The results are in: Smart metering pays off

It’s almost taken for granted now in most circles that smart electricity and gas meters help people reduce their energy consumption. But how much of a difference does the technology really make? Are all these costly — and sometimes controversial — metering rollouts really worth the potential payback? And how, if at all, do they inspire people to change their energy habits?

According to Ireland’s Commission for Energy Regulation (CER), the answers to those questions are, respectively: A pretty significant difference in some cases, yes and because money talks.

In advance of a planned nationwide rollout of smart meters, the Irish agency ran trials of several combinations of smart meters, communications platforms and pricing strategies to see which ones could prove most effective at driving reductions in energy demand. The year-long experiment, which included more than 5,000 residential customers and 650 businesses and concluded at the end of 2010, was “among the largest and most statistically robust smart metering behavioural trials conducted internationally to
date,” according to the CER.

After a six-month benchmark period followed by 12 months of trials, the CER found that:

• A combination of smart meters, time-of-use pricing and other demand-side management incentives helped residential customers reduce their overall electricity use by an average of 2.5 per cent. Electricity use during times of peak demand dropped by even more: an average of 8.8 per cent.
• The most effective strategy combined a smart meter with a twice-monthly electricity bill, detailed statement on energy use and in-home electricity monitor that displayed consumption data and trends measured by the meter. This approach helped reduce peak energy use by 11.3 per cent.
• Typically, the more energy a household used before the trials began, the greater the consumption in reduction.
• The trials showed a measurable shift in energy demand from peak periods to post-peak times (that is, at night).
• Overall, 82 per cent of residential customers said they made some changes in how they used electricity; 74 per cent said they adopted major changes in their habits.
• Low-tech reminders can help boost the effectiveness of high-tech metering. Fridge magnets were reported as useful reminders by 75 per cent of residents, while stickers proved helpful to 63 per cent.
• Most users — 91 per cent — said the in-home electricity monitor helped them to achieve reduction in their peak energy use.

Smart metering’s benefits to small- and medium-sized business customers, on the other hand, were so small as to not be statistically significant, the CER found. The greatest obstacle to cutting consumption among businesses was “the perception that it was not possible to move the usage to other times.”

While twice-monthly billing and in-home displays helped to produce the largest average residential reductions in consumption, the CER concluded that the strategy with the best value from a cost-benefit analysis perspective was monthly billing with no in-home display, combined with either a power line carrier (PLC) or wireless communications platform for the smart meters. That approach generated a net present value of €282 million through 2032.

When carbon emissions reductions were also factored in, though, a different strategy promised the best value from both an investment and climate perspective. That approach, with a benefit of €170 million, calls for twice-monthly billing, an in-home display and PLC or wireless communications.

The CER trials tested PLC technology from Aclara and wireless technology from Elster.

The CER adds that its value estimates do not take into account other potential costs and benefits that could emerge as the energy landscape continues to change. Such changes include smart-grid improvements, microgeneration, increased use of electric cars and smart metering for water. In general, those factors probably tend toward “a likely underestimation of the potential benefits from a national electricity smart metering rollout.”

With its trials now concluded, the CER will next work on the design and implementation plans for the national smart metering rollout. It expects to publish a consultation on those plans this August.

The Irish study should also help bolster the case for smart metering projects in other parts of the world. The solid results it produced through a large-scale and year-long data collection effort makes it clear that smart energy meters really do pay off over time. Hopefully, this will quash some of the arguments from opponents who say the technology isn’t worth it … but don’t hold your breath.