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Study says smart meters will cost £16.1bn
United Kingdom Created: 30 Nov 2009
The installation of smart meters across the country could cost more than £16 billion, dwarfing earlier industry estimates, according to figures released by the Government yesterday.
The £16.1 billion estimate was contained in a preliminary study of the economics of smart metering by Mott Macdonald, the engineering firm. It stands in stark contrast to industry claims that the installation of the meters in 45 million homes and businesses – a process which could take up to 20 years – would cost only £6 billion.
Smart meters, which measure exactly how much energy is used at all times, are designed to encourage efficiency. As well as helping consumers to identify ways to reduce their usage and their bills by turning off electrical equipment and using more energy-efficient devices, they enable power companies to introduce off-peak deals similar to those offered by telephone operators.

They will allow consumers to be rewarded for using energy at off-peak times, such as between 1am and 5am, enabling a reduction in the total generating capacity necessary to power the UK. They should lead to more accurate billing by ensuring correct data is sent back to suppliers leading to accurate monthly bills.

The Government, industry and consumer groups agree the UK’s existing electricity meters need to be replaced but officials and campaigners have given warning that companies have underestimated the cost of installation, which will be passed on to consumers through their utility bills.

Yesterday the Government edged closer to ordering nationwide use of the new meters by informing energy companies that powers to do so would be included in a new Energy Bill. It stopped short of saying it would definitely back the scheme, pointing out that there were still big questions over cost and complexity and that more studies were necessary before a final decision could be taken.

In a letter to Britain’s leading power companies, the Department of Business said that a final decision had been delayed until November because the Government is not yet convinced that the meters will be cost-effective.

“We wish to deepen our understanding and, as far as we can, resolve remaining uncertainties before we take those final decisions,” the letter stated.

A spokeswoman for the Department said yesterday that the £16.1 billion figure was the highest estimate of several in the report. They varied according to how the rollout would be implemented, the likely cost of the metering equipment and the timeframe.

Mott Macdonald said that the cost could be only £7.5 billion if the industry took a more gradual approach.

The Energy Bill enters its third reading in Parliament next week, making this the last opportunity for the Government to amend it. “These amendments give Government the powers it needs to take the next steps on smart metering subject to resolving remaining uncertainties,” the letter said.

The plan is for companies to begin installing the meters in 2010, with the implementation lasting for years. But the Government and industry cannot agree the cost of the programme. Centrica, the owner of British Gas, said its own studies showed that the rollout could be achieved for £6 billion.

Sam Laidlaw, the chief executive, said: “We are convinced there will be a significant positive return for the UK. This stems from our own detailed research, presented to government.”
Clever clocks, Smart meters
— allow consumers and energy suppliers to monitor how much energy consumers are using 24 hours a day
— benefits include greater energy efficiency, more accurate billing and the introduction of off-peak energy tariffs
— if approved by the Government, the plan is for companies to begin installing the meters in 2010, with most homes fitted by 2020
— the Energy Retail Association says the programme would cost about £5 billion, but estimates by Mott Macdonald, an engineering firm, commissioned
by the Government says that it could cost far more – as much as £16 billion
Robin Pagnamenta
The Times

45m smart meters on the way
After months of dithering, the Government is poised to give the go-ahead for the installation of smart meters in every home and business - 45m in total.
From next year and during the following ten years, energy companies will replace existing gas and electricity meters with smart meters that can tell homeowners how much energy they are using at any time.
The £7bn smart meter revolution is a vital weapon in the Government's battle to cut energy consumption. Trials have shown that householders reduce their consumption by about 10% - an average of £10 a month - where smart meters are installed.

This is because they can see how much energy is wasted, for example by leaving lights on or keeping TVs on stand-by.

Smart meters will also finally put an end to the scandal of incorrect billing. No longer will energy suppliers be able to force customers to pay huge bills based on incorrect energy estimates.

The Government will also announce a multi-billion pound contract to create a centralised communication system to gather the data from the smart meters and distribute it to each home's energy supplier.

Energy Minister Mike O'Brien said: 'Smart meters will help consumers save energy and money and cut emissions. We've said we want smart meters in every home in the UK by the end of 2020.

'We will be the first country in the world to have such a huge refurbishment of our energy meters and we need to get it right. That includes making sure we have meters that can do all the things we want them to.'

It will be the responsibility of the energy companies to offer householders a choice of meter. They vary in sophistication, with some capable of pinpointing parts of the house where energy is being used.

It is understood that the Government has insisted that every meter should be capable of handling micro-generation data so that households which generate their own energy via solar panels or wind turbines will be able to sell the surplus back to the National Grid.
Smart meters will also enable suppliers to moderate peak demand through differential pricing throughout the day.

Tories want 'smart meter' in all homes
Tom McGhie, Financial Mail
Click here to view the source article.
Source: Agnes Ingvarsdottir. www.mast-victims.org

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