Smart Energy Archives - Page 5 of 11

Use More Energy. Towards a UK Energy Policy

Three years ago, in a utility conference in Atlanta, I sat through a keynote by Tom Fanning, President and CEO of Southern Company – one of the largest US utilities. In a typically Texan barn-storming style he argued that “to improve human existence let’s use more energy where we should”, going on to promote the message that every Texan in every trailer park was equally deserving of air conditioning and a 60″ TV. It wasn’t what the audience expected, many of whom had come with concerns about smart meters, energy efficiency and outages.

Earlier this week I sat through the IET’s annual Mountbatten lecture, given by Dieter Helm, Professor of Energy Policy at the University of Oxford. The subject was The New Energy Landscape – low fossil fuel prices, decarbonisation and new technologies, based on his updated book – “The Carbon Crunch: How we’re getting climate change wrong – and how to fix it”. Much to the surprise of the audience, this time mainly engineers involved with the energy industry, he gave much the same message – that’s it’s time to stop worrying about the cost of energy or energy efficiency. Instead we should be planning a future where we can use as much as we want.

I urge you to watch his lecture, which is available on the IET website. At the risk of oversimplification here’s my very abbreviated take on it, as well as some of the potential problems in changing Government policy.

Why is DECC more secretive than the MoD?

Energy policy is one of the most important things for any country to get right. If energy supplies fail, the impact on the population and economy is immediate and potentially disastrous. So you’d think that debate about it would be fairly open, not least because an open debate helps make a fairly arcane subject a little more accessible. But as readers of this blog will know, the UK’s Department for Energy and Climate Change (DECC) has something of a reputation for secrecy, doing their best to block any Freedom of information requests and refusing to admit any problems with their expensive projects.

In 2011, the previous UK Government set up a Major Project Authority group to try and provide more insight into the portfolio of large, transformative projects. It’s an excellent initiative, which has just produced its third annual report. As well as showing progress, or lack of it, you get a good idea of which departments are least open. Of all the Government departments, you would probably have expected the Ministry of Defence to be the most secretive about its projects. It’s not. DECC stands out as the one which is still withholding most information on its projects. Which makes you wonder why the Department for Keeping the Lights On is so desperate to keep everyone in the dark? Under the MPA’s pressure, they are releasing more information, but recent events suggest their heart’s still not into open disclosure.

Pressure grows to stop GB Smart Metering

It’s taken a long time for the bubble to burst, but there are signs that reality is starting to break through the Panglossian fixed grins of the British smart metering establishment. As readers of this site will know, I’ve been critical of the GB programme. I have no issue with smart meters per se, but what is being proposed for deployment in Britain before 2020 is unlikely to offer any of the cited benefits. Instead it’s likely to add over £11 billion to the energy bills of English, Welsh and Scottish consumers.

DECC, the Department of Energy and Climate Change, have spent much of the last five years fending off criticism and fighting Freedom of Information requests to explain how they came up with their figures justifying the British smart metering programme. Until recently they’ve managed to pull the wool over the eyes of ministers and the National Audit Office, but that strategy finally unravelled with the recently released report from the House of Commons Energy and Climate Change Committee, which concluded that “without significant and immediate changes to the present policy, the programme runs the risk of falling far short of expectations. At worst it could prove to be a costly failure.”

A further nail in the coffin of DECC optimism came today, when the highly respected Institute of Directors’ Policy Unit issued a scathing critique of the programme in “Not too clever: will Smart Meters be the next Government IT disaster?”, which goes as far as to suggest the best course may be to abandon the programme altogether.

Further evidence suggests that the programme is considerably further behind than many of those involved realise. There is also a growing concern about its cost within utilities, many of whom would be happy to abandon some or all aspects of it. The first task of whoever is elected in May could be to make the decision to kill it.

Smart Metering 2.0

Over the last few months it’s been interesting to look at the coverage of smart meter deployments, as people are starting to question as to what the benefits have been? Did the billions of dollars invested in them help either the grid or consumers? The pace of deployment has certainly slowed in the US and Europe and in recent months there seem to have been as many headlines about smart meters being replaced with old analogue ones as there have about new deployments. At the same time the interest of energy suppliers in smart metering has been waning. Instead they’ve fallen in love with smart thermostats as the way to woo consumers with energy savings. British Gas’ recent purchase of AlertMe for £44 million (a tad short of the $3.2 billion that Google paid for Nest) is the latest example of that trend. And with energy prices falling, any claim that smart metering will engage customers in energy saving is looking increasingly spurious.

But that’s a malaise specific to the North American and European energy suppliers, who are probably beginning to feel that they’ve been mugged by meter manufacturers into deploying white elephants that have turned out to be little more than an overpriced AMR system. If we look at the next generation economies, like Brazil and India, they have a very different set of problems. The most important of which is the amount of electricity which simply disappears. In India around 25% of electricity “goes missing”, equivalent to almost $20 billion of revenue every year. In Brazil around 11 GW is stolen, equating to 20% of generation. The effect of this is not only lost income, but power outages associated with illegal connections and tampering. It is a level of disruption that calls for a very different approach to the one provided by the expensive, over-specified meters of the Western world.

These problems require a far more pragmatic approach to smart metering – generating a new breed of solutions which I refer to as Smart Metering 2.0. Whilst the western deployments should have been about data, they ended up being little more than new billing solutions because the systems were designed from the wrong perspective. That’s largely because they were designed by people who didn’t really understand the architecture of end-to-end systems and were hung up on a legacy approach. In effect they made the meter more complex so the head end could stay simple. That was all about not rattling the cage of the utilities’ IT departments, most of which don’t want to have to deal with more data. The new meters are taking the correct view of keeping the meter as a simple source of data and adding value in the comms and head end. It’s no surprise that these are being spearheaded by companies with a background in comms who understand how M2M and the Internet of Things systems work. It’s an approach which drastically reduces the cost of deployments and allows utilities to upgrade their capabilities as they need them, rather than trying to do everything from day one.

UK Smart Meters Delayed. Again.

Last week the UK’s Department of Energy and Climate Change announced that the UK’s smart metering deployment was facing another 12 months delay. That’s 18 months after they announced that the UK’s smart metering deployment was facing another 12 months’ delay. This is not all bad news. It means that the growing population of consultants within DECC can look forward to what is fast becoming a never-ending gravy train of consultancy work, public consultations and project reviews. For the consumer it’s likely to mean even more unnecessary costs heaped onto future energy bills. But not until after the next election, so nobody in Westminster really cares.

Despite the charade of one step forward, one step backwards, we still don’t know whether the deployment will have any practical value. There is no EU mandate for it – individual countries need to show that smart metering is cost effective. The first DECC survey showed it was not, but DECC mandarins then fudged the numbers (not my phrase, but that of an involved MP), since when they’ve spent a considerable amount of time and effort in concealing what’s behind their calculations. The approach of “DECC knows best” has resulted in the most complex and expensive smart metering scheme in the world, which appears to be beyond the ability of both suppliers and utilities to deliver.

FATZ and DECCY – the UK’s cartoon approach to Smart Meters

The UK Government has enlisted two cartoon characters – FATZ and DECCY to explain the need for smart meters to a sceptical public. FATZ – the corpulent blue one, represents the cold, uncaring fat cat executives of the energy industry, eager to take still more of your money, while the manic yellow DECCY represents the seriously scary civil servants of the Department of Energy and Climate Change who have been tasked with dreaming up the world’s most complicated and unworkable smart metering specification. Their bulging eyes and demented smiles tell the average consumer all they need to know about the UK smart metering plan and the mentality of the people behind it.

Claire Maugham, director of communications at Smart Energy GB, who’s responsible for the campaign said: “FATZ and DECCY are embodiments of what we’ve heard about consumers’ experiences about buying gas and electricity. We heard time and time again that people are anxious because they don’t know what they’re spending, they don’t know if they are on the right tariff or with the right supplier. It’s almost like they are out of control, causing chaos around the house like two naughtily children.” So it’s fitting that they’ve chosen utility bosses and DECC employees as models for their chaos and out of control metering specification.

The aim of the campaign is two-fold. Firstly to try and persuade consumers to allow a smart meter to be fitted, secondly to try to convince them they that might save money, not least because if they don’t it exposes the alleged consumer savings trumpeted by DECC as pure fiction, relegating the whole project into another expensive Government IT fiasco. Achieving either of Smart Energy GB’s aims looks increasingly difficult.