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Ofgem mulls how to regulate internet of things, what to do if people don’t engage with smart meters

March 17, 2017

By Paul Homewood




From The Energyst:



cleaning products

What if consumers don’t want to engage in smart energy system?


Ofgem has outlined the exponential challenge of regulating a smart energy market over which it would currently have limited jurisdiction.

In a new position paper, the energy regulator floats concerns around lack of consumer engagement with smart meters, vast swathes of personal data being collected by suppliers and non-regulated entities and whether suppliers might try to pick only ‘desirable’ customers based upon that data. That kind of profiling and segmentation could leave even more customers paying more than is necessary for their energy, it noted.

The regulator said such developments may require it to change supply license rules.

The Future Insights paper also outlines the challenge of engaging consumers that in the main show little interest in energy.

Despite being able to save hundreds of pounds by switching supplier, and being bombarded by advertising as well as doorstepped by increasingly brazen third parties, two thirds of UK consumers are still paying over the odds for their energy. Almost half have never switched supplier. If they don’t respond to relentless messaging and that kind of price differential, are they likely to do anything with a smart meter, if they agree to have one installed?

Rolling out 53 million smart meters in the next three years is highly unlikely at the current rate of installation.

To date, the big six suppliers have rolled out 5.17m smart meters, most of which has been done by British Gas. Some major suppliers have rolled out as few as 130,000.

Even if a significant proportion of consumers accept a smart meter, how many will engage in a dynamic energy market requiring active participation on their part?

Ofgem notes that recent trials, such as Western Power Distribution’s Sunshine Tariff trial, which examined the potential for domestic demand side response, suggest automation will be required to deliver any real benefit in terms of load shifting and financial reward to householders. Ofgem asks how many households might be prepared to cede control of their domestic appliances and heating systems to third parties, what consumer and data protection rules would need to be in place and how and by whom they might be enforced.

Even if everything ‘smart’ can be made simple to use and interoperable – and robust data and security protocols can be implemented and enforced – the regulator has repeatedly emphasised the role of consumer behaviour in delivering a smarter energy system.

The paper, which it stresses is ‘emerging thinking’ from its Insights for Future Regulation project rather than an ‘official’ Ofgem position, reiterates that view.

“Developments such as the smart meter rollout and potential future changes to the appliances that heat our homes are examples of physical change that will enable, and in some instances require, consumers to behave in different ways,” it states.

If habits do not change, Ofgem suggests there could potentially be consequences.

“If the behaviour change necessary for a flexible energy system is not realised, restrictions on choice and activity could in some cases be justified – for example with regards to charging times for electric vehicles,” the paper states.

It concludes by recognising the need for the regulator to prove and move quickly.

Likely far more quickly, and managing far more moving parts, than it has ever done before.


Is there a word that has been so misused as “smart” in the context of energy policy?

What is so smart about making people use energy when they don’t want to, stopping them when they do, and charging a lot more for the privilege?

And why has it taken so long for the supposed experts at OFGEM to work out the problems with smart metering? Mere mortals like me have been pointing out the shortcomings for ages, such as:



1) How many people will bother to even read their smart meters, after the “new toy” enthusiasm has worn off?

There is in fact a very good analogy with on-board computers in cars. They can tell us how much petrol we have used on a particular trip, but how many of us work out the cost and decide not to go again because we can’t afford it?

2) Many people, particularly those who don’t even shop around for best prices, don’t have the aptitude to analyse their energy usage.

3) Even if energy at off peak periods is made less expensive, how many people will make the effort to change their habits?

4) Many people are also concerned about data privacy issues.

5) There is likely to be much resistance to, as OFGEM out it, ceding control of their domestic appliances and heating systems to third parties, what consumer and data protection rules would need to be in place and how and by whom they might be enforced.

This is one major reason why take up of smart meters is likely to be so poor.


Then, of course, we get to the sinister bit:

If habits do not change, Ofgem suggests there could potentially be consequences.

“If the behaviour change necessary for a flexible energy system is not realised, restrictions on choice and activity could in some cases be justified – for example with regards to charging times for electric vehicles,” the paper states.

 How long will it be before smart meters are made compulsory?

How long will it be before our fridges and heating are turned off against our wishes?

Forget about the nonsense of electric cars, as these would tend to be charged overnight anyway. The real threat is that whole neighbourhoods could be switched off at times of peak demand.

And once smart meters are installed, it won’t be long before price rationing is introduced, with households paying a premium for the “privilege” of an uninterrupted power supply.


All of this, of course, has been thoroughly predictable from the smart. It has been clear all along that the claimed benefits of smart meters simply do not stack up, and that on the government’s own figures cannot justify the outlay of £10bn+.

  1. AlecM permalink
    March 17, 2017 12:15 pm

    Already there is a move to offer special deals to match periods of low and high renewable energy production with high and low prices.

    This pricing by demand was always the aim, but the meter security is so bad that it offers immense opportunity for crooks** to skim off cash.

    **defined as people in or connected to the power sales’ organisations.

  2. March 17, 2017 12:19 pm

    ‘The real threat is that whole neighbourhoods could be switched off at times of peak demand.’

    Theoretically perhaps, but a more likely scenario could be individual devices being switched off e.g. freezers, air con etc. via a wi-fi link. The switch off might last maybe 30-60 minutes then it would be the turn of another group of customers. Those agreeing to such practices would get a discount of some sort.

    Meanwhile the big energy suppliers are muttering about ‘death spirals’.‘death-spirals’/1298312

    • AlecM permalink
      March 17, 2017 12:26 pm

      The ‘dark state’ plan is to remove power supplies from poorer, inner city areas. Its purpose is to trigger criminal gang control of black markets as inter-ethnic conflict accelerates.

      We can minimise this by stopping Islamo-fascist immigration.

      • Gerry, England permalink
        March 17, 2017 1:28 pm

        I think ascribing plans like this to them is to completely over estimate their limited intelligence. if it happens it will be like most things, the accidental outcome of dumb government policy.

      • Russ Wood permalink
        March 18, 2017 10:42 am

        I forget who the quote is attributed to, but it goes: “It is not necessary to attribute to malevolence what can be adequately explained by incompetence”.

    • It doesn't add up... permalink
      March 17, 2017 2:01 pm

      Death for the major utilities is coming from the massive losses being sustained by the likes of EOn (€16bn loss in 2016) and RWE (€5.7bn loss in 2016) as a consequence of being forced to implement idiotic energy policy across Europe, including particularly Energiewende in Germany and the UK’s Climate Change Act driven absurdity. That it is unaffordable for customers and has left some 300,000 of them cut off altogether in Germany is purely a consequence of policy.

    • Dave Ward permalink
      March 17, 2017 6:50 pm

      “Those agreeing to such practices would get a discount of some sort”

      Or more likely they would get assurances that they won’t be cut off during supply shortages, while the rest of us have to take what we are given.

      • Gerry, England permalink
        March 18, 2017 5:37 pm

        Or fire up our diesel generators.

  3. Joe Public permalink
    March 17, 2017 12:19 pm

    “(Ofgem) … concerns …..suppliers might try to pick only ‘desirable’ customers based upon that data. That kind of profiling and segmentation could leave even more customers paying more than is necessary for their energy, it noted.”

    Translation: Ofgem failed to acknowledge that certain other customers might pay less for their energy.

  4. March 17, 2017 12:23 pm

    “If the behaviour change necessary for a flexible energy system is not realised, restrictions on choice and activity could in some cases be justified – for example with regards to charging times for electric vehicles.”

    That statement alone should be enough to give any freedom-loving person the shivers. Big Brother will decide whether or not you have light, heat, cook dinner, wash clothes, etc. So you better agree with Big Brother or else. And that would be just the beginning of control over your life.

  5. Robert Fairless permalink
    March 17, 2017 12:46 pm

    I do not like being told lies to persuade me to have so-called smart meters. Smart meters do not, of themselves save money, only you can do that by reducing energy consumption and no meter is needed for you to know to turn off light, heating or gadget. The smart meter is an expensive unnecessary gadget which is not free but will at some stage be paid for by the consumer.
    If you want advice on how to save money and energy I suggest an immediate repeal of the pernicious Climate Change Act, 2008 and the sacking of thousands of government employees in the Department of Energy. That should do the rick.

    • Derek Buxton permalink
      March 18, 2017 11:16 am

      Yes, I could not agree more. Repeal the Climate Change Act, sack the Climate Change Committee, job done. After all, this stupid committee set up the renewables for the benefit of their best friends and then gave them a the means to overcharge us by the high prices offered. The government is not your friend and nor is ofgem. They want rationing, I had more than enough of that during the war, I do not want anymore. It is governments job to look after us and in this century, energy is essential to everyones wellbeing, even the useless government.

  6. rwoollaston permalink
    March 17, 2017 12:58 pm

    And I thought Ofgem was there to look after consumers’ interests.

    As the meters are always connected, they will be highly vulnerable to malicious attacks – viruses, malware etc. As we see with computer viruses, there needs to be no financial motivation – people do this for thrills.

    • It doesn't add up... permalink
      March 17, 2017 2:09 pm

      Ed Miliband’s Energy Act 2010 enshrined that OFGEM should give primacy of green interests over consumers by asserting that green interests were always deemed to be in consumer interests. So the law is actually anti-consumer. It was one of the little disasters that was agreed to without proper debate in the run up to the election.

  7. Joe Public permalink
    March 17, 2017 1:01 pm

    If only someone could invent a ‘day storage heater’ that could be heat-charged via electric resistance elements during the winter daytime when wind power is cheap & (usually) plentiful, and then release that heat after 6pm when demand is high and 900,000 solar installations generate sweet FA.

    • Gerry, England permalink
      March 17, 2017 3:19 pm

      As long as it isn’t one of those static high pressure periods during the winter when there is no wind and lots of mist obscuring the solar panels of course (ask the Germans about the effect of this).

  8. RoyHartwell permalink
    March 17, 2017 1:39 pm

    My supplier arranged to fit a smart meter. A technical problem involving the main grid supplier intervention meant they had to delay. I haven’t told them the problem bas been fixed !

    • It doesn't add up... permalink
      March 17, 2017 2:13 pm

      You do have the right to refuse it. Perhaps you should exercise that right.

  9. Ex-expat Colin permalink
    March 17, 2017 1:47 pm

    I had an unexpected email from Siemens (W. Mids) on behalf of First Utility 2 weeks back to book an installation date. I haven’t and have ruled (bin) the sender email address.

    In F. Utils small print is the likely incompatibility of these devices…so they can FO just on that point.

    My son in London received harassment calls from B. Gas and has blocked their number. The B. Gas ads campaign for selling boilers is a freaking nuisance….like most advertising really.

  10. NeilC permalink
    March 17, 2017 2:41 pm

    Why do we have to limit the use of electricity anyway.

    We live in a modern civilised society with the ability and technology to provide far less expensive electricity than we pay for now. Coal and fracking being the least expensive options.

    But it is the government and their green crap, adherance to the Climate Change Act and EU dictats that prevents that happening.

    Very simply we need, not to close coal fired power stations and build new ones, start fracking and build new CCGT’s, stop the Hinckley Point project and get the S. Koreans in to build a cheaper more reliable nuclear power station, and take away all subsidies for unreliable energy producers. Simple.

    • Derek Buxton permalink
      March 18, 2017 11:19 am

      True, the government has no right to deprive people of energy. when is the revolution?

  11. Curious George permalink
    March 17, 2017 2:42 pm

    Should the power be available to you when you need it, or only when winds blow?

  12. March 17, 2017 3:02 pm

    I put anything with the label “smart” in the same bin that I put anything with the label “green”, “eco-friendly” and “sustainable”.

    • John Palmer permalink
      March 17, 2017 5:43 pm

      ‘smart meters’, ‘sustainable energy’ and such like can be grouped with other such oxymorons as ‘military intelligence’ and ‘user-friendly’ in my view.

  13. It doesn't add up... permalink
    March 17, 2017 3:07 pm

    I think OFGEM need to explain precisely what they are hoping to achieve. The difference between average daytime demand and the rush hour peak is now very small on the coldest days, so there is very little that could be done to reduce the need for generating capacity without moving to overnight shift working on a massive scale.

    It is quite impractical to try to defer energy use simply because there is a lull in the wind for several days, just as it is quite impractical to run storage in the quantities required to smooth output over such periods – let alone the seasonal requirement that applies to solar. That leaves motives of making it easy to cut off customers, or catching them out with fancy tariffs that they don;t understand. In short, they appear to be fulfilling their legal obligation to support green interests to the disadvantage of customers.

  14. March 17, 2017 3:26 pm

    Tell me: how do smart meters affect the aristocracy (wealth, privilege and title)? Does the owner of an indoor pool find it turned off? Would a castle of 95 rooms have to install sensors to stop heating 90 rooms that nobody goes in?

    We drive when we want to. We make a pot of tea when we want to. We’ll go back to coal fireplaces if they turn off our power.

    The elites propose to use the commoners to subsidize their energy wasteful lifestyles.

    • March 17, 2017 6:01 pm

      A simple analogy for UK residents might be the 1st and 2nd class postal services, except that you would have to sign up to one or the other for a fixed period.

      The smart meter would set variable rates for different times of the day.

      • Derek Buxton permalink
        March 18, 2017 11:21 am

        Not acceptable, it is not their call!

      • Oliver permalink
        March 21, 2017 9:59 pm

        Top tip., from posties, quite a few of them actually. NEVER pay for first class. In the automated delivery system all post first ‘n second goes through at the same speed. So first and second arrive at the address together.

  15. roger permalink
    March 17, 2017 4:06 pm

    Changing supplier is simple but then the problems start as the halfwits in charge of the process for your previous supplier interact with the halfwits in charge for your new supplier.
    Conversations are more often than not conducted in broken english and that only after you have spent an age and much treasure waiting to be connected to operatives that are deliberately(?) thin on the ground.
    With most cheaper tariffs being of short duration, due no doubt to the prescribed annual increases of an incomprehensible plethora of green impositions, the frustration and aggravation renders embarking on the process a poor return for the effort required.
    In short, the entire contrived pricing structure is unfit for purpose and could quite readily be simplified by the removal of OFGEM and all it’s works.
    Drain the swamp and MBGA!

  16. John Peter permalink
    March 17, 2017 5:11 pm

    My objective with regards to “smart” meters has always been to be the last to receive one, say a century from now.

    • John Palmer permalink
      March 17, 2017 5:44 pm

      Join the queue!

  17. David permalink
    March 17, 2017 5:18 pm

    With the tempting idea that we will soon be able to charge high capacity batteries with solar power and be independent of the grid for considerable periods would it seem likely that when we do need the grid because our batteries are down that we will be charged at an extorsionate rate for this privilige?

    • Gerry, England permalink
      March 18, 2017 5:42 pm

      Yes, and rightly so since the more time you are independent of the grid the less you are contributing to its maintenance. An annual fee of around £500 sounds good to me.

  18. 3x2 permalink
    March 17, 2017 5:54 pm

    “If the behaviour change necessary for a flexible energy system is not realised, restrictions on choice and activity could in some cases be justified – for example with regards to charging times for electric vehicles,”

    But only so much, in terms of decarbonisation targets, can be achieved in the hidden world of generation. A world hidden from most.

    In order to meet targets people must soon be forced to buy an electric vehicle and heat their homes, reliant 24/7 on magical unicorn energy. A lot more visible to the public methinks.

    • Gerry, England permalink
      March 18, 2017 5:45 pm

      Even in the dumbfest that is the IET’s magazine ‘Engineering & Technology’, a more enlightened member has pointed out that for each million electric vehicles we have, come home time and plug-in a new Hinckley Point is needed. And that is without the shift from gas CH to electric heating and all cooking on electricity as well. To say that they have failed to do any basic sums is an understatement.

  19. AlecM permalink
    March 17, 2017 6:39 pm

    To be announced very soon: my money is on millions of ceramic/metal fuel cells which save > 40% methane use for a given heat plus electricity output AND can work off grid. So, the renewables’ corporations are going to have to slash prices and build power storage/management.

  20. Dave Ward permalink
    March 17, 2017 7:05 pm

    If OFGEM are as ignorant of the realities as this post suggests, they won’t have a cats chance in hell of being able to deal with the security aspects of the “IOT” Anyone who follows technical blogs and forums will know that this multitude of devices have already been used for large DDoS attacks, and that’s before their incorporation in the majority of power consuming domestic appliances has even started. As for privacy issues – only the other day it was reported that a supplier of sex toys has been using them to track users’ sexual activity!
    The last paragraph in the Grauniad link shows the utter contempt that is typical of so many businesses these days. There is an utter disaster is waiting in the wings…

  21. March 17, 2017 9:23 pm

    Some time ago the MD of one of the electricity supply companies was saying that they would not be supplying electricity but managing demand. And MIT have discovered a way to bleed the charge off electric cars when on charge and resending it elsewhere. Not to mention the fact that the EU want to put special microchips in appliances. A right 1984 scenario or is it Brave New World?

    • Gerry, England permalink
      March 18, 2017 5:49 pm

      There is a scenario where the batteries of our electric vehicles is considered part of a storage grid and is used to cover shortfalls in the generating output. So you jump in your car to go to work – that’s with a big assumption that there are any jobs left – and find that to provide you with heating, heat your hot water and make you tea and toast, your car battery is now flat. Oh, well there is always the train. They have changed a bit too to have carriages where you stand and push a bar up and down while a drummer beats time.

  22. Athelstan permalink
    March 18, 2017 12:57 am

    Lest, ye labour under a roseate illusion that, the gubmint have only your best interests at heart, then re focus and: be apprised.

    The greatest enemy of individual freedom is HMG, control is only what they crave and the corporate blob and noveau public sector aristocracy demand it. ie – the ability to tell people what to do, when and how high to jump. Thus, ‘smart meters’ are but one small part of the overall agenda and transport on the road to total dominion.

    NB, TPTB want us all in a vice like hold by the shorts and curlies, what better method than through controlling how much lecky you may be rationed to??

    Think on, read, mark, digest.

  23. tom0mason permalink
    March 18, 2017 5:46 am

    “concerns around lack of consumer engagement with smart meters”

    So more concerned with up-take than security?
    Can the powers that be, not understand that these meters will be hacked sooner or later, and then whole swaths of the UK will be held ransom by outside agents.

    Or, maybe not?

  24. Paddy permalink
    March 18, 2017 7:28 am

    My (diesel) generator is ordered, the installation cabling is in place.

  25. Russ Wood permalink
    March 18, 2017 10:40 am

    Forget about ‘smart meters’ – the so-called “Internet of Things” could be the real world-wide disaster. Most smart techies will tell you (they’ll tell ANYBODY) that an internet device that isn’t behind an active firewall will rapidly become a ‘bot’ that will be at anyone’s command – probably for nefarious purposes.
    Before I had a hard-firewalled router for internet use, my ‘soft’ firewall was trapping attempts to access my computer at the rate of about one try every 15 seconds! So, if those ‘smart’ meters are going to be internet-enabled, users must EXPECT to be hacked. Do you really want your home power to be not only in the control of your power supplier, but at the mercy of a ‘script kiddie’ who’s hacking for fun?

    • Oliver permalink
      March 21, 2017 10:05 pm

      On the upside. If you know a teenage hacker they could work the hacking to your advantage. Nudge nudge wink wink say no more say no more!

  26. catweazle666 permalink
    March 19, 2017 11:45 pm

    Currently, I pay 14.41p per kWH for my electricity and 4.28p per kWH for my gas.

    So if I can get better than around 33% efficiency, it would pay me to use a generator running off gas…


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