Page last updated at 07:11 GMT, Monday, 11 May 2009 08:11 UK

New smart meter plan is unveiled

By John Moylan
Business reporter, BBC News

Lloyd and Susannah Matthews have been trialling the meters

The government has unveiled plans for every home in Britain to be equipped with smart meters by the end of 2020.

Smart meters allow suppliers to remotely record customers' gas and electricity use, and let consumers see how much energy they are using.

Some 26 million electricity and 22 million gas meters will need to be fitted at a cost of £7bn.

Smart meters end the need to dispatch meter readers, meaning huge savings for energy firms who hope bills will fall.

It is also hoped that smart meters will mean an end to estimated bills and call centre staff who deal with related complaints.

British Gas said the move would reduce the UK's energy use, cut carbon emissions and save customers money.

Cost savings

Energy providers will have the responsibility to fit the meters in what amounts to the biggest programme of work since British Gas converted appliances in 17 million homes to natural gas back in the 1970s.

Industry sources say that the £7bn cost amounts to around £15 per household per year between 2010 and 2020.

I've managed to save about a tenth, both on energy and gas, since having the smart meter because its made me conscious of the energy I'm using
Smart reader user Lloyd Matthews

But £10 of that will be accounted for in cost savings by the suppliers. That leaves the customer picking up the other £5.

But the average consumer is also likely to save 2% to 3% off their energy use each year, and thus cut £25 to £35 off their bills.

So overall, households could be better off to the tune of more than £20 a year.

The government believes we could all save around 2% of our energy use. That would cut £100m from our bills by 2020. It could also reduce our C02 emissions by 2.6m tonnes.

A new industry-backed Central Communications body will be established to handle all the meter reading data.


One of the smaller energy companies, First Utility, has already installed smart meters in the homes of its 10,000 customers.

The firm's chief executive Mark Daeche says the lower running costs allow the company to offer competitive prices.

"Of course it is a benefit to us," he said.

"We can provide lower prices as we don't have the overheads of supporting a customer with lots of customer service."

Lloyd Matthews and his wife Susanna live in East London. They are EDF Energy customers and they have been using a smart meter for the past two years.

The meter comes with a display unit that shows Mr Matthews exactly how much electricity and gas he is using. He can also compare his energy use on a daily, weekly or monthly basis.

Mr Matthews says that knowledge has enabled him to reduce his energy bills without hampering his lifestyle

"I've managed to save about a tenth, both on energy and gas since having the smart meter, because its made me conscious of the energy I'm using," he said.

The government is to launch a three-month consultation process on the plans.

BBC News asked for your comments regarding this story. Here is a selection of some of the ones we've received.

e-mail sent in by reader

I cannot see how these meters will benefit consumers, other than a small minority who have the time and inclination to sit studying their consumption on a daily basis. And, why should we have to meet the cost of meters that are being forced upon us ?
John-Paul Buck, London, UK

e-mail sent in by reader

Trust the Government to install 10-yr old technology, 20yrs old by the time it's finished. If we're looking that far ahead we need a system that raises prices according to demand and will work with smart appliances, that will turn themselves off when the price is above a threshold.
Mark Wigmore, Guildford UK

e-mail sent in by reader

Energy manager for WSCC since 1985 - I wish i had confidence in this scheme - the fact is we stopped getting the information we need to manage energy when meter readers were dispensed with and bill information was reduced to 2 yearly reconciliation our present information is absymal - why not use the money to employ and train local meter readers to advise on energy saving and provide them with a performance related incentive scheme? - we'll then begin to move closely to truly sustainable improvement
John Hoyland , Boxgrove West Sussex

e-mail sent in by reader

Interesting to note that a recent attempt by the Dutch to make these meters compulsory was withdrawn after objections on the grounds of privacy. These meters can provide continual monitoring and energy usage can show if the house is occupied, when it is habitually empty, etc.
Roger James, Brighton

e-mail sent in by reader

I can't wait to have a smart meter - I'm very keen to know where all my bill money is going, and what I can do to reduce it. I'd be happy to pay £10 or so as I'm sure it'd result in me saving money as I find things that are wasting electricity and switch them off or replace them.
Alex, UK

e-mail sent in by reader

We've been asking (begging) for one of these for over 8 years now. Our meters are in an awkward location. Meter readers often arrive at an inconvenient time (and are pushy or rude when you tell them you'll call in the reading) - I've lived in other cities where remote readings are done - it's a huge convenience for the customer. It's about time we finally joined the modern age in the UK.
Alexis, London

e-mail sent in by reader

Question. When you have your electricity meter at the front of your house and your gas meter at the rear of your house how is the meter box to be connected when you have solid floors? Will it be another rushed installation by so called engineers who run cables round your rooms pinned only to the skirting boards and then run up the wall to your new meter?? No doubt it will be the house holder that will have to pay to have the cables set in to the wall to hide them. Or will the power company's move their existing meters to one central location - no doubt that will be too troublesome for them.
James Swann, Macclesfield Cheshire

e-mail sent in by reader

I think this is a good idea. My electricity and gas company have in the past, without my permission increased my direct debit because they have over estimated the energy I have used. They then blamed it on me for being out or not sending them the meter readings on time.

e-mail sent in by reader

This is of course money in their bank rather than in mine! Multiplied by the number of customers they have the sum is not small!

Of course, I still worry that they will still over estimate a year based on a lot of energy use in one week.
David, Bristol

e-mail sent in by reader

To think this will save consumers money is ridiculous. Energy suppliers are commercial enterprises-if consumption falls due to customers monitoring their usage, prices will rise to protect profits.
Doug Robinson, Doncaster England

e-mail sent in by reader

Brilliant scheme! I reckon as long as the initial outlay for the customer is kept to a reasonably low figure, the majority of people would welcome this initiative. Of course there'll be few who think it's another big-brother spy device in our homes but...
Paul, Pontypool, Wales

e-mail sent in by reader

I think the justification behind the installation of the meters is wrong.

Yes I understand that it'll be a huge cost saving to the energy companies however I believe the government is underestimating the amount of people who are aware of their own energy usage and are always trying to save as much as they can.

It's a bad generalization that they say it'll save all households a few percent a year as I'm sure that there are a lot more people than they think who already save this amount due to submitting their own meter readings and paying attention to where they can save money.
Allex Turner, Trowbridge, UK

e-mail sent in by reader

Brilliant, another automation process putting people out of work. The poor meter readers all being made redundant.
Martin James, Bristol, UK

e-mail sent in by reader

NPower sent me estimated bills for ages. When they finally sent somebody to read the meter I was left several hundred pounds in debt.

Its my belief that companies deliberately do this, as they won't let you change suppliers while you still owe money. Once they've trapped you, they can put their prices to whatever they like and you have no choice but to pay.
Dave, UK

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