Time for energy providers to make some smart moves

by Nick Wellington, Head of Strategic Communications at Navetas Energy Management

Against the backdrop of significant energy price rises by all of the 'Big Six' energy companies in 2011, the smart meter roll-out to 53m homes and small businesses - once heralded as the key to balancing energy consumption with generation ‚¬" is no longer looking like such a smart move, for energy consumers and also the big six energy providers themselves.  Why?

According to the Department for Energy and Climate Change (DECC), the smart meter roll-out, which has a target completion date of 2019, will save energy consumers £6 billion, cut costs to suppliers by around £11 billion and save the UK £1.5 billion thanks to reductions in greenhouse gases.  It sounds admirable doesn't it?

The problem is that for many cash-strapped households and businesses facing pressure on profitability, these figures just don't add up.  More recent figures published by the DECC confirmed that, while households will largely foot the bill for the £11.7bn smart meter roll-out, they will save just £23 a year in 2020.  That represents just two per cent of the current average household energy bill of £1,132.  And that's before taking into account further energy price hikes over the coming decade.

It's getting much harder for energy providers to convince their customers that smart meters are a good thing, which, along with recent price hikes, is leading to a loss of public confidence in the energy industry.  Indeed, EDF, one of the UK's Big Six power suppliers has recently admitted as much, but only after putting up gas bills by over 15% and electricity by 4.5%.

Vincent de Rivaz, chief executive of EDF, was quoted in the Guardian as saying: "We recognise there remains a widespread lack of understanding and suspicion of the industry as a whole, among the public, customers in general, politicians, regulators and others."

Addressing negative perceptions

As de Rivaz says, "It is important this perception is addressed. The energy challenges Britain faces are far too important and can only be addressed in a world with trust, open dialogue and mutual understanding."


One way that energy providers could address these issues would be to focus on the genuine benefits that smart meters could make available to the 53million households and businesses who are mandated to receive them. However, so far, very little attention has been placed in this area.

The benefits of more accurate billing usually form the basis of the smart meter debate, but paying for what you use is not a particularly compelling case for energy users. The real need - to provide households and businesses with support and advice as to how to cut their bills by reducing energy consumption - is largely neglected. With potential energy savings of 5-20%, both households and businesses have a lot to gain here.

  Making smart meters smarter

Given the climate of growing public mistrust for the Big Six energy providers, it's hard to understand why they do not seize the opportunity to help customers cut their bills and help to save the planet in the process.

 For example, Navetas has developed technology that can integrate with smart meters, to measure how much energy individual appliances use, in real-time. This energy disaggregation technology can transform the smart meter from a simple display, into an intelligent energy measurement and management system in the home or business that will motivate and engage users to save energy.

By making innovative technology such as this available to their customers in a user-friendly format, energy providers could start to challenge current perceptions. They can give their customers the information they need help them to change their behaviour and cut their bills.

That's got to be a smart move, whichever way you look at it.

Nick Wellington

Topics: edie
Tags: | Communications | DECC | energy bill | gas | smart meters | technology
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