the Hoogkerk district of the City of Groningen, called PowerMatching City, showing t it is possible to create a smart grid with a corresponding market model using existing technologies.

This is the first time in Europe that the results of a live smart grid community have been researched at this technological scale.

The pilot's aims were energy optimisation for the end user, reducing the grid load for the network operator, and reducing imbalances for the utility. A second phase will concentrate on the system integration into market processes like billing, charging electric transport and congestion management at the district transformer.

The underlying coordinating mechanism in PowerMatching City is PowerMatcher, a software tool that balances energy demand and energy supply.

AlertMe

In another indication of the scale of developments, energy and home management company AlertMe, which signed a £20 million deal with British Gas last year, is completing trials in many different countries including Germany, Spain, the Netherlands, Brazil, the US, Portugal and Mexico, and is looking for partners in other countries.

Its CEO, significantly, used to be head of broadband firm Tiscali, signalling how the convergence of software developers, telecommunications industry and energy that is the hallmark of the smart grid.

Mary Turner appointed a new chairman earlier this month, Ron Mackintosh, who was CEO of Computer Science Corporation's European business.

The company has a smartphone app that allows users to control their domestic appliances. This is likely to become commonplace as part of the smart grid revolution.

Some are still sceptical that consumers will be interested in managing their domestic energy in this way.

Others respond that they said the same thing about personal computers back in the 1970s who would want one?

Now, almost everyone has one.

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.