The traditional electricity meter may not have changed much in the last fifty years, but it is about to change dramatically. Regular visits by a meter reader will become a thing of the past, and the meter will acquire a whole range of intelligent capabilities.

What is a Smart Meter?

What exactly is a “Smart Meter”? A range of definitions have been proposed, but they generally include the following:

• a smart meter is linked to a central management system via a bi-directional, digital communication link over which the meter can be configured and interrogated. This enables meter reading to take place without the need for a site visit.
• a smart meter records consumption at various times throughout the day. This information is uploaded to the central management system on a regular basis (eg once per day).
• a smart meter can handle complex tariff structures based on the time of day and other factors.
• a smart electricity meter can be switched from pre-payment to post-payment (or vice versa) without the need for a site visit.
• a smart electricity meter can record energy flows in both directions to support microgeneration feed-in tariffs.
• a smart meters provide customers with real-time feedback on their energy consumption (and the associated costs) via a visual display unit. This information may also be provided via mobile phone, digital TV or the internet.
• a smart electricity meter can act as the communications hub for a Home Area Network that links a range of smart appliances in the home. This network can be used to support automated demand management.

Why are Smart Meters needed?

Although Smart Meters are closely associated with Smart Grids, they are not the same thing. Whilst Smart Grids are primarily driven by the need to control carbon emissions, Smart Metering is primarily driven by the need to:

• reduce energy consumption
• reduce operating costs
• improve management of demand
• improve network availability
• improve customer experience

Of course, it would be foolish to suggest that Smart Grids and Smart Metering are two completely separate issues. For example, they are both likely to require a communications link into every home, and a single link will serve both purposes. However, when a Smart Grid needs to communicate with devices in the home in order to manage demand, the role of the Smart Meter is simply that of a communications hub or switch. Demand management is a responsibility of Smart Grids rather than Smart Meters; the responsibilities of the Smart Meter include metering and providing the customer with information about tariffs and usage.

Understanding the drivers behind Smart Grids and Smart Metering can have important implications for the funding of network enhancements. The majority of Smart Grid Costs would fall on the Distribution Network Operators (DNOs), but they derive very little business benefit from them (apart from the satisfaction of helping to save the planet). For Smart Metering, on the other hand, the owner of the meter does derive some benefit from their investment – even if the benefit may prove to be less than the costs. This helps to explain why the power industry in many parts of the world is in no particular hurry for the widespread deployment of Smart Grids, but there is considerable interest in the roll-out of Smart Meters.

Smart Metering challenges

The transition to smart metering will present some key challenges:

• the scale of the problem. In any one country, millions of meters will need to be replaced.
• gaining access to homes and businesses in order to change the meter.
• choosing a suitable roll-out strategy. There are many possible options.
• stranded costs when existing meters have to be replaced before the end of their normal working life.
• ensuring that Smart Meters do not prevent customers from switching to a new energy supplier.
• choice of communications technologies to provide cost-effective, bi-directional, digital communications links to every installed Smart Meter.
• solutions for homes in very remote locations where a digital communications link would be extremely expensive.
• management of huge amounts of Smart Meter data.
• providing a range of stakeholders with secure access to Smart Meter data.
• establishing and maintaining Home Area Networks to support demand management.
• maintaining physical and logical security of network and IT systems.