The new UK Government, a coalition of Conservatives and Liberal Democrats, published "The Coalition: our programme for government" on 20 May 2010 in which it has agreed a large programme of environmental policies. In the next Alert we shall examine these policies in detail. One of them, smart metering/smart grids, deserves special mention now. The previous Government had decided that every home and every business in the UK should have a smart meter for electricity and for gas by the end of 2020. Although neither the Conservative nor Liberal Democrat manifestos offered a deadline for completion of a roll out, whilst in opposition, both parties had said that they would bring forward the deadline and complete a roll out within the next five to six years. The Government's latest policy document does not give a deadline for roll-out either, but the policy is plainly important to the coalition. Expect more news about this soon.
The growing smart-meter industry is in the meantime forging ahead with a number of significant roll outs of its own. However, careful consideration will still need to be given to a number of key issues, such as:
- Data protection and security: Smart meters will generate considerable data relating to the consumption of energy by individual households and businesses. Fears over the misuse of such data slowed down the development of effective regulatory frameworks on the Continent. For example, the Dutch Government recently placed an amended Bill before parliament to counter criticism of previous proposals regarding smart meters and in particular the issue of data sharing. The UK Government will need to establish effective policies on data protection and security to ensure an effective regulatory framework and a successful roll-out.
- Interoperability: The interoperability between the various parts of a smart meter network will be central to the liberalisation of the energy markets and the "future-proofing" of the system in anticipation of the roll out of a full smart grid. This is particularly important given the new government's intention to introduce a full system of feed-in tariffs for electricity as mentioned in the Coalition Agreement. Clear intellectual property (IP) policies and perhaps open standards may be required to promote this interoperability, whilst ensuring safe and consistent functionality.
- Coordination and regulation: The regulatory framework is not in place, and whilst roll-out is proceeding, competition problems relating to the interoperability of different meters, are likely to arise unless care is taken.
- Consumer engagement: Recent industry reports suggest that the public are wary of the benefits and implications of smart metering, and especially whether this will increase their energy bills. As a result, consumers will need to be reassured.