Are we trying to be too smart about smart metering?

By Craig Edge, chief consulting engineer, Wheatley Associates

With yet another delay announced in the U.K. government's proposed smart meter implementation plan, the time has come to take stock of the situation, reflect on the rollout and ask the question, "Are we trying to be too smart about smart metering in the U.K.?"

On May 10, 2013, the U.K.'s Department of Energy and Climate Change (DECC) announced that it was putting back the start of the full-scale U.K. smart meter rollout program by one year to fall 2015 with targeted completion for 50-plus million smart meters in 30-plus homes and businesses by the end of 2020. DECC said the main reason for this delay is to give suppliers more time to create the data communications network that will underpin the rollout.

There is no denying that the smart metering program has the potential to transform energy management and consumption in the U.K. if all goes to plan. Considerable cost savings are potentially available to suppliers and consumers alike. But are we really being overambitious and biting off more than we can chew?

It is a colossal undertaking. Although there is nothing wrong with grand plans, the U.K.'s track record on IT projects of this scope and scale is not good. Maybe this further slippage is just symptomatic of trying to implement a program that is both overcomplicated and overcontrolled. When it cones to technology-based projects, how realistic is it to expect the network infrastructure to have an extended life-span of 20 years, as mandated? Is a one-time solution really feasible?

Here in the U.K., with smart metering intended to cover both gas and power supplies, we have arguably embarked upon one of the most ambitious implementation programs yet conceived. Other countries, by contrast, are focusing solely on strategies for electricity. It also seems something of a paradox that, given the U.K. energy market's recent history of deregulation and competition, smart metering in the U.K. has indirectly led us to seek to develop a highly regulated, centralized communications infrastructure to manage the data and energy management requirements. Communication of data to and from smart meters in the domestic sector will be managed centrally by a new, country-wide function covering both the electricity and gas sectors, known as the central data and communications company.

As the program generalities give way to the detail of the high-level deliverables, there remain a small but significant number of the technical requirements that still do not have a proven solution on the table. The mechanism to make the smart metering accessible to almost all customers, un a non-discriminatory manner, is still searching for a capable and reliable technology. Rather than criticize the delay, Dr. Martyn Thomas, chairman of the IT policy panel at the Institution of Engineering and Technology, called for the government to take advantage of the time to formalize specifications for the system that are currently only expressed informally, leading to a danger of "inconsistency, ambiguity and contradiction."

But once specified, what chance is there that it will still be fit for purpose in twenty years, as required? Surely flexibility and openness to technology advances will be essential for ongoing success? Just look at the development of the mobile telecommunications industry as a comparative example.

The wireless nature of the proposed communications network needed to underpin the smart metering program also opens up a potential strategic vulnerability to the utility system as a whole. Industry commentators are increasingly expressing concern that this is not being properly addressed. Little consideration has apparently been given to how the proposed wireless network might be hacked and the suggestion is that it will be with ease. With the energy supply system until now largely protected by its invisibility, suddenly there will be a proliferation of potential access and consequently hacking points. The system compliant smart meters currently available are also coming in for criticism for their apparent lack of security.

Certainly, the objectives of reducing carbon dioxide output, improving competitiveness in the energy sector and increasing energy security are as laudable today as when the government first mandated the installation of smart meters by October 2008. But, nearly five years on, it is hard to argue that anything has yet changed for U.K. households or, indeed, that the future holds an abundance of promise.

There continues to be a distinct lack of public understanding about the smart metering proposals. Skepticism, disinterest and a simple lack of knowledge abound and rather than seeking to effect a substantial shift in attitudes, many of the key benefits messages are seemingly being diluted. Many of the benefits expounded on government and quasi-government websites seem alarmingly unambitious for the estimated program cost of $18 billion, a cost that is bound to rise. If you want to be super critical, many of the benefits that smart metering will deliver could be achieved at a fraction of the cost through the installation of simple prepayment meters!

Nevertheless, smart metering is undoubtedly the way forward. Constantly reviewing the project and slipping the timetable is no bad thing if it ensures that we get it right. But there remains an open question for us all: Should there be a broader and deeper review of the current approach? Having flirted with revolution, and probably rightly so, perhaps it is time to contemplate switching to a more evolutionary approach.

Blackouts on the way in Britain?

It's seldom that there's much drama in the energy world, however, in the U.K., a report by that country's government electricity regulator touched off a swarm of responses, defensive statements and condemnations — in short, genuine electricity drama.

It started with a report from the Office of Gas and Electricity Market (Ofgem) that warned of power shortages in the coming few years. Since 2012, Ofgem reported in its June 2013 capacity assessment, the risk of blackouts in the U.K. has doubled. Energy margins could shrink to as low as 2 percent in 2015 and 2016, according to Ofgem.

Ofgem said power outages are by no means guaranteed, but the risk is growing and the government needs to act swiftly to address the problem. Ofgem is calling for more government investment in power generation, as it places the blame for the potential power shortfalls mostly on the power generation sector.

Some factors that could increase the risk of power interruptions include a particularly cold winter or a higher than expected level of industrial activity.

Also at issue is the size and speed of Britain's decarbonization efforts. To comply with E.U. carbon-cutting goals, the U.K. is shutting down coal-fired power plants.

Some numbers: Since last year, more than 2 GW in installed capacity has gone offline in the U.K., and further shut-offs and retirements are expected. The economic situation in Britain and the E.U. is making new investment in new generation sources difficult. No new power plants are expected to be built until 2016.

The same economic downturn that is making power plants difficult to build is also making power plants less necessary — because of the downturn and investments in energy efficiency, peak demand has fallen an estimated 5 GW.

With such few new power sources in the pipeline, Ofgem is working with transmission authority National Grid and the Department of Energy and Climate Change (DECC) to come up with ways to depress demand. National Grid has a scenario that anticipates power demand to fall an additional 3 to 4 GW by the end of the decade in part due to demand-side management.

This puts the U.K. government in the awkward position of having to root against an economic recovery. Because if factories start humming again, the country's power grid and its generation capacity will be that much more strained.

In 2008, the U.K. set its own greenhouse gas emissions limits and agreed to cut emissions by 80 percent by 2050. The U.K. is also a signatory to the E.U.'s 20/20/20 plan, which calls for a 20 percent reduction in E.U. greenhouse gas emissions from 1990 levels.

This month, members of Parliament debated the creation of quantitative targets for cutting carbon in the energy sector, effectively speeding up the country's decarbonization process. The proposal (an amendment to a wider energy policy reform bill) was struck down following a close vote, pushing energy policy into the headlines of U.K. news outlets.

Given the country's shrinking energy margins, rapidly approaching decarbonization goals, aging power generation fleet and the looming threat of power outages hanging over it all, the U.K. has some serious thinking to do on energy policy.

The country cannot expect to shut down multiple gigawatts of coal power and just expect the lights to stay on without a plan to maintain reliability. It's one thing to sign on to carbon-cutting treaties, but actually making a low-carbon power grid work is a more difficult trick.

An energy reform bill has passed through Parliament's lower house and is now being debated in the House of Lords. One hopes the debate will not have to be carried out by candlelight.