A long-awaited announcement will finally come this week when the Department of Energy and Climate Change (DECC) releases details on how smart meters will be installed on Wednesday.  Smart meters will revolutionize how energy is used and the UK is to be blanketed with the devices by 2020.

Once the blueprint is announced the UK can move forward with its nationwide smart grid.  Smart meters are a critical first step towards the power system of the future where smart appliances operate and plug-in electric vehicles recharge when power is cheapest.

The big energy companies are backing the massive smart meter installation but haven’t been able to agree on the best way to carry out the massive effort.  It is expected that the DECC will back the “central hub” model where smart meters send accurate readings to a central office using SMS or GPRS communications technologies.

The installation project will be one of the largest IT projects the UK has ever seen.  The central office is to be run by information communications technology (ICT) specialists such as Vodafone and O2.  The central office will pass energy data to the energy companies – a model that allows homeowners to change energy suppliers without having to swap out the smart meter.

It is believed that the hub will be set up initially as a joint venture but industry experts believe that once established it could be spun off as an individual company.  If the model works as expected it could make the UK the most advanced “green energy” country in Europe by 2020.

Not all energy companies are satisfied the “central hub” model is the best way to install smart meters.  “This is going to be fraught with problems,” said Mark Daeche, chief executive of First Utility, in an interview with Telegraph.co.uk.  First Utility is the first energy company to supply all of its customers with smart meters.

“This is not just an IT project – and we know the government track record with IT projects – but is also a communications project that has to come in on time and budget,” Daeche continued.

It is hoped that energy consumers get a display unit in addition to the smart meter.  A display unit would allow for convenient monitoring of energy usage and direct communications with the energy supplier.  Consumer watchdog Which? says that consumers will have a hard time saving anything on their bills without a display unit.  Which? believes consumers must be able to monitor their consumption on an hourly basis and fears the DECC may not make the devices mandatory.

The DECC has already committed to installing smart meters in every home by 2020 in an announcement earlier this year.  The project is expected to cost between £7 billion and £9 billion – a sum that will initially be paid for by energy companies.  The suppliers are expected to pass the installation costs on to customers.  The government says that consumers stand to save up to £100 a year on their energy bills even when the surcharges from the supplier are factored in.

Following the announcement energy and telecom companies will design a system that can communicate with the back office systems at energy suppliers.  Once the rollout begins it is expected that suppliers will compete fiercely for customers.

Vodafone Group Plc
Vodafone House
The Connection
Newbury
Berkshire RG14 2FN
http://www.vodafone.com

Telefónica O2 UK Limited
260 Bath Road
Slough,
Berkshire SL1 4DX
http://www.o2.co.uk

Which?
Castlemead
Gascoyne Way
Hertford, SG14 1LH
http://www.which.co.uk

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