Should You Go SMART and Never Look Back?


We have all heard of the government programme to put a SMART meter in every home and business by 2020, which is a way that the Government plans to bring our energy systems up to date. Basically, energy suppliers (both gas and electricity) are required to install smart meters in every home and business in the UK. The plan is for the programme to take off from 2016-2020 and for it to be managed by the Department of Energy and Climate Change. It is, however, not mandatory for homes and businesses, and you may opt out of the SMART meter installation.

But, what exactly are SMART meters? What is the difference between an AMR meter and an AMI meter? How does it all work, and what benefits will you see as a business? There are still a lot of unanswered questions out there in regards to a SMART grid and SMART meters.

At present, most homes and companies in the UK do not know how much energy they are consuming and what exactly it is costing them. Understanding the consumption patterns will allow both the business and the grid to plan their activities better and work towards reducing losses, thus contributing towards energy savings schemes.

So what are AMR and AMI/SMART meters?

  • AMR is an acronym for Automated Meter Reading. It can be thought of as the first SMART meter as it was a technology used to collect energy consumption by transferring the data from the meter to the supplier by one-way communication. Essentially, the supplier would be able to read off the meter remotely by accessing it via a GSM or other radio signal.
  • AMI/SMART meter is an acronym for Advanced Metering Infrastructure, and this are the SMART meters of today. It is an updated digital version of the traditional meter and not only does it measure how much energy is being consumed but also at what times during the day. An AMI/SMART meter also allows the supplier to communicate both pricing and energy information back to your home and/or business, creating a two-way communication hub.

Both types of meters allow for accurate measurement of your energy consumption, but SMART meters let you know how and when you consume your energy. The closest “cousin” to SMART meters is the Half Hourly (HH) meter[1. A HH meter is an electricity meter that is connected via a phone, GSM, or other radio line and automatically sends updated readings to your energy supplier every half hour.] used in the UK.

Now we know what these meters are, but how do they work?

Each meter has its own secure wireless network system. Through this system, the meter links up to a smart communications hub, and, once connected, it measures and transmits usage every 30 minutes (or other set intervals) to distributors and suppliers. Suppliers gather the data and make it available to you by way of portals, in-home screens, or directly on your meter. For illustrative purposes, the process would look like this:

smart meter inforgraphics-01

We already know that Maximum Demand (MD) meters[2. A Maximum Demand meter is a meter that monitors the load within Power Distribution Networks. It indicates maximum loading current over a period. 05 MD Meters have a load factor of 20%, 06 – between 20% and 30%, 07 – between 30% and 40%, and 08 – over 40%] will, in accordance with P272, become HH meters, which means that these users will already have interval readings and will not need to worry about installing SMART meters for these type of supplies. How do you know if you are one of the affected by this scheme and no longer need to worry about whether you should acquire a SMART meter? Take a look at your supply number (as illustrated below) and check whether the highlighted box corresponds to 05, 06, 07, or 08. If it does, you fall inside the P272 scheme, and your meter will need to be upgraded to an HH meter.


Now, here is the most pressing question regarding this technology: what are the benefits to you as a business for using a SMART meter as opposed to a standard (not to call them dumb) meter? Before answering this, how many times have you received an estimated invoice during your company’s lifespan? While suppliers have become very good at this educated guesswork, can you truly be sure you have not paid too much for your consumption?

The main benefit of using a SMART meter for your home and/or business is to know what you are using/spending as you go. With this type of meter, you will have full access to what you consume and when and you always get accurate bills. Other benefits include but are not limited to:

  • Capturing different points within your business, you are able to see which machinery is using the most and target them.
  • Structural savings available from using your energy more efficiently.
  • Easier and better reporting for all of your stakeholders.
  • Budgeting and forecasting become more accurate.
  • Will help your carbon reduction as you can target your consumption.

There are plenty of other benefits too that could be listed but the above represent the main ones that showcase what SMART meters are all about.

SMART meters can be installed using companies licensed by the National Grid to provide this type of infrastructure, or you can opt in for supplier roll-outs. A word of warning, however: if you are looking for a truly SMART meter, you will need to check that your meter provides regular interval readings and allows for two-way communication as opposed to just monthly readings.

So, should you go SMART and never look back? That has to be a decision you make based on the needs of your company. Do you want accuracy, the ability to examine your consumption patterns in greater detail, and to take control of your usage? If that’s the case, then YES.

However, it needs to be said that a SMART meter, as opposed to a standard meter, would bring with it additional charges on your invoice. A SMART meter needs data collectors (DC) and data aggregators (DA), meaning that you will see additional DC/DA charges on your invoice, which will vary depending on the DC/DA your supplier uses. You can change these providers and thus influence these charges directly yourself. The question you have to ask yourself is, should you stay ahead of the curve and try and take advantage of the benefits, or should you wait for the mandatory roll-out to take place?

Samer Muratovic

Samer (Sam) was the Bureau Services Manager at Alfa Energy. He is an MBA graduate who has been working in the energy industry for the past five years. He has worked in Sales, various supporting roles, and finally Operations before taking on a role in Bureau Services specialising in Energy Data Management, Optimisation, and new product development. He is currently in charge of teams covering North America, SEE, the EU, and the UK market which service all post-sales deliverables to clients across all market segments.