The Perils of Smart Metering

Alex Henney and I have decided to publish a paper on smart metering that we prepared in February for the Cabinet Office and for ministers. DECC is running a smart metering project that is supposed to save energy by replacing all Britain’s gas and electricity meters with computerised ones by 2019, and to cost only £11bn. Yet the meters will be controlled by the utilities, whose interest is to maximise sales volumes, so there is no realistic prospect that the meters will save energy. What’s more, smart metering already exhibits all the classic symptoms of a failed public-sector IT project.

The paper we release today describes how, when Ed Milliband was Secretary of State, DECC cooked the books to make the project appear economically worthwhile. It then avoided the control procedures that are mandatory for large IT procurements by pretending it was not an IT project but an engineering project. We have already written on the security economics of smart meters, their technical security, the privacy aspects and why the project is failing.

We managed to secure a Cabinet Office review of the project which came up with a red traffic light – a recommendation that the project be abandoned. However DECC dug its heels in and the project appears to be going ahead. Hey, we did our best. The failure should be evident in time for the next election; just remember, you read it here first.

15 thoughts on “The Perils of Smart Metering

  1. The DCC is the data communications company – the new central database that is supposed to read everyone’s meter ever half hour, and pass on the results to the government (and to any utility that says it’s entitled to your data for some reason). The DCC will have to communicate with about 100 million devices; DECC truly believes they can get it built in 18 months. The HAN is the home area network – the mechanism for your appliances to communicate with your controller. The smart metering system is supposed to deliver not just demand reduction but demand response, so people can respond to fluctuations in supply by using power earlier or later. That won’t work without automation, which means the HAN, and there’s no effective work being done on that. So demand response is not going to happen.

  2. The real question is of course, what happens when somebody tries to establish their privacy by “filtering out” or “blocking” the signals.

    I for one I’m in the process of going off grid as much as possible because energy prices are way way to high (over 100% up on what they should be) and are going to get very very much more expensive to cover the cost of those new Nukes The last and present Gov are so keen on and will cost not just an arm and a leg but most vital organs to build / run / decomission / store for the foreseable future and well beyond.

  3. Are they doing anything along the lines of resilience? In the US, the grid is so fragile and overworked that it can break way too easily. Interesting enough, amid 2012-related fears, NASA looked into what a major solar storm could do if it effectively EMPed portions of our grid. They were looking for big-time dependencies. They found 365 major transformers that, if down at once, could essentially take it all down. Or something like that.

    So, plenty of our Smart Grid stuff is about both optimization of resources & resiliency. They’re trying to reap the benefits of decentralization a bit better. Are the British or any European projects aiming for that? Might make for a more justified investment than “it saves energy.”

  4. I has a phone call from British Gas earlier this week saying they would like to replace both my gas and electricity meters with smart meters. I though this was strange because only the gas account is in my name – the electricity account is in my wife’s name.

    When I intimated that I had security concerns they started saying about how the communications were encrypted. After I said that I would need sufficient information so that I could independently verify that the system really was secure the person said they would have to talk to someone else.

    After a long break they came back on the line and said they would flag me as being uninterested in their trial (this was the first mention of it being a trial) and ended the call.

    I am actually quite interested in energy management systems and would like to have the information logged by a smart meter available to me. My real objection is the fine granlarity of the information being transmitted to the power companies. I object in principle to them having access to the fine-grained information and would have concerns about any consumption data aggregated over fewer than 14 days being out of my control.

  5. IT disaster authourised by leader of opposition, likely to blow up expensively around the time of the next election. The Lib Dems are pro too. Sounds like the world’s most expensive political booby trap.

  6. Interesting piece, I live in the US. and a few years ago the power company for our area changed all meters to smart meters. There is no way to validate their meter readings when some bills are suprisingly large. Before they started this changeover they informed us of the benefits, lower costs, etc., and then they added a special charge to pay for their work and the additional cost of the smart meters

  7. Why not simply weight the cost per unit of electricity by the mains frequency? (Explanation of mains frequency here: )

    Cost and feed-in tariff could both rise as frequency drops below 50 Hz, indicating high energy demand, and drop as frequency rises above 50 Hz, indicating low energy demand.

    No centralised database would be required, and a remote off-switch would not be needed either. Appliances could be programmed to respond to the demand as signalled by the mains frequency.

  8. AFAIK, the planned architecture leaves the half-hourly data in the meters and only reports aggregated data in response to a billing request from the supplier. So there would be no “central database”.

  9. Thank you for enlightening us on this ever-increasingly scandalous affair – ever-more relevant in 2022!

    Concerning ‘Recommendation 2’ from one of your linked papers: ‘On the security economics of electricity metering’:

    Could you expand upon why the DNO necessarily “bears the brunt of
    the difference between the power supplied by the generators and the power paid for by user” ?

    While I understand the DNOs have clear incentives to process energy usage for more efficient grid operations, I am still not entirely sure as to how they would make a loss from “sharp practice” initiated by energy suppliers. Would aspects of this supposed fraudulent “cheating” – initiated by energy suppliers as implied – perhaps entail falsely hiking up consumption data unbeknownst to customers?

  10. It’s not just the DNOs but the whole distribution system, including National Grid, which runs the auctions. These have to raise enough money by billing the retailers to pay the generators (both the investor-owned utilities and the distributed generation done via domestic solar panels) plus various other things like reserve / capacity payments. They have to cover technical losses (resistance in transmission lines, transformers heating up) and non-technical losses (electricity theft). There are various feeder meters in the system that monitor consumption at the level of towns and streets but reconciling these against readings from domestic meters is generally too hard because the meters are read at different times depending on when the retailer emails its customers for a reading and whether they pay attention. In short, it’s all very complicated.

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