Without smart grid charges, slogans like 'decentralised energy' and 'smart energy systems' will remain meaningless marketing catchphrases used by the electricity industry to allow them to 'carry on profiteering' as near as possible to their current form.
We desperately need green NGOs and campaigners to campaign for time-of-day-electricity charging.
Only then we will get real smart meters, not the sham ones that are being installed now.
The so-called smart meters, being rolled out in a house near you, are mainly a bit of meaningless hype which won't do the very thing that popular mythology thinks they will do.
That is, to ensure that electricity prices are geared so that they fit in with when electricity is being generated: with lower prices when solar and wind output are high, for example, and rising steeply on cold, still December evenings.
The Government and OFGEM need to implement grid and distribution charges that would discourage electricity companies from supplying energy to their customers at peak times. Such charges would make it much more likely that the electricity industry would encourage their consumers, through their pricing policies, to consume less electricity during peak times.
As the green energy revolution gathers pace, and the number of electric cars increases, we ought to be making the system really smarter. This involves incentivising consumers to charge their electric cars and perform other functions (wash clothes, etc) at times when there is a surplus of generating capacity rather than when there is a shortage.
Nothing smart about 'smart meters'
But practically none of the 53 million smart meters being rolled out across the country can do this. I have heard of one small supplier that offers tariffs according to time of day, but regrettably such efforts will be stymied by the failure of the electricity system as a whole to encourage this type of scheme.
In theory electricity suppliers will have an incentive to encourage their consumers to buy electricity at times when there is a surplus of electricity, and thus when it is cheapest on the wholesale electricity markets (ie power coming from power generators).
But alas, the system does not do enough to encourage this. This is because if a brave electricity company (Green Energy perhaps?) does introduce time-of-day pricing they will help their competitors as well by reducing the general prices on the wholesale market. The other electricity companies will just act as free loading parasites and the smart company will be sharing their gains with them.
One solution to this is for the Government to regulate the electricity distributors to ensure that they introduce substantial charges on suppliers for use of the system when there is peak demand for electricity. Thus all electricity suppliers will have a greater interest in introducing 'time-of-day' electricity charging schemes.
Then we might see some real smart meters being installed that allow this. There are some small variable charges for using the system at the moment but they are paltry compared to what needs to be done to encourage a decentralised energy system that responds to consumers and clean energy needs rather than the needs of the big electricity companies.
Electricity distributors also need to be given more incentives to develop storage systems on their local electricity 'feeder' systems rather than increase distribution capacity from the high voltage network by installing bigger transformers.
Left to themselves, OFGEM, power companies and government will do nothing
However this will not happen if the electricity industry is left to itself. The Government and OFGEM will shuffle a few reports and do nothing of any consequence.
All the electricity industry will do, as witnessed by the current smart meter fiasco, is to channel slogans about how consumers can be greener into feather bedding their own interests. In this case this doesn't extend much further than saving costs on sending around somebody to read the electricity meter!
Rather than put all their efforts into ensuring system flexibility the network operators emphasise how we need more power lines to be built.
Organisations like FOE and 10:10 need to get to grips with the smart meter issue and start making demands. Otherwise we shall carry on hearing the same old stories about how we need dozens of gigawatts more of centralised power stations - rather than decentralised, variable renewable energy sources.
The committees that decide policy are stuffed with with the representatives of the existing energy establishment dedicated to resist change all costs. Without smart grid charges, slogans like 'decentralised energy' and 'smart energy systems' will remain meaningless marketing catchphrases used by the electricity industry to allow them to 'carry on profiteering' as near as possible to their current form.
Please don't let this happen!
David Toke is Reader in Energy Policy at the University of Aberdeen. He blogs at Dave Toke's green energy blog where this article was originally published.