Smart meters have the potential to play a critical role in energy security, providing near real-time information through a visual in-home display, empowering consumers to change how much energy they use and when they use it. If consumers reduce or shift their energy consumption away from peak periods, they may be able to save money, facilitate additional renewable generation and reduce reliance on imported energy. Below we discuss the findings of Cornwall Insight’s latest research paper “Energy Security and Smart Meters”, which can be accessed here.
The International Energy Agency (IEA) defines energy security as “the uninterrupted availability of energy sources at an affordable price”. This means having access to uninterrupted and continuous energy provision, which is unaffected by, or able to respond to short-term changes in supply and demand. Currently, a large share of the energy consumed in Great Britain comes from fossil fuels imported from other countries. While just under 40% of electricity generated in GB comes from renewable sources, around 40% is generated using gas. More than half of the gas used in Britain is imported.
Households directly consume around a third of all gas and electricity used each year. They contribute to the daily peaks in electricity demand, which occur on weekdays, usually between 4pm and 7pm when there is a greater crossover between industrial, commercial and household usage. Times of peak demand are often linked to an increase in fossil fuel generated electricity, which can be more expensive than other fuels and increases the cost of wholesale electricity at peak times.
Smart meters are an enabling tool for helping customers to reduce their consumption overall or to move their consumption away from times of peak demand. Using the half hourly data from smart meters, customers can be rewarded for reducing their use of electricity and gas at certain times, in a way that would not be possible with a traditional meter. This kind of near real time energy management is enabled by communication of pricing or energy trends, for example through a Time of Use Tariff. Time of Use Tariffs offer different prices at different times of the day, in a similar manner to peak and off-peak transport tickets.
Real-time electricity consumption management can also support National Grid Electricity System Operator (NG ESO) in managing supply and demand. NG ESO has begun to explore the opportunity that could arise for households to participate in this type of arrangement through its Demand Flexibility Service. The government’s Smart System and Flexibility Plan highlights the numerous ways that greater flexibility drives forward energy independence and decarbonisation.
By reducing overall consumption of electricity and gas (where possible), consumers can support energy security by reducing the need to operate some of the country’s most carbon-intense generating stations. In the round, lower demand for gas will reduce our reliance on imported gas for our heating, and for the gas used to generate electricity.
Cornwall Insight was commissioned by Smart Energy GB to produce an independent insight paper exploring the role of smart meters in supporting energy security in Great Britain. Smart Energy GB is a not-for-profit campaign supporting consumer awareness and understanding of the benefits smart meters can deliver across England, Scotland, and Wales.