National rollout of smart meters is set to revolutionise the UK electricity market by enabling lifestyle-based billing choices similar to the deals offered by mobile phone networks.

Major utility companies say a nationwide system of real-time, networked meters establishing two-way communication between customer and supplier will change tariff structures and help meet green objectives.

Smart meters could turn the existing model of service provision on its head, according to Energy Retail Association head of communications Nicola Bowles.
“We are hindered by old metering technology, which does not allow flexibility in the way we buy and sell electricity,” she said.

“Smart meters also have ramifications for our generation capacity because the UK will not have to rely on extensive, carbon-heavy peak load generation.”
Leading utilities are already considering the possibilities.

“We are looking at different payment options,” said an NPower spokesman.
“There could be ‘happy hours’ whereby you provide half-price electricity for a couple of hours a night, or maternity and paternity deals,” he said. “And by allowing customers to access energy at different times of day, you can spread the load on the grid.”

EDF Energy director of home technology Ashley Pocock said: “Smart meters provide opportunities for suppliers to offer new services and pricing structures.”

But despite industry support, investment in the technology has been slow.

The government’s Energy Review published in May set a target date for national rollout by 2010. But without a regulatory mandate, individual suppliers are loath to upgrade their meter networks because customers may switch to an alternative, non-smart, supplier at any time.

A government-backed scheme to issue householders with clip-on devices to show their electricity use is also muddying the waters. Because the devices are not networked, they are a blind alley, say energy providers.

“The focus should be on smart meters rather than an interim measure that could distract from the end game – the effective deployment of smart meters,” said a Centrica spokesman.