Greg Clark’s Not So Smart Energy
By Paul Homewood
Greg Clark, Secretary of State for Business, Energy and Industrial Strategy
In a speech at Energy UK on Nov 10th, Greg Clark claimed :
By 2020 every home and small business will have had the offer of a new smart meter. In many cases they will be replacing meters based on technology that is more than 100 years old.
But this is not just technology for technology’s sake. This is about making peoples’ lives easier: ending the use of estimated bills followed by sudden demands for hefty sums; making it easier to switch suppliers and tariffs; providing better information on where you can stop wasting energy to keep your bills down.
Our assessment sees nearly £6 billion of benefits to consumers from the smart meter programme. It will save £11 off the average bill by 2020 rising to nearly £50 by 2030.
But the roll-out is only the beginning. The wider application of smart technology means there are even greater potential savings to be made. That is why today, in partnership with Ofgem, we are launching a call for evidence on how we get there.
The aim is to harness the potential of storage, demand side response and other technologies to create the most efficient, most productive electricity system in the world.
This means reassessing regulation which is biased against storage and aggregators so they can compete on a level playing field with large-scale generation.
If we do this right, a smart system could save consumers up to £40 billion in the coming decades.
Before you run out and put a deposit on a condo in Florida, there are a few things you ought to know:
1) The “saving” of £40 billion is actually spread out between now and 2050.
2) This figure comes from an analysis from the Carbon Trust, which hardly inspires confidence. Their study is here, and shows that the savings are estimated to be between £17bn and £40bn.
So the saving could be as little as £500m a year.
3) Furthermore, if any savings do arise they are likely to be well in the future.
4) Although Greg Clark talks about a smart system , and puts it into context with smart meters, the Carbon Trust study is mainly focussed on demand side response (DSR), storage and interconnectors.
There is nothing very smart about any of these.
The simple reality is that none of these options will save consumers money. At best, they might be a slightly less expensive way to solve the problems caused by renewable intermittency than alternative options, such as building new gas fired plants.
There is nothing smart at all about that.