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Smart meters and smart appliances – what are they and why should I care?

Photo of smart meter

Flickr/Christian Haugen

Smart meters and smart appliances may help you reduce your electricity use, your bills and your impact on the environment.

Smart meters are already a part of life in Victoria and will become an option for consumers in other parts of Australia over the next few years.

Whether or not a smart meter is worth your while depends how you use electricity and may also be affected by where you live and your housing type. Here we touch on some of the issues that might help you to decide whether you could use a smart meter (and potentially also smart appliances) to reduce your energy use, save money or both.

Smart meters

Smart meters measure electricity usage in more sophisticated ways than old style meters. There are two new types of meters. Interval meters measure power use during particular time intervals, typically every 30 minutes. Smart meters measure use over time, but can also send and receive information by communicating with the energy supplier and the energy network.

Smart meters enable other technologies including “time of use pricing”, “in home displays” and “direct load control”.

By the end of 2012 there were 1.5 million smart meters in Victoria, with most of the remaining 800,000 Victorian households due to get them soon. In the rest of Australia there are few true smart meters – around 50,000 – but more than 1.5 million ‘interval meters’.

At the end of 2012 only about 50% of consumers outside Victoria had even heard of smart meters.

Potential benefits of smart meters

So, what are the potential benefits of smart meters?

ATA Consumer Guide to Smart Meters

The Alternative Technology Association has published a consumer guide to smart meters. The guide helps households and small businesses understand and take advantage of products and services associated with smart meters. Some of these exist now and some will become available over the next 2-3 years.

Potential benefits include up-to-date data about energy use, which may help avoid ‘bill shock’  and provide access to flexible pricing, “energy web portals” and “in-home displays”.

Flexible pricing

Flexible pricing – or ‘time of use’ pricing – means different prices for electricity at different times of the day or week. The different prices are meant to act as an incentive to reduce usage at peak times. Some estimates suggest that consumers could save several hundred dollars per year by changing the time they use some appliances.

From September 2013 all Victorians will be able to choose flexible or ‘time of use’ pricing. Flexible pricing is also offered in some other jurisdictions. It can often be provided with older metering or interval metering.

Time-of-use pricing encourages consumers to shift some electricity use to off-peak hours. The main reason is to reduce network congestion and so reduce the money required to build more “poles and wires”. Reducing peak demand can also mean that the energy network uses less of the electricity generating resources that are called on when demand is high. This may be good for the environment, although this depends on the mix of energy sources in use. In the long run, lower peak demand will mean less need for new generating facilities and transmission and distribution infrastructure, reducing waste and lowering costs for all consumers.

In home displays

An “In Home Display” is a monitor which shows current and sometimes past electricity usage. A display can help identify appliances or behaviours that are using too much electricity. Trials in Townsville and Perth have seen consumers reduce electricity use by 5% and 7%.

Web portals

Web portals can help consumers better understand their electricity usage by providing energy consumption data. In Victoria households with a smart meter can view their energy use information online and track energy consumption.

Smart appliances

A smart appliance is one that can communicate with electricity suppliers,  leading to a more efficient use of electricity. Consumers can benefit through reduced energy use, lower costs and carbon emissions. Other benefits can include remote control of an appliance by the consumer, or by the retailer (see Direct Load Control).

Potential smart appliances include thermostats, washing machines, microwaves, hot water services and refrigerators. In addition to supplying information to the electricity network, some appliances can be set by the user to respond to changes in electricity price. For example a dishwasher or clothes dryer could wait until electricity is cheapest before starting its cycle.

Of course, as a new technology, smart appliances can be expensive. Ecosalon has a good piece on the issues to think about for a consumer considering whether the benefits might be worth the investment (US content but most issues relevant in Australia). Some key points are that “the greenest products are the ones you don’t buy“, that you need a smart meter before a smart appliance makes sense, and that with increased device complexity comes a risk of increased repair costs.

Direct load control

Smart meters and smart appliances allow for (but don’t require) ‘direct load control’. Typically a consumer may choose to accept a reward, such as a one-off payment, or a significantly reduced tariff in return for giving an electricity business the right to turn off an appliance such as an air conditioner on a limited number of days per year at times of peak electricity use.

The purpose of direct load control is to make it possible to reduce the peak demand for electricity that occurs on only a few days per year (mainly on hot days when more people use their air conditioners). Reducing peak demand will reduce the need to build new generators (most of which burn coal in Australia) and additional network capacity: “poles and wires”.

Controversy and concerns

Some objections to smart meters have been raised on health grounds (possible exposure to microwave radiation).

In Victoria, many consumers were upset about the poor consultation by government and the electricity industry, and the lack of choice given to households about the smart meter roll out. In other States smart meters will be optional.

The bottom line

Smart meters may be a tool that helps consumers who want to manage their energy use to reduce bills and reduce greenhouse gas emissions. They may also help consumers who want to hand over responsibility for reducing peak energy use to network operators.

In the meantime here is advice from Do Something about how to reduce your household heating and cooling costs and from WWF about easy ways and more substantial ways to reduce household energy consumption.

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