Posted on Wednesday 26 September 2012 by Ulster Business
Minister Foster stressed that Stormont is serious about changing energy consumption and noted that fluctuating prices for both gas and electricity means consumers are always looking for ways to save money.
The IME3 directive from Europe wants at least 80 per cent of consumers attached to smart electricity metering systems by 2020.
The options for gas smart metering will be looked at again in 2015, with the Utility Regulator to consult on it in due course.
Mrs Foster said smart meters are only a small factor in using digital technology to deliver energy, but will play a key part in developing a wider smart grid for Northern Ireland in the future.
"A smart grid will help manage the shift to low carbon electricity while potentially opening up opportunities for job creation in IT, product development and the green economy," she added. "My Department will seek to ensure that Northern Ireland can compete globally in this area."
Smart Grid Ireland (SGI) is a private sector collaborative network of companies facilitated by the Centre for Competitiveness (CforC) in the Northern Ireland Science Park in Belfast.
CforC director and chief executive, Bob Barbour, told Ulster Business that smart meters are key to a smart grid, but there is much work to be done to bring Northern Ireland in line with the rest of the UK.
"While Stormont's announcement is welcome Northern Ireland is well behind the UK and Ireland in developing the smart grid technologies needed to enable smart metering because of electricity regulation policies independent of local or national political influence," said Barbour.
"Smart meters are a key component of the smart grid. They will enable two-way, real-time communication between the energy supplier and customer, giving households, small businesses, manufacturers and consumers, and the utilities that serve them, the information they need to cut energy use and electricity costs.
"These benefits are just a part of the overall contribution that smart grid will bring to the wider economy, with all stakeholders being able to enjoy the positive economic benefits from the transition to a low carbon energy future," he added.
Barbour lists some of the key selling points of smart grids as:
• Customer benefits arise from engagement in energy management driven by real time information and price signals, which leads to electricity usage reduction or load shifting by consumers and the opportunity to lower bills or mitigate cost increases.
• Operational benefits allow the utility to deliver more reliable service, rapid remote control, and better outage detection and recovery to its customer base at a lower overall cost.
• Societal benefits arise from the demand response and direct load control, which helps to offset the need for new generation and transmission equipment, while lowering carbon emissions through integrating multiple clean energy supplies and reduced usage.
• Economic benefits through the development of a smart grid skills base as a key enabler of potential inward investment, as well as the creation of a significant number of new jobs in clean energy. The UK Department of Energy and Climate Change forecast an £8.7bn benefit to UK economy from a roll out of smart meters alone.
• Enhancing the use of renewables through the creation of intelligence in the management of information. This will enable NI to deliver higher rates of connection of new sources of generation such as wind power and make the largest contribution to the commitment made by Minister Foster for energy provided from low carbon sources.
Barbour added: "A well designed grid is critical to the clean energy revolution that we need. Smart meters are the building block to the smart grid and the smart home.
"A recent UK Government-sponsored research found support for a national rollout of smart meters. This validates the case for specific provision by the regulator for the deployment of smart meters as part of the overall development of a smart grid infrastructure in Northern Ireland."
Northern Ireland Electricity (NIE) owns the electricity transmission and distribution network and operates the electricity distribution network which transports electricity to over 830,000 customers.
Chris Huntley, future Networks Manager at NIE, is managing the implementation of Smart technologies on the electricity network.
"The technology can help to save energy, reduce costs and increase reliability by providing greater information on energy usage to both the customer and to the electricity network company," he agreed.
"By influencing customer energy usage and therefore flattening out times of peak demand, Smart technology can enable assets to remain in service for longer and so defer expenditure and can also maximise the capacity of the existing network to facilitate further connection of renewable generation.
"At NIE, we use a degree of Smart technology on the network to monitor the condition of assets and to help with fault investigation. We are currently investigating Smart technologies to help maximise the amount of renewable energy that we can bring onto the grid."
In order to understand the potential benefits that Smart meters and Smart meter technology could have for customers and the local grid, NIE is conducting a trial in the Coleraine area.
The Shift & Save trial will take place over a period of two years with around 200 households. Information on electricity use will be monitored and shared with the participants, helping them to be more energy efficient.
The first phase of the trial will begin this autumn, with Smart meters installed and baseline data gathered. In phase two of the trial, home display units will be fitted to measure energy usage and this information will be provided to the customers.
The success of the trial will depend on the ability to educate, inform and incentivise customers to focus on and review their overall electricity usage.
Tom Doran, metering manager at NIE, will manage the teams who will be installing Smart meters across Northern Ireland.
He said: "Recently the Minister for Energy announced that all customers in Northern Ireland will have a Smart electricity meter by 2020. A Smart meter measures energy consumption, providing more information than a conventional meter, and transmits and receives data using a form of electronic communication.
"At NIE we own all of Northern Ireland's electricity meters so it will be our responsibility to replace these meters with new Smart meters. This will require a five year dedicated programme and additional skilled meter fitters."
NIE is still at a research and development stage with Smart technologies so it doesn't have solid figures for costs and potential savings just yet. CforC estimates the cost of rolling out 800,000 smart meters in Northern Ireland at £280m.
"We have trialled a small number of Smart metering technologies including dual fuel meters and have been working closely with the Regulator to ensure that whatever technologies we use meet the needs of the market and customers, especially vulnerable customers," added Doran.
"We have also been liaising with other electricity network companies in Great Britain who are already putting in place Smart meter roll out plans and other Smart Grid groups to share our expertise and knowledge," he said.
UK regulator Ofgem has set aside £500m for its Low Carbon Fund for piloting new technology innovation projects for its network and for network operators to bid for. There is no such fund in Northern Ireland, so costs are ultimately borne by the consumer.
The net present value to the UK economy from the deployment of smart grids has been put at £19bn in a report written by Ernst & Young and launched by UK Minister Charles Hendry entitled "A Race Worth Winning".
The report suggests it is better to invest now than have fuel bills dictated by external events. While smart meters are planned between 2013 and 2020 the rollout has not yet been approved by the NI Utility Regulator.
Tanya Hedley, electricity director for the Utility Regulator said it acknowledges the benefits that can be achieved by smart metering for consumers and has approved funding for such projects.
"This will ensure that the Government policy, recently announced, of 80% smart metering by 2020, can be delivered in a manner that provides the maximum benefit for consumers," Ms Hedley said.
"We will be consulting further on the shape of this roll out next year."
Patrick Thompson, operations manager at the Energy Saving Trust in Northern Ireland, believes Smart meters "are a win-win for everyone" with evidence showing that it will lead to householders having much more control over their energy bills and consumption habits.
"You wouldn't shop in a supermarket every week and then accept a quarterly bill based on a load of assumptions," Thompson pointed out.
"Smart meters will mean energy bills that are based on the exact amount of energy used rather than these assumptions giving greater control back to the consumer.
"As long as the savings made by householders are greater than the cost of getting them installed then it surely has to be a good thing.
"If householders are given the right advice so that they fully understand and benefit from them, then there's no reason why smart meters can't be a hugely positive energy saving tool for the UK public."