Is spending a billion on electric smart meters a really dumb idea?

From the BBC:

Smart electricity meters will be rolled out in Northern Ireland from 2028, according to the Department for the Economy.

Smart meters are widely used in the rest of the UK and in Ireland, providing real-time information to energy suppliers while giving households information on their electricity usage and costs.

The rollout is set to cost more than £500m, with the regulator expecting IT costs expected to increase that total to the “late hundreds of millions”. Economy Minister Caoimhe Archibald said current energy costs facing bill payers are “not fair and not sustainable” adding smart meters would be “supporting consumers to better manage their electricity usage”.

At the minute, we all have a meter somewhere in the house which needs to be checked manually to help work out our electricity bill. Smart meters automatically send that information straight back to the network, along with other data about how the grid is operating. Smart meters also show bill payers their own electricity usage in real-time on a small display, providing information on into when they are using more electricity and how much it is costing them.

You will notice that the regular estimates are going to cost closer to a billion and as every single government IT project overruns, even this could be a conservative figure. £1 billion divided by the 800,000 homes in Northern Ireland work out at £1,250 each. This seems very expensive. Could money not be better spent on subsidising solar panels & home battery storage? There is also the bizarre situation that some of the smart metres that were previously installed are already out of date, as they use the old 2G and 3G networks. These are being switched off by the mobile companies. Like all technology these smart metres might go out of date very quickly and we just end up with another massive bill replacing them all.

On the face of it I would normally be a big fan of technology like this. I have an electric car and you hear reports from England about situations where customers are being paid to take electricity and of tariffs as low as 6p per kWh. It could be a revolution in electric car ownership and also make electric heating more economically viable but the problem is when you look at the realities of the situation in England, it’s all been a complete mess so far.

As this article in the Guardian noted:

small device in every home was supposed to be the key to solving Britain’s energy headaches: encouraging consumers not to waste power, preventing shockingly high bills and making the system greener. Instead, smart meters have become an emblem for the energy industry’s poor reputation as the costs of rolling them out approaches £20bn and the government project lags years behind its original schedule.

Consumers who have the devices still face surprise bills, too, as some faulty meters go into “dumb” mode, where they stop automatically sending regular meter readings to energy suppliers, leaving households to send readings.

“Honestly, it has been a mess from the beginning,” an executive at one major energy supplier says. “So many of the problems that we have encountered were predictable and preventable. But we were told to keep pushing ahead towards these deadlines.”

The founder of MoneySavingExpert.com (MSE) wrote to Ed Miliband, the energy secretary, to warn that while the government’s narrow definition of what counts as a “faulty meter” might suggest that only 10% of smart meters have gone dumb, the consumer group’s own research has suggested that about 20% of home smart meters are not working properly.

So a lot of these smart metres just don’t work. They are very expensive to install and there’s very little evidence that they change consumer behaviour in electrical use or that consumers even benefit from reduced bills. In fact the opposite: the UK has some of the highest energy prices in the world.

The real scandal in our electric network is how much renewable energy is being completely wasted. The figure is around 22%. The issue is there is currently no way to store this electric so it just goes unused.

There are some commercial companies looking at battery storage systems, for example this one in Tyrone. or the planned 100 million one in Islandmagee.

My advice for Economy Minister Caoimhe Archibald would be to be ultra cautious of this project and instead to put the funding into the one goal of reducing our electric costs. Reducing electric costs are essential to our future economy, to the rollout of electric cars, switching away from fossil fuel heating, etc. It is essential that we reduce the kilowatt cost.

A more sensible approach might be to instead go for natural wastage. Mandate that all new homes have electric smart metres and where there are repairs to existing metres, replace them with smart meters.

As an electric car owner, reducing the overnight tariff would be a real game changer, there are things we can do now to improve the situation without expensive infrastructure changes. One other key point is that when we hear about really low tariffs in England we often forget that the daily standing charge is a lot higher in England. In Northern Ireland it’s about 14p but in England it’s about 60p per day. This can really add up over the year, so a lot of this stuff is swings and roundabouts.

Give me a dumb grid with cheap electric over a smart grid with high electric any day.

Brian O'Neill

Managing Editor of Slugger O’Toole. I help to manage Slugger by taking care of the site as well as running our live events. My background is in business, marketing and IT. My politics tend towards middle-of-the-road pragmatism; I am not a member of any political party. When not stuck in front of a screen, I am a parkrun Run Director.