Keeping It Voluntary: the Case of Smart Meters

August 7th, 2014 at 3:00 pm by David Farrar

A guest post by Mike Wilkinson:

If someone buys electricity, the seller needs to measure how much they’re using.  Smart meters do this electronically and they’re read automatically, making them a big step into the digital age.  How best should that step be taken?  By keeping it voluntary is what’s shown by comparing New Zealand’s smart meters with Australia’s.

The New Zealand Government more or less leaves companies to themselves to decide about smart meters.  Competition between electricity companies motivates installation.  There are now smart meters in over 50% of the country’s households and businesses, a figure growing by the day.  And since smart meters here are voluntary, they are installed only when companies want to use them.  They come at no additional cost to consumers.

The approach to smart meters in Australia has been very different.  In 2006, the Victorian State Government directed that over two million smart meters be installed in Victorian homes.  Since it was mandatory, this approach has been much more costly for consumers.  According to this Australian Productivity Commission report (see p. 383), it’s raised households’ electricity bills by over $100 annually.  Moreover, Victoria’s mandated rollout has contributed to uncertainty across Australia, delaying companies from installing smart meters.  In the rest of the country, only a few consumers actually have them installed.  This is in stark contrast to New Zealand, where the majority do.

The long term benefits of smart meters are indeed uncertain.  It isn’t clear which sort of technology is best for them and companies naturally disagree about how worthwhile they are.  New Zealand has been able to work through this – it has kept things voluntary while maintaining competition.  Meanwhile, Australia has shown how government intervention can make things worse by raising costs for consumers and creating uncertainty for companies.

Despite that uncertainty, one thing is clear: consumers in New Zealand are already benefiting from smart meters.  They allow many of us to see our electricity usage on a daily or even a half-hourly basis, almost in real time.  Worried you’re consuming way more electricity this winter?  Just look up your company’s website and see.  Gone are the days of waiting for an ‘estimated’ read at the end of each month.

Politicians occasionally show little respect for what’s occurring voluntarily when they suggest making certain things compulsory.  Labour MP David Shearer recently suggested that New Zealand’s smart meters were ‘plain dumb’.  He proposed introducing minimum standards for them, implying consumers should bear the cost of making those standards mandatory.  This comparison of New Zealand’s and Australia’s smart meters questions the wisdom of such an approach.

Smart meters could become very important in the future.  For example, if lots of people start plugging in electric vehicles for power at the end of each day, these meters could make all the difference for ensuring our electricity networks keep operating.  Whichever way they might be used, though, New Zealanders can be assured that they’ll benefit the most if our Government continues to keep things voluntary and competitive.

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16 Responses to “Keeping It Voluntary: the Case of Smart Meters”

  1. dime (10,120 comments) says:

    Smart meters are great.

    I get a weekly report emailed to me. shows my usage compared to the week before.

    I get an alert if my power usage jumps (often happens when cleaner has been).

    not sure how often the thing are physically checked/ audited? i guess they cant go too wrong?

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  2. soundhill1 (271 comments) says:

    Even if a reader can do 12 houses per hour that is $2 per read. But you can put in your own reading. However then the readers have further to go between reads which become more expensive per read. Also companies use different reading firms, so the journey is being done twice.

    When a smart meters are installed the readers’ jobs decrease, as well as a little social contact for some people, perhaps.

    The old meters could turn backwards if you installed grid-connected solar power. The smart meters may or may not register in reverse, but if they do they can be programmed for a different rate for buying power for selling it. Some retailers buy it for a lot less than they sell it for.

    Some countries have subsidised the buying of power. It does not help the retailer to sell less, except through the line charge they pay to the lines company.

    Solar cells on Ebay are often less than $500 per kilowatt. If you get 2KwHr per day, or $0.50 reduction in power bill, you should be OK if the cells last 3 years average.

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  3. vrcattermole (4 comments) says:

    (Disclaimer: I work for a power company in Australia and the below are my own thoughts)
    Certainly the roll out of Smart Meters in Victoria was something of an issue. The PR for them was terrible and there were a lot of ‘horror stories’ of what was going to happen.
    From my point of view, the abilities of the smart meters are starting to show their strength:
    – Day to day reads to allow people to know what they’re using
    – Monitoring in home displays so you can track your current usage
    – Outages are easier to detect and fix

    Certainly, the ability to turn off and turn on has been good. When I worked on the phones there were few things more satisfying than being on the phone to the network, being told to “tell them to turn the mains on” and hearing the joy of a person who has now got power.

    Further to that, its the newest technology so it makes sense we use it. If you’re looking for a new phone you wouldn’t buy the Nokia 1100, you’d get the latest and greatest.

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  4. insider (1,028 comments) says:

    Smart meters have a lot of potential but there is a long way to go so don’t believe a lot of the hype. The main benefit at the moment is to the power company because they get to substantially lower the cost of meter reads and it makes it much easier for them to control your supply, which may not be an advantage to consumers.

    there will be no great benefit to consumers until smart appliances start to flow and we get differential pricing by time. Think about how often you change your fridge, dishwasher, washing machine to get an idea of when you’d get any possibility of a benefit to start. That’s assuming the meter is going to be the best device to network through, which is a huge assumption. Even then i think it is doubtful the benefits will be that great as most of us can only shift small amounts of power use to low tariff periods.

    being electronic means they can much better handle injecting home generated power than the old mechanical beasties, though i doubt they will last nearly 100 years like some of the old meters.

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  5. Drone (19 comments) says:

    I believe there is a lot of disinformation about “Smart Meters” and I concur with David Shearer’s comment about them being “plain dumb”. As for being able to get “real time” information from them, the company I purchase my electricity from publishes the data to the website three days after I have used the electricity, and is unable or unwilling to break the information down into the multiple meters I have. The data is of no use in assisting me to know, control or limit in real time my electricity usage.

    The major advantages come from the electricity companies no longer needing to pay meter readers, and the fact that the new meters are accurate, and the old electro mechanical meters slowed down over time thus recording less electricity usage.

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  6. sooty (65 comments) says:

    I want David Shearer hooked up to one of these ankle bracelets on to the internet so the voters know where he is 24hrs a day. Then we will know if we are getting value for money.

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  7. EAD (1,327 comments) says:

    ‘Smart’ meters allow energy companies to shut down devices when there isn’t enough power to go around. Quite simply, they are a measure of control.

    Like plain packaging, like anti smacking laws, it is simply a sign of the desperation of the Nanny Party to control the citizen instead of meet demand because lobby groups refuse to accept that “they” are the biggest threat we have. What will they do when they’ve destroyed all functioning business? Who will pay their bar tabs then?

    Replace “Smart” with “control and ration”. It’s 1984 everyday for the Nanny Party

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  8. EAD (1,327 comments) says:

    Continuing the 1984 theme, this is “doublespeak” lifted straight from Orwell polemic. This is where a shortage of electricity will require demand to be controlled to bring supply and demand into balance. This will be engineered by forcing up prices artificially. Our electricity is then rationed out on price, driving down consumption to bring the system into equilibrium.

    This apparently is seen as “giving consumers much more control of their use of energy”. This is how “smart meters” are being sold, with hardly any mention of the fact that, not only can your supplier control your energy consumption, it will need to do so in order to prevent widescale blackouts as the Nanny Party encourages more energy consumption via it’s deliberate mass immigration programme while simultaneously failing to increase capacity with it’s continued building of economically useless windmills that often generate zero/nil/nada electricity.

    The whole thing is based on rationing your energy consumption.

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  9. insider (1,028 comments) says:

    @ drone

    as an adult if you don’t know by now that the more you have on the more it is costing you then no amount of smart meters is going to compensate for your basic lack of insight.

    And you know how to control your use? It’s a novel device called an off switch. It is guaranteed 100% to reduce your power consumption.

    shearer is just plain dumb, and he’s not the only one

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  10. ross411 (880 comments) says:

    I would love one of these smart meters, and the ability to track my power use without having to monitor it manually.

    However, I was talking to someone who installs them, and he said that the ones he deals with were service oriented. That means a large company in the United States provides servers where the data goes, and the lines company or electricity provider, pay (and thus we pay in reality) for access. He thought this was a ridiculous and unnecessary contrivance intended to inject that company indefinitely into the electricity revenue stream, and was against the meters because of it.

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  11. marcw (255 comments) says:

    There is a new wireless smart device coming available later this year from a company called efergy (efergy.com). This will allow real time monitoring via pc or smartphone apps of the appliance plugged into the device at the wall outlet. You will also be able to remotely switch on/off, and set timers. A real smart-meter would enable these functions in the meter itself, but obviously this will take time to be implemented in conjunction with a modern redesign of home distribution boards. I agree with the commenters above – today’s meters are mainly for the benefit of the retailers.

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  12. insider (1,028 comments) says:

    There’s no great science in monitoring your electricity use. Look at your meter, check the reading, check your watch, come back at a set time later, check the new reading, do some mental arithmetic and there is your usage. Or easier still, every month read your electricity bill. If you want real time monitoring you can buy little meters you can put on your plugs which will tell you how much you’re using.

    But you won’t get real time monitoring from your meter until it is networked into a reader, and almost none can do that. It makes no difference anyway because we don’t have time of use pricing for homes.

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  13. Lance (2,715 comments) says:

    @marcw
    What on earth are you going to turn off?????
    Seriously, think about it.
    Hark…Oh power is more expensive right now, I will switch off the lights/tv/ heater etc. Bugger, it’s dark!

    No… silly without appliance integration and even then there is limited scope. There are some solutions on the way (I know) but I hear a lot of things being said by politicians etc (esp the Greens) about this new power managed world but most of them don’t understand the level of integration needed and that someone has to pay for it.
    Why would an appliance developer spend hundreds of thousands or even millions of dollars developing/modifying a smart appliance that is grid friendly when there is no return?

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  14. Harriet (5,132 comments) says:

    DPF#

    I’ll check today but here in QLD a mate recently paid just $50 to Ergon energy for a smart meter and a whole lot of other stuff such as light bulbs and shower nozzles. They’ve been offering that deal for two or three years now and I believe the uptake has been very good. My mate is very impressed with the meter. I was going to get one for myself – thanks for reminding me.

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  15. insider (1,028 comments) says:

    @ Harriet

    before you rush off and get one, think about what you’d actually get out of it. Think about what lance says above, are you really going to go without light,heat, cooking when you need it because the meter is spinning fast? But if they are chucking in a bunch of led light bulbs then it could be worth it as they cost about $10 each.my Panasonics are rated at 25,000 hours or,25 years. They are very good. Compact fluorescents are rubbish in comparison.

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  16. stuarts-burgers (97 comments) says:

    I have a Smart meter that connects to Meridian (disclaimer I am a share holder but so are lots of others )

    I get a 0001 to 2359 graph showing my usage in half hour blocks plus a costed usage graph for each of the last 7 days at 6pm each night. Yes it is 18 hours out of date but it lets you look at patterns. I also make use of their Peak, Shoulder, Off peak rates half price electricity on the weekends and 9pm to 7am makes you adjust your usage.

    We were out of the house for earth quake repairs and our usage dropped to about $1 a day then one day it was $12 I had a look at the days graph and saw that at 8am the electric use ramped up until 9pm I spoke with the contractor and he said yes the plasters had big heaters going to dry the plaster. We came to an agreement over the Electricity use 8-)

    Smart Meters work for me but then I look to what I have used every day and if we have a spike try and look for the reason and if possible move it in to the Off Peak times.

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