Posted: 20 June 2014

Smart thinking

Smart meters, electricity, consumers, efficiency, smart energy systems, infrastructure, demand, affordability, tariffs, upgrade, renewables, fossil fuels, thermal, storage, transport, heat, flexibility

Government figures suggest that, through to 2030, the net benefit of the smart meter programme to the UK will total £6.2 billion.


By 2020, some 30 million UK homes and small businesses will have smart meters installed under Government plans to give consumers greater control over their energy use. Phil Sheppard, National Grid’s Head of Network Strategy, explains the benefits of smart metering and how the wider creation of smart energy systems to link energy sources and users in a more intelligent way can help to deliver a sustainable future.

Technology has a vital part to play in solving the future energy challenges that we face as a nation in all sorts of areas, from security of supply to sustainability and affordability.

Phil Sheppard, National Grid’s Head of Network Strategy

Phil Sheppard, National Grid’s Head of Network Strategy

If we want to use our energy resources in the smartest way possible – and in the best interests of consumers – we need to harness new technology in order to get there more quickly and more efficiently. The advent of the smart meter in homes and offices is one example of this new technology, but in reality the roll out of the smart meter is just the start of our journey.

Smart meter roll-out

The idea of installing smart meters across the UK has been around for some time. The Government launched a three-stage process to upgrade the energy system using smart meter technology:

• Stage one involved policy design and this was completed in 2011

• A so-called Foundation stage is under way, whereby systems are being built, tested and installed, followed by…

• The main installation programme, which is due to begin towards the end of 2015.

Installed by energy suppliers under a centrally controlled programme, smart meters will bring a number of benefits.

Consumers will be able to monitor their energy use in real-time and potentially make savings by connecting to new ‘time-of-use’ tariffs and using more energy when demand is lower, such as running dishwashers and washing machines overnight. Last but not least, we will see the end of estimated billing.

There are other factors to consider beyond consumer behaviour. For example, smart meters will allow us to understand the impact at a domestic scale of things like wind turbines, heat pumps and solar photovoltaics (PV). So, in effect, we will have a much more rounded picture of how we produce and consume energy.

Analysing the potential benefit to the UK of the smart meter programme is complex, but Government figures suggest that, through to 2030, the net benefit to the UK will total £6.2 billion, even once the estimated £10.9 billion programme cost is accounted for.

Beyond smart meters

The implications stretch beyond homes and businesses, however. Building new infrastructure such as power stations is expensive and time-consuming, so finding new ways to reduce and make better use of demand, especially at peak times, makes economic as well as environmental sense.

From a transmission perspective, smart meters bring benefits for customers by giving us new ways to optimise use of demand and micro generation, as well as more cost-effective choices for balancing the grid and reducing the need for network investment.

Of course, smart meters in isolation cannot hope to reshape our collective energy consumption; they are just part of the equation. At National Grid we have a stake in the smart meter programme because we are right at the centre of the UK’s whole energy system – joining everything together. The concept of smarter thinking that underpins the programme is mirrored in the way that our transmission network operates.

We are working with industry to deliver the right solutions at the right time, developing and deploying rules, tools, technical and commercial solutions to minimise the amount of network investment that is required, while pushing the system further in operational timescales and increasing automation.

This is enabling us to progress work on new assets such as the Western Link, a £1 billion project being developed by National Grid and Scottish Power to bring renewable energy from Scotland to England and Wales via the construction of a high-voltage direct current cable.

The role of smart energy systems

If we want to optimise the use of energy resources in the best interests of consumers and manage the transition to 2050, we need to think beyond the grid itself and the information and communication technology infrastructure that underpins it and start to consider smart energy systems.

This begs the question ‘what do we mean by smart energy systems’? There are many definitions, but to my mind what we are really talking about is finding ways to make the way we generate and consume energy more interconnected.

Renewable forms of energy are less flexible than fossil fuels, which allow us to store large amounts of energy, so we must find economic ways of capturing and using excess energy from the sun, tides and wind.

A smart energy system is all about using this renewable energy in an efficient and affordable way, as well as getting the best end result for consumers through developments such as smart electricity grids, thermal storage and smarter ways to connect the electricity, heating and transport sectors.

The only way that these smart energy systems can be developed effectively is through collaboration and co-operation right across the sector: Government, regulators, network operators, distribution companies, consumer groups and of course National Grid – we all have a contribution to make.

The smart meter roll out lays the foundation; now it’s up to all of us to build on this and make sure that consumers get the best deal for the energy they use, through systems that really work for them.

Read more:

Stephen Marland, National Grid Gas Demand Manager on the implications of alternative technologies to our homes and the energy sector. Click here to read more.

‘The future of heating: meeting the challenge’ was published last year and sets out specific actions to help deliver low carbon heating across the UK in the decades to come. Click here to read more.

Gas innovation in full flow
“What we are really talking about is finding ways to make the way we generate and consume energy more interconnected.”

Phil Sheppard, National Grid’s Head of Network Strategy.