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Last Updated: Wednesday, 21 November 2007, 12:58 GMT
Playing the meter
How smart meters monitor households' energy usage

The way we pay for gas and electricity is going to change fundamentally, says Gordon Brown. But will "smart meters" make us energy-obsessives?

A humble box under the stairs is being hailed as the path to a household energy revolution and lower carbon emissions as a nation.

So-called "smart meters" are the next generation of gas and electricity meters which will be able to tell consumers and suppliers how much energy is being used in the home at any given moment.

This information - available on a separate device outside the meter cupboard or sent to our televisions, mobile phones or PCs - could eventually be broken down by appliance (see example above).

A two-year trial run by the energy watchdog Ofgem began earlier this year, although two of the four energy suppliers involved have yet to install the meters in anyone's homes. On Monday Gordon Brown set a 10-year target for rolling this out nationwide.

Replace 45m existing gas and electricity meters
Show energy use in kilowatts, carbon emissions or cost
Issued by supplier and fitted on wall in home
Information could also be sent to TVs, mobiles or PCs
Can be read remotely by suppliers, so no estimate bills
"For every household over the next decade, there will be the offer of a smart meter that will allow two-way communication between the supplier and customer, giving more accurate bills and making it easier for people to generate their own energy through microgeneration and sell it onto the grid," he told MPs.

So how do these meters work?

Lloyd Matthews, 55, was issued a smart meter by EDF Energy in March as part of the trial. He estimates it has cut his bills by about 10% - or 20 a quarter.

The meter goes under the stairs in his Edwardian three-bedroom, semi-detached house in London. And outside the cupboard door is the display device which he checks daily.

"It's made me very aware of what we're spending in the house. It surprised me. By switching off my television from standby, I saved about 15p a day.

"The smart meter has made me realise a lot of things we did out of habit that were unnecessary. We only need the hot water on once a day, not twice, and that's probably saved me 5-10p a day."

Lloyd Matthews
All this stuff about carbon footprints is pretty irrelevant, but how much it's costing me and how much I can save is very relevant
Lloyd Matthews
Mr Matthews logs his energy use daily in his diary - on Tuesday it was 51p on electricity and 1.30 on gas - but says he's not setting himself targets, just cutting out waste.

The central heating thermostat is down from 18C to 15C and it is no longer on when he leaves the house. Low-energy light bulbs have been installed and Mr Matthews is thinking about insulating his loft.

"All this stuff about carbon footprints and saving the world is pretty irrelevant to the individual. What does 'carbon footprint' mean to me? But how much it's costing me and how much I can save is very relevant and that's my perspective."

Mr Matthews receives quarterly bulletins rating his performance as green, amber or red, in comparison with other households (he's green) and his bill includes a bar chart tracking his average daily energy use.

What a gas

The Energy Retail Association, which represents suppliers, says the introduction of 45 million smart meters can be likened in technological scale to decimalisation or the advent of chip and pin.

Electricity display devices are currently available to buy
Government wants them freely available next year
Tell customers their electricity consumption
But suppliers have no access so bills are still estimated
Ignores gas, which is two-thirds of household energy
Homes cause a third of nation's greenhouse gases
Spokeswoman Nicola Bowles says making the information available in a "friendly" way is what will make the gadgets useful - consumers will be able to choose a gadget on the wall or text message alerts, for example.

More Associates, a company which uses design to improve understanding of energy use, has created a sophisticated prototype (pictured at the top of the page) that could be on the market in a couple of years.

Creative director Luke Nicholson says the display devices need to rid their language of energy jargon, but the most advanced ones could reduce household bills by up to 30%.

"They're not about technology, they're about people. They're designed as engineering tools not communicating tools and when you start designing the communication well, you can expect their effectiveness to sky rocket."

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