By Paul Homewood
The Telegraph has run a few anti-smart meter articles recently, not to mention a hatful of letters, of which all the ones I have seen have been extremely critical except for ones from the SmartGB charlatan and Claire Perry.
Has the government been exerting pressure on the Telegraph to provide a counter narrative? I don’t know, but yesterday Ofgem’s CEO was given the opportunity to cut and paste Claire Perry’s propaganda:
Nolan rehashes all of the stale and debunked arguments for smart meters, which we are all only too familiar with. No more estimated readings, putting customers in control of their energy usage, lower energy bills, blah blah.
But this is the real crux of his argument:
Smart meters provide the foundations for an energy revolution as Britain moves to a smarter, cleaner and lower-cost system.
Ofgem, as the energy regulator, is working with the Government and industry to ensure all consumers reap the benefits today and in years to come. Britain is generating increasing amounts of electricity from wind and solar power. As well as being clean, renewables are increasingly cheap.
But because renewables are intermittent, they won’t always create electricity at peak times such as winter evenings when solar doesn’t generate and the wind may not blow.
In the past, energy companies would have built lots of expensive back-up power stations and reinforced the grid to keep the lights on, with consumers footing the bill.
Smart meters save on some of these costs by helping to smooth the peaks and troughs of electricity demand on the system. According to research from Imperial College, having a more flexible energy system, supported by smart meters, could save Britain between £17bn and £40bn by 2050. That means lower energy bills for all homes and businesses.
Smart meters can help shift electricity demand to times when supplies are higher and prices are lower through “time-of-use” tariffs. Rather than charge the same flat rate for each unit of gas and electricity regardless of when it’s used, these tariffs offer lower prices for energy used during off-peak periods and higher prices at peak times.
This is the same principle as Economy 7 electricity meter tariffs, which charge a lower fixed night-time rate, typically after 10pm. But in the future, prices will depend on how windy or sunny it is, or whether there is a lot of demand on the system.
This is because unlike existing “old-fashioned” meters, smart meters can communicate in near-real time with the energy system to help balance supply and demand. If consumers choose to take one of these time-of-use tariffs, their smart meters can then “talk” to smart devices in the home and automatically find the cheapest time to charge or to switch on, saving customers money and time.
Take the driver of an electric vehicle who gets home from work in the evening and plugs in their electric car. If they have a smart meter and have signed up to a suitable time-of-use tariff, it will be able to automatically find a time to charge overnight when prices are lower and ensure the battery is full to drive to work in the morning. According to research by Cambridge Economic Policy Associates, consumers who opt for time-of-use tariffs save money on their energy bills on average. This is on top of the wider savings to all of us from not having to build expensive back-up power stations and grid infrastructure.
However Dermot Nolans’s logic does not stand up to scrutiny. The idea that smart meters will make any significant contribution to solving the problem of intermittency is ridiculous.
Currently the government is contracting for around 51 GW of standby capacity via the Capacity Market mechanism, at a cost of about £1bn a year. This could conceivably rise to £2bn during the 2020s, as old coal plant closes.
However, even if we could smooth day and night demand perfectly, we would still need well over 40 GW of capacity, so the saving on standby payments will probably be in the order of 10%, about £200m a year. Bear in mind as well that the Capacity Market auctions have already factored in a certain amount of smoothing, via Demand Supply Response and storage.
Clearly an annual saving of £200m is no justification for spending £16bn on rolling out smart meters.
As for his claimed savings of £17bn to £40bn by 2050, these are not savings at all. As I have explained before, they simply mean that the suicidal cost of the Climate Change Act might be slightly lower than otherwise .
The second argument deployed by Nolan is that consumers can “save money” by accessing cheaper off-peak tariffs. This however is a bit like the three card trick.
Put simply, smart meters cannot reduce the total cost of generating electricity. If anybody saves by switching consumption to night, others will simply have to pick up the bill. Overall, nobody saves.
The reality is that Claire Perry and her cohort of ex DECC green fanatics have got themselves into an almighty hole regarding smart meters. Millions of them don’t work as intended, the crippling cost of the roll out is now gradually becoming public knowledge, the original claimed savings have been shown to be a sham, customers are becoming increasingly put off by bully boy tactics, and installation targets are likely to be missed by a wide margin.
Meanwhile the contradictions posed by the Climate Change Act are becoming ever more real.
Rather than confront the problems facing us in years to come, the government is hiding behind smart meter technology as a cure all. It is not.
As is becoming increasingly evident, smart meters are going to end up as an extremely expensive white elephant.
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August 13, 2018 at 06:00PM
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