Smart Meter Roll Out Stalls

By Paul Homewood

h/t Joe Public

Only 80 “second generation” smart meters which allow customers to easily switch suppliers have been installed in homes, three months on from the official launch.

Smart meters, which come with an in-home display, allow users to track their energy use and how much they are paying for their bills.

Almost nine million first generation devices – known as "Smets I" – are now in use, but users have reported technical issues including the loss of functionality when changing energy suppliers.

The new software, "Smets II", which connects the meters to a national network known as the DCC, has been championed by the energy industry as a fix to this and other problems.

But answering a written parliamentary question last week, Claire Perry, a business minister, revealed that few have been installed.

Energy companies claim the figure is unimportant because Smets I meters will automatically be upgraded to the new network.

But critics of the roll-out say this is another delay at the expense of consumers.

Last month, the National Audit Office, the public spending watchdog, opened an investigation into the programme, which has cost £11bn so far.

Ross Anderson, an engineering specialist at Cambridge University, said: “The roll-out had no realistic prospect of ever saving enough energy to pay for itself but Whitehall didn’t care as the costs are going to fall on the electricity bill payer, not the Treasury.

“There are no real benefits, except the PR benefit already harvested by Milliband, Clegg and Cameron; the costs fall on every household.”

Read the full story here.

Given the importance of smart meters in the government’s energy strategy, my guess is that, sooner or later, they will be made compulsory.

Meanwhile in separate news Australia:

Electricity prices have hit the front page of The Australian… again.

There’s no good news. Just more price pain.

And this news comes on the same day that the Australian Energy Market Commission (AEMC) is closing its current round of feedback on its review into the market and regulatory frameworks necessary to support the reliability of the electricity system.

According to the article, a federal parliamentary committee has just released a 133-page report containing a list of 23 recommendations in response to the current crisis.

The committee, chaired by Nationals MP Andrew Broad, confirms ‘the reliability of the grid at times of peak demand has become of particular concern’.

The cause?

Australia faced a ‘trilemma’ of needing to meet climate change commitments under the Paris Agreement, ensuring stable supply so the ‘lights don’t go out’, and mitigating rising electricity costs.

The closure of coal-fired power stations has left South Australia and Victoria precariously exposed to the intermittent nature of wind generation.

In Victoria, the shortfall is around 1,000 megawatts. For SA, it’s around 270 megawatts.

The solution so far has been to increase the supply of electricity via expensive diesel generators deployed in South Australia and Victoria.

Gas and hydro have also increased in use. Gas prices are high, so that’s contributing to the increased wholesale price.

On the demand side, the report recommends…

‘Electricity smart meters… for all households and businesses, a move that would raise the cost of power during peak periods in a bid to lower demand…’

Yet, in the same breath, Mr Broad notes…

‘… one of the discussions we had on the smart meter was, does it alter behaviour, and generally speaking, no, people don’t look at them…’

For context, back on the 18th and 19th of January Victoria and South Australia experienced a couple of hot summer days. The heat caused network failures that blacked our tens of thousands of homes. Thanks to a small surplus of electricity generated by Tasmania and Queensland, the lights stayed on for the remaining homes and businesses. However, the price spike in Victoria exceeded $13,000 per MWh. For context, the average wholesale price for 2017 was $66.58 per MWh. South Australia was even worse, peaking at $14,200.

A quick check of AEMO price tables shows the incredible jump in wholesale prices compared to the same time last year:

Now, the article doesn’t say exactly how the ‘flexible’ pricing via smart meters would impact prices.

It does say the pricing could be changed every 30 minutes.

So, let’s take a look at what happened to the wholesale price on 19 January 2018 when the wind dropped off in the face of normal summer demand (remember, that day’s demand was ~1,400MW less than Victoria’s all-time peak of 10,446MW in 2009).

It will be interesting to see the detail of the smart meter proposal. Do they intend to pass on the full wholesale fluctuation? How much warning will they give? What if you’re not home during a sudden 100-fold increase in power price and miss the opportunity to turn off the air conditioner?

Meanwhile, the Federal government is trying to convince the States to adopt their proposed National Energy Guarantee (NEG), which seeks to restore reliability.

Energy Minister Josh Frydenberg has upped his calls for the states and territories – including South Australia and the ACT – to support the plan, as new analysis of the National Energy Market shows Victoria and South Australia struggled to cover their own peak energy needs when the wind isn’t blowing. ‘Despite the best efforts of AEMO, the supply-demand balance in South Australia and Victoria is precarious,’ Mr Frydenberg said.

‘There is no better illustration of this than the need to rush in expensive, polluting diesel generators that use up to 80,000 litres an hour as back-up.’

It is ironic that in the pursuit of renewables, SA and Victoria are relying on expensive diesel and gas to keep the lights on.

Our solution? Deliver lower emissions intensity from brown coal via a Coldry-enabled high efficiency, low-emission (HELE) power station while improving reliability and affordability.