50: Can a smart meter change your life?
Can a Smart Meter really change your life? This episode marks the fiftieth full-length episode of Local Zero - Matt, Becky and Fraser reflect on 50 episodes, EVs, and the recent energy cap announcement before being joined by guest Jeremy Yapp. Jeremy is Head of Flexible Energy Systems at BEAMA (the UK Trade Association for Manufacturers and Providers of Energy Infrastructure Technologies and Systems). Jeremy outlines how just how crucial a role Smart Meters can play when it comes to budgeting, and what we need to succeed in a smart energy transition.
Essential Reading:
Episode transcript
Matt: Hello and welcome to (drum roll please) the 50th episode of Local Zero.
[Music flourish]
How time flies when you’re having fun, eh, Becky?
Rebecca: Yeah [laughter].
Matt: Look, to mark the occasion, we’ll be exploring what a smarter, more local energy system might look like and feel like for us all.
Rebecca: And as some of you might be aware, last week, we recorded our second-ever Local Zero live podcast. We did this one in London and thank you again to all of our contributors. You can listen to the live recording wherever you get your Local Zero podcasts. It’s on there. It’s come out as one of our usual podcasts and it is and was a very fun episode to record, wasn’t it, Matt?
Matt: We had a lot of fun, absolutely, but today and, in fact, joining us at the summit last week, last episode, was Jeremy Yapp, a very vocal and engaged member of the summit in the audience. He’s joining us today to kind of reflect a bit on the summit. Jeremy is Head of Flexible Energy Systems at (this is a bit of a mouthful) The British Electrotechnical and Allied Manufacturers’ Association or, conveniently, BEAMA for short.
Jeremy: The benefit of the smart metering programme in the early days, some people couldn’t believe they were now able to budget to the extent that, ‘Yes, I can give my child fish fingers tonight because I know exactly how much I’ve got on my meter and I know how much I’ve got left.’
Matt: BEAMA are the UK’s trade association for energy infrastructure companies and really, they’re working with manufacturers to deliver a safe, low-carbon, reliable and smart energy system. So Jeremy has a lot of thoughts and we’re hoping to hear more today.
[Music flourish]
Rebecca: Absolutely and before we get into our discussions, do remember to join us on social media. So if you haven’t already, find and follow us @LocalZeroPod on Twitter to get involved with the discussions there. You can also email us at LocalZeroPod@gmail.com. We love hearing from you all and do remember to subscribe to the podcast on whichever platform you use for your podcasts like Apple, Spotify – any of them. Go there and subscribe and that way, you’ll get these wonderful episodes of Local Zero delivered straight to your device whenever we release them.
[Music flourish]
Matt: So Becky, the big 50, how does it feel?
Rebecca: Wow! Do you know what, Matt? This year, on a personal note, I’m turning 40 and so it feels very exciting to have so many big...
Matt: Oh my goodness! Two milestones, yeah.
Rebecca: Two milestones happening within like a month of one another. No, it’s so exciting that this is our 50th episode and as you said, time has flown. We started this in the run-up to COP. It was a year to go to COP. That was quite a long time ago but it doesn’t feel like that.
Matt: Yeah, and it was in the darkest depths of the pandemic as well.
Rebecca: Yeah, it was.
Matt: It was something, I think, for us to kind of sink our teeth into during that really difficult and quite isolating time. It was lovely to have that. A huge shout-out to the whole team. Fraser can’t be with us today, sadly, but to our production team, Dave, Carys and also Patrick. Actually, Patrick has been really busy pulling together a kind of back catalogue or The Greatest Hits, I like to call it, of all of our episodes which are on our website LocalZeroPod.com. If you go on there, you can just type in any subject that you’re broadly interested in, assuming it’s related to what we’ve covered, and they’ll just pop up. It’s great. It’s a really useful resource for teaching, learning and just general kind of knowledge. Yeah, check it out.
Rebecca: Absolutely and while we’re on topics that are interesting to us, why don’t we pick up on EVs, Matt, because this is a topic very close to your heart right now.
Matt: Well, yeah, so I’ve been spending a bit of time... so I drive around in a... not too old but it’s a four-year-old or five-year-old VW Estate. It’s a diesel, right? We’ve got the one car and we don’t want two for obvious reasons but I would love to go for an EV but I’m kind of begrudgingly drawing the conclusion that I just can’t afford one [laughter]. I’m not rich and I’m not poor but I’m very much in that middle bracket and I’m thinking, ‘If I’m struggling to get this, the bulk of the population is not going to be there.’ I’m starting to go full circle looking at plug-in hybrids and wondering what they might do. Do I stick with the diesel? If I sell it, is somebody else going to drive it to death? Maybe a taxi driver might pick it up and drive it four times as hard as I would every day. I’ve found the whole journey really, really complex and I would like to think that I spend most of my waking hours working and thinking about this stuff anyway [laughter]. So it’s been an eye-opener. It’s been a real eye-opener.
Rebecca: I mean I do have an EV and the only reason that I was able to have the EV is because it’s through a company scheme and so the salary sacrifice schemes make it not out of reach from an expense perspective but it’s a different model, so you don’t own a car like you would otherwise. We’ve got it for three years and then it goes back. I’m in the same boat as you, Matt, and so if I would have bought my EV, it’s worth 600 times more than my actual car that we sold [laughter].
Matt: Wow! Were you in like a Fred Flintstone car [laughter]?
Rebecca: A little bit. I’m pretty sure it was and so I don’t know how much longer it will be on the road.
Matt: No, but they’re pricey.
Rebecca: They’re pricey.
Matt: They really are. Some of the stuff that’s coming on... particularly if you’re wanting to get something that’s German-engineered, dare we say it, you are paying big money.
Rebecca: You are paying big money. Do you know what though? Very interestingly, I was having a lot of conversations about EVs with the cab drivers in London when we were there for our summit a couple of weeks back. I had to take a few taxis because I was lugging around a massive suitcase and the Tube isn’t the friendliest place to be doing that. So I took a few taxis and, in fact, both taxis that I took were full electric vehicles.
Matt: Oh, I haven’t been in one yet. Are they good?
Rebecca: They are good. I would say you probably may have been in one and not even known because, for most purposes, they look the same. I only knew because I got into very engaged conversations with the drivers. They were both telling me that, from a financial perspective, it’s a different kettle of fish but there are so many other barriers that they are facing, particularly around access to charging infrastructure. It’s just not there, even in London. Both of them were telling me of their experiences of pulling up or wanting to be able to charge during the day because obviously, they do a lot of miles and almost always the chargers are taken up by other cars or broken. I have to say my experience as well, because I’ve done some long journeys in my EV, has been very similar. The infrastructure, when I can charge at home and drive around from home, is great.
Matt: Yeah, it’s the longer journeys.
Rebecca: Yeah, it is, absolutely.
Matt: Oh my goodness! We have had a late entry. Fraser, you’ve snuck in through the back door [laughter]. We’ve made your apologies but you’re here. How are you?
Fraser: I am marvellous. How are you guys?
Matt: We’re good. We’ve just been shooting the breeze and we were about to move on to the price cap which has obviously been big news, apart from the death of the Queen which has consumed all news outlets for the last 10-14 days but it was announced at the same time as, sadly, the passing of the Queen. Now we know some of the details and we’re just mulling this over. Fraser, you’re probably knee-deep in this with your own work.
Fraser: I think it’s the classic thing of we welcome the support and we welcome the measures. It will do some good. Bearing in mind, there are lots of caveats to this and lots of details but a capped rate of £2,500 per year is still double what it was this time last year. This time last year, we said on the pod before that anyone working in fuel poverty worried that the price of energy exceeded £1,000 a year. The most vulnerable people and the lowest income people were already in trouble at that rate and so when it hit £1,900 at the start of this year, we thought, ‘Oh dear, this is going to be horrendous,’ and it was. A lot of people are very much down the hole with this now. Our thinking was that at least if we can stop it at £1,900, then maybe a lot of these people have a fighting chance. £2,500 is much better than the £3,500 or even the £5,000 that was predicted for January into April time but it’s still a lot of money and there are still a lot of people who are already in trouble because of the rising costs of energy and the rising costs of gas and it will do little to alleviate a lot of the pressures and the spiral of hardship that’s already kicked off for a lot of people. I absolutely welcome the cap of £2,500 which is better than nothing but we’re going to need to see a fair bit more if we’re going to really tackle the scale of the problem.
Rebecca: That’s one of the most measured responses I think I’ve ever heard from Fraser in my lifetime.
Fraser: You don’t let me swear on this podcast [laughter].
Matt: Yeah, the producers have had a word. The Resolution Foundation, who have been really great commentators throughout this energy crisis, has come out and basically said this is a regressive approach. Before Truss’ government came in – and we can and have said what we like about the previous administration – you could argue that Sunak’s approach as Chancellor was much more progressive in terms of targeting support at those who most needed it, whether it was through council tax, disability benefits, universal credit and the uplift around those benefits. Here, it’s just a sort of blanket cap. So the Resolution Foundation has basically said that the richest households are going to get, on average, twice the living support than the poorest households. Leave your politics at the door. Objectively, that doesn’t sound very fair.
Rebecca: It doesn’t sound very fair, especially when this is a measure that is really being introduced to help some of those poorest households. It feels like, as you said, a blanket measure that hasn’t been particularly well thought through and the implications of that haven’t been particularly well thought through. I think something else that really, really frustrates me and it continues to frustrate me is the lack of big-picture thinking when it comes to the design of a whole lot of policies. A lot of the design feels very linear and almost like we do this and this will happen or this is a problem and this will happen.
Matt: Rushed [laughter].
Rebecca: Yeah, rushed but it doesn’t think about all of the... it’s going to be an absolutely terrible time for a lot of people and I want to acknowledge that but let’s just bring it back to finances which we know that this government cares a lot about. If we’re just talking about it from a financial perspective, think about all of the additional costs that are going to be incurred by our health system simply because of people becoming sick and living in cold homes. If a smarter policy was developed that could target that... it’s almost like there’s these two separate systems that aren’t being brought together in the thinking and in policy design.
Matt: I quite agree. I mean the fact that we don’t think about fuel poverty and the NHS in the same sentence is madness...
Fraser: Ridiculous.
Rebecca: Bananas, yeah.
Matt: ...because of the strain that it places on it. Listen, everything is okay because fracking is back [laughter]. Fracking is back, baby, and it’s bigger than ever. Today, we’ve had various announcements about lifting the moratoriums. Look, I have personal views but professionally on this, a fascinating piece came out in The Guardian yesterday from Chris Cornelius, who is the geologist who founded Cuadrilla. Cuadrilla goes hand-in-hand with fracking. He basically said, ‘It ain’t ever going to happen in the UK because the geology is just not suitable for this like the US.’ He said that lifting the cap was a political gesture. Fascinating piece. What’s your take on this?
Fraser: Of course it was. It’s a political gesture just as the appointment of the new Head of BEIS is a political gesture, absolutely. That’s what this is in its entirety. I like that extremely practical, physical ‘it just won’t work’ approach to it. As any kind of solution to the crisis, to energy security and to resilience, it’s a nonsense solution, right? It’s way too long-term. Nobody actually wants it. Communities don’t want it and people don’t want it in their back gardens. There’s no real support for it, so it’s hard to figure out. There’s also no real huge economic benefit to it compared to if you want to get shovel-ready renewable projects in the ground rather than 24, 25 or 26 years down the line. So it’s hard to think of it as anything other than someone coming into a new post trying to rile people up or making a signal to those kinds of companies that, ‘Actually, we’ve still got your back on this.’ Does this speak to the fact that the response that we’re seeing just now to the energy crisis and to the medium and longer-term security of the energy system hasn’t been thought through and it hasn’t been joined up? It really isn’t something that we can rest our laurels on just now.
Rebecca: 100%. I mean to lift the moratorium on fracking and not onshore wind feels like madness to me; to not be putting in place better measures to support local action around efficiency, retrofit and heating feels like madness to me. In some ways, I’m just not surprised.
Matt: Oh no.
Rebecca: And I’m not disappointed because I didn’t expect anything better but what this really does for me is emphasise the importance of local action, the role of local authorities and the role of really innovative companies like Octupus who I know you want to talk about, Matt.
Matt: As we’re recording, I think the mini Budget... they’re calling a mini Budget but it might as well be a mega Budget from Kwasi Kwarteng, I think, tomorrow. The watchword is growth, growth, growth. I’ve said the watchword three times just to emphasise it. It’s about free-market rules. Take the breaks off, cut the red tape and let’s see where it goes. Now Octopus are an interesting example of how you can do really exciting things through the market. I was keeping a note of some of the Smart Export Guarantee prices; basically, the price you get as a household for exporting excess solar. When they scrapped the Feed-In Tariff back in 2019, shortly after that, the Smart Export Guarantee came into effect when electricity prices were relatively low and you were only getting maybe four, five or six pence per kilowatt-hour. They’re now offering, and this is a flat guaranteed rate, 15 pence so it’s tripled in that time and if you’re willing to go onto their agile tariff and take the market price, that can be much, much higher, particularly if you couple that solar with some storage and discharge when the price is highest. It bleeds into what we’re going to talk to Jeremy about in a moment and what your home might look like in the future. I just see these signals for that middle who have some capital, who are concerned about their energy prices and this is just another reason to go down that kind of microgeneration smart storage route.
Fraser: I would say so, yeah. I would say so, definitely. We’ve all spoken on this amongst ourselves about people that we know who maybe hadn’t considered this before and are now seriously looking into it.
Matt: Before we bring Jeremy in, Fraser, you have moved to deepest, darkest Angus and you’re in the sticks somewhat. Are you looking at setting up your own microgeneration commune? Can I come and live there at any point in the not-too-distant future? [Laughter]
Fraser: Yeah, that’s entirely the plan.
Matt: Great.
Fraser: Yeah, we’ve been looking into solar and increasingly, I feel like maybe I’ll just draw on my tradespeople friends and family and we’ll start an installation company because we cannot get anyone to come and install this just now in this area for love nor money but we certainly are looking into it. In terms of the cost, let’s take an average cost of £10,000 for maybe a 4-kilowatt solar installation and a battery to go with it, originally, that might have taken you seven, eight or nine years to recoup the money but with prices as they are just now, in terms of the saving that you’re making, you can recoup a lot of that in three or four years rather than seven or eight years. It feels like if you’ve got the privilege and the luxury of being able to do that or to finance that, then it certainly feels like a no-brainer.
Matt: Come the Zombie Apocalypse, I’m packing up the Passat and I’m making my way up to yours.
Fraser: Bring it on. I’ve built my raised beds. We’ve got some nice garlic going [laughter]. Yeah, we’ll make it happen.
Matt: Good stuff.
Fraser: Yeah, unfortunately, I can’t stick around for what I’m sure will be an incredible conversation today but happy 50th episode, team, and we’ll catch you for the next 50.
[Music flourish]
Jeremy: Hello, my name is Jeremy Yapp. I am the Head of Flexible Energy Systems at BEAMA which is the trade association for the energy system.
[Music flourish]
Rebecca: Welcome to the show, Jeremy. We’re so pleased to have you here.
Jeremy: Thank you very much. Really, really good to be with you today, Becky and Matt. So I’m a long-time listener and a first-time caller to Local Zero podcast. Actually, this is my first podcast experience but I do listen to your podcast.
Rebecca: You’re not just joining us on any episode. This is our 50th Local Zero episode.
Jeremy: Get out of town! Isn’t that exciting? That’s great.
Matt: You should feel honoured, Jeremy.
Jeremy: I do feel honoured [laughter].
Matt: So Jeremy, we’ve got to begin at the beginning which is what is BEAMA and what is its interest in a smarter and more local energy system?
Jeremy: Thanks, Matt. BEAMA is a trade association that’s been around for about 120 years or so. It’s a nice little story. In the late 19th or early 20th century, there was a sad beginning. I understand that there was a terrible accident in a mine and people died. There was a lot of talk at the time that they were blaming these fatalities on these new-fangled electrical lighting systems that were in this coal mine which is actually, I understand, not what happened. There was a parliamentary enquiry and there were all sorts of things that happened. So these companies got together and said, ‘Right, we need to make a submission to government to explain that it wasn’t our fault and it wasn’t the electric lights that caused this problem.’ That worked and they realised that there were other causes of these fatalities. At the end of it, all these companies said, ‘That went well, didn’t it?’ It was a little bit of evidence-based policy-making based on industry coming together to present something to government that explains why something happened and, thus, BEAMA was born. Now, ironically, we don’t do lights but we do just about everything else in the electrical system; so plugs, sockets and wires all the way up to the transformers, the switch gear and the great big cables that you have in the network system. BEAMA represents mostly manufacturers and some service providers in the electrotechnical space. There we go.
Matt: Fantastic.
Jeremy: There’s our life story for you.
Rebecca: So from very, very interesting beginnings, clearly, those manufacturing companies were brought together by a common cause. Do you find now, with such a diversity of different organisations that are your members, that you still see that common cause, that coming together and bringing that kind of coherent voice? How does that play into, I guess, not the transition towards electric lighting that we might have seen 120 years ago but the transitions that we’re now experiencing?
Jeremy: Yeah, so, Becky, I think that’s changed for me in just the nine years I’ve been at BEAMA. I was working for the smart metering programme in the Department of Energy & Climate Change and I came over to BEAMA to work on the smart metering programme and at the time, nine years ago, the answer to your question, Becky, would be very different to what it is now. At the time, smart metering was still contested and so we were still developing... I’m not going to give the acronym but we were still developing the technical specifications around smart metering that would allow smart electricity and gas meters to be rolled out to 26 million homes. What that would do is mean you no longer have to check your meter and have someone come maybe twice a year to look at your meter and work out your bill but you would have knowledge of your bill in real-time so you could plan your energy. You could budget your energy. You could identify whether you’re using too much or whether you could afford to use more and all sorts of things like that that the smart metering programme enabled. At the time, we were still working out the technical specifications for that. So I would say that nine years ago, there was a lot of pull and push within the BEAMA membership as to how best to go forward with this. I would say that there were a few doubters about the value of that smart metering programme. Now, the answer to your question is... and I’m not just saying this and I’m not here to promote BEAMA. I’m here to talk about what we want to talk about but I would say I’ve never seen BEAMA more aligned. The question of whether we go smart or not is a question for five or ten years ago. Now, we’re talking about what the path is to net zero which is a very, very different question.
Matt: If I can come in here, I guess the two are linked, right? The smart meter rollout really was about providing a core plinth or foundation for us to unlock smarter use, smarter storage and smarter microgeneration of power in our homes and businesses. You were at DECC (Department of Energy & Climate Change) and moved into BEAMA with this kind of focus on the smart meter rollout and how we could make these homes and businesses smarter. In your eyes, what was and what remains the vision for a smarter energy system? Going back a decade, is the vision still the same? Are we just still on that same journey or have things evolved?
Jeremy: I think that’s a really good question and I think, as always, some things have stayed the same and some things have changed. I would say one of the big changes is now we are talking much more urgently and much more seriously about moving away from what, at the time, we thought of as a multi-vector smart system. A lot of the cost in the smart metering programme is set up to allow you to smart meter gas as well as electricity. Others will have different views but my view, and I think the view of many BEAMA members, is that that is becoming less important. After 2025, when it will no longer be legal to put a gas boiler into a new build and then as of the 2030s or 2040s when we will see most gas boilers by then be replaced, the importance of gas metering is much reduced. On that level, I think some of the complexity disappears but what stays the same is the same impulse which is we want consumers to have knowledge and, therefore, agency and control over their energy use. Everyone is on contracts these days but in those days, you could always find out how much credit you had left on your phone but you couldn’t easily find out how much credit you had on your electricity or gas bill. Now, those things are much easier to do. I, personally, don’t feel that that’s a game changer and I think that some of the really big things about smart metering remain unrealised but that’s for later.
Rebecca: I mean that’s such a different context because if just go back before smart metering, honestly, Jeremy, sometimes I just look in... horror is probably too extreme, at the lack of knowledge and understanding that the energy sector had about what was happening at what we now call the grid edges. There was very, very good knowledge of what was happening along the transmission lines. I mean that’s the veins and arteries of the system and there was very, very little knowledge about actually what was happening down at the capillaries and into homes. That was because we lived with a system where you didn’t need that knowledge. We had that centralised generation and we could manage it in a centralised way. Power went to end users and we could support a reliable, affordable energy system without needing any of that information. If you look now, the context is so vastly different with distributed generation, the shift to heat pumps, the uptake of EVs and storage systems. I mean it’s such a different world and I agree with you that it feels like the smart metering... the access to data and data that can be delivered in real-time to households but also to other stakeholders... the ability to use that to manage this much more complex dynamic system, to me, the smart metering programme is the... we talk about the households but it’s obviously data that we’re collecting along the grid. We’re making our entire grid smarter. The opportunity that we have to use that data to manage our systems in smarter ways...
Matt: I just want to add one more thing to that, Becky, just before Jeremy comes in. I think we’re maybe... underselling is the kinder word and misselling is maybe a bit too strong about the value of these smart meters because a smart meter, in my mind, and the primary role of it is to provide that data that Becky is outlining which can then help the network companies, the system operators, the energy suppliers and the sector to figure out where they need to reinforce networks, where they need to add additional generation and where we’re maybe not making the most of local consumption of local generation. Actually, the system benefits and system savings of getting to net zero will be substantially reduced with that data and that’s about a kind of system socialised cost/benefit versus an individual ‘I’m going to go on to a time-of-use tariff and benefit personally.’ Your take, Jeremy?
Jeremy: Lots to say. One of the challenges is that we are talking about lots of different kinds of data. Let’s use the word ‘resolution.’ The in-home display which is connected to your electricity meter is going to give you near real-time data. That’s going to tell you, in ten-second increments, how much energy you’re using at the time. Your in-home display will give you the same amount of detail about your gas use in half-hourly blocks and that’s because the gas meter is a sleepy device in that it actually goes to sleep and wakes up every half hour.
Rebecca: It sounds like a dream [laughter].
Jeremy: I know, although it does it 48 times a day. So if you have very young children, then you might sympathise with the gas meter [laughter].
Matt: It’s never got that bad but close, yeah [laughter].
Jeremy: So you’re getting half-hourly readings from your gas meter and you’re getting ten-second readings from your electricity meter. Now that’s fantastic. If you want to turn things on and off, you go around your house and you say, ‘I’m just going to turn the toaster on and watch the dial go up.’ I only have to wait ten seconds and I can see that it costs me an extra 37p an hour or 80p an hour or whatever it is to run a toaster. That gives you a sense of how much your tea, your toast, your lights and then all the baseload stuff of your fridge and computer are using and how much they cost you. That’s terrific but it’s not necessarily changing your life. Can I just give two little vignettes or examples of how a smart meter might change someone’s life or be influential? But then I want to talk about what you were saying, Becky, before about low-voltage visibility which is the absolute Holy Grail. The example that we always used in the early days was the heat or eat decisions and there really were lots of tests of this and lots of focus groups and the benefit of the smart metering programme in the early days, some people couldn’t believe that they were now able to budget to the extent that – ‘Yes, I can give my child fish fingers tonight. I can afford that because I know exactly how much I’ve got on my meter and I know how much I’ve got left.’ Obviously, it’s horrible to be making those decisions and I say this as someone who, as a child, my parents made heat or eat decisions when I was three years old, so I get how difficult that is. Well, I don’t personally but I have some experience of how difficult that must be. The empowerment that a smart meter gives you and that allows you to budget within a week just can’t be overestimated. What I would also say is sometimes it works the other way. I have this story that there were some black-spot mould problems in a public housing development. Obviously, there was excess child morbidity and all the rest of it as a result of this black-spot mould. They said, ‘Why do you have this problem? Just turn your extractor fan on when you have a shower. It’s not that difficult.’ ‘Oh, but it’s so noisy. It must be really expensive to run. I don’t want to use that.’ So with the in-home display, you are able to demonstrate how many pence it costs to run that extractor fan. It’s not much. It sounds worse than it is perhaps. So they were able to address that black-spot mould problem. Those are two ways that a smart meter is empowering to people. Yes, absolutely, we can do more, Matt, to sell that. There’s lots more to say about that but low-voltage visibility is absolutely the Holy Grail for smart local energy management. The challenge is... a smart gives you ten-second increments of information to your consumer access device. The postman of all this information is a body called the DCC (Data Communications Company) and they don’t open the envelope any more than the postman reads your mail but they do transfer the data from your smart meter to your energy supplier and then they transfer signals back again. That’s what they do. They’re just the postman. They do that to your supplier twice a day. That’s not very many readings and so you’ve got this issue where you’ve got different actors in this space needing different granularities of data. Someone who is managing a low-voltage network at a very, very high resolution might need it every second, or two seconds, or half a second and we don’t do that.
Rebecca: You’ll correct me if I’m wrong but one of the reasons that the data only goes to the supplier at the frequency you describe – well, probably a couple of reasons is that firstly, the supplier doesn’t need it more frequently than that...
Jeremy: That’s right.
Rebecca: ...but secondly... you can imagine if you’re sending mail, if you’re sending two letters a day, it’s a very different volume of mail than if you’re sending a letter every second. My understanding is that we would run into bandwidth issues if we were trying to transmit the data that frequently at a national scale. Through a smart energy system where we need that high-frequency data and where we need that data maybe every second to manage it... we’ve talked about that in the home and we’ve talked about it on what could be referred to as a national scale because our suppliers are national entities. Is there something in the middle where local meets smart? Is this why smart energy system management has to be local?
Jeremy: Oh, that’s a good question. I’m not sure I know the answer to that. I think so. Smart management needs different resolutions of data, depending on what you want to do. What we’re doing, for the most part in the UK, is we are working towards a system of 48 schedules a day. We already have this in industrial...
Matt: Aka, half-hourly.
Jeremy: Absolutely, yeah. So we already have this in industrial and commercial metering. We have something called Half Hourly Settlement which means every half hour, you settle your books. You pay your debts. You buy in the credit or whatever. You make sure that you’ve settled. Now, other countries have different settlement periods. Mainland Europe does it every 15 minutes, for example, but what we’re doing in the UK is we are now moving towards something called Marketwide Half Hourly Settlement which is we’re extending that Half Hourly Settlement to residential properties as well. So by 2025, across the board, everyone should have access to this and any energy supplier will be able to offer 48 different tariffs a day.
Rebecca: Is this akin to the tariff where you get those different price signals, so you don’t just pay one price for energy or one price during the day and one price at night but it’s changing all the time? Is that the half-hourly that you’re talking about?
Jeremy: Yeah, so I think static time-of-use tariffs have been around for 50 years, haven’t they? Economy 7, was that a 1970s thing? Before my time in this country anyway but a dynamic time-of-use tariff, one that is responsive, yes, absolutely. That’s what we’re talking about here.
Matt: I just want to maybe echo the point I was making before. We were talking about the value of data or energy data at a very, very focused and low-spatial level, i.e. household. That granularity of the data is at the household. Now when I speak to the distribution network operators who, using Becky’s analogy, manage the capillaries of the system or, to use a transport analogy, the A, B and C roads and not the motorways which is the transmission system, they’re increasingly concerned about where electricity will happen the most and the quickest and also to what extent will these homes have microgeneration but also storage? Things get complicated where your electrification becomes your storage and can act like microgeneration. A good example would be vehicle-to-grid where your car can draw power but also discharge back into the grid. They need data. The past is always a good indicator of future performance, so they need this data to be able to plan what the system might look like in 2030 or 2040 because when you start to make those investments, you’ve got to plan years ahead. To the consumers’ eyes, you and I, is there a hidden value to this data and this is really a big part of why we have smart meters in our homes? Is that a fair statement or am I way off?
Jeremy: Yeah, I think absolutely, that’s a fair statement. It’s very difficult to put a value on that. For my sins, when I was with the Department of Energy & Climate Change, one of the last things I worked on before I left the department was the full business case for the smart metering programme. As I recall, we didn’t include a monetary value of the digital transformation or the digital transition in the full business case. We justified that programme on its own terms in the sense that energy suppliers will have to spend this much rolling out meters and other metering equipment and we will see customers saving more than that on their bills. That’s the justification for the programme but obviously, there is a strategic case as well which is smart metering is an absolutely essential and, in my mind, overdue upgrade to the energy system of this country. You’re absolutely right, Matt, and it’s funny because when you were asking that question, I thought you were going to ask me about forecasting, not for 2035 but I thought you were going to ask me about forecasting for tomorrow or next week.
Matt: Well, this winter, that will be very important. The conversations I have with the distribution network operators tend to be that they want to only dig up the road once and not twice or thrice.
Jeremy: Oh, sure.
Matt: The consumer who is paying a network charge to be connected, if they want to electrify their vehicle or electrify their heat, they damn well want to do it and in the context of net zero, they should be allowed to do it. Now, if we don’t have the data to underpin these forecasts... I’m talking medium to long term but your point there about the short term is going to be really critical this winter. I mean I don’t know whether you want to venture into those murky territories but if margins are tight, is a smarter system going to help us from brown and blackouts in the fullness of time?
Jeremy: I don’t think it necessarily does in the terms of whether I can forecast what’s going to happen in three months because you don’t need a smart meter to know that. You can just look at the papers or you know what you did last year. What you’re talking about here with the granularity (I hate that word) or the resolution of data per household, that’s why we need aggregators. Aggregators take that data and they say, ‘I am going to make this availability for a street, or for a neighbourhood, or for a city, or a town, or whatever.’ One of the things that that does is it anonymises it which is great for data protection but the other thing is it puts it into useful parcels that can actually be used by low-voltage or other voltage levels, network managers and operators (your system operator) to be able to make those decisions and then, where we will be shortly, where you begin to able to disrupt the normal use of electricity by pushing people using price signals to use electricity at other times. You clearly want to talk about value and I want to talk about value as well. What it doesn’t do, hopefully, is just move everybody away from charging their car at 6 pm when they get home from work. If you just moved that so everyone said, ‘Right, I’m going to charge it at 2 am,’ what you’ve done is called peak shifting. You have just taken the peak of electricity you use and moved it and if you have a very high peak, no matter whether it’s at 6 pm or 2 am, it doesn’t matter. That’s how much generation you need and that’s bad. So what you want to do is you want to do peak shaving means where electricity is being used less and where there is more excess electricity on the grid or where there’s excess generation, you want to use more. Where there is a peak of electricity use, you want to use less, so you are flattening the hills and raising up the valleys. It’s very biblical, in fact.
[Music flourish]
Rebecca: I want to challenge a couple of things and I want to dig into this a little bit in a bit more depth because this concept of peak shaving or flattening the load profile when you’re looking at an aggregated level makes a lot of sense in a world where we are reliant on generation from things like coal or nuclear which can be typified through this kind of stable generation profile.
Jeremy: Baseload.
Rebecca: Baseload. Some might argue we’ve already moved and we are continuing to move into a world where the sorts of generation that we’re going to see are more wind and more solar. That’s a much peakier and lumpier generation. So unless we are going to be heavily investing in storage, is that still the case that we want to be peak shaving? This is where I think we dive into this question of value. You said something at our EnergyREV Summit back at the beginning of September that really interested me. A lot of the time, we talk about smart local energy systems and the value that they can bring and so I’m going beyond just smart meter data but thinking about the broader changes that we’re seeing on the system. Data is undoubtedly one of them. We often talk about the value of that in being able to manage our networks locally and more effectively and this kind of potential value stream or deferred cost of networks. You said something at the summit that made me take pause which was that you said you didn’t think that that would necessarily be the case. You thought that there would be a huge value in the generation that we didn’t need to build. So as we start to talk about value, and this is a very messy, complex system... in some ways, are these two things competing because when we’ve got a lot of generation, we want to use it which kind of goes against what’s best for a network which is a much flatter load? How do we balance these two things out?
Matt: For clarification for listeners, Becky, in terms of avoided costs, my understanding is not building wind farms, or nuclear, or gas but also on the network, are you talking about reinforcement and avoiding the need to connect in that new generation or to reinforce existing lines to take additional supply or load?
Jeremy: My position is not uncontroversial, so I’m not going to say everybody agrees with me. I’m not saying that there is no value in avoiding grid upgrades or network reinforcements. What I’m saying is that that grid upgrade and that network reinforcement will probably have to happen anyway. If we are going to increase our electricity use between now and 2050 by at least 70%... net zero; using energy more efficiently and using less energy means using more electricity. So our electricity use will go up and that’s because we are electrifying lots of things; two big things in particular. One is heating and the other is road transport. So where we used to use petrol and diesel and where we currently use petrol and diesel, we will soon use electricity and where we used to use natural gas and other forms of heating, we will electrify those as much as possible and because of that, electricity use will go up and there will be the need for more infrastructure. We can’t avoid that in total. We can delay it and by having a more flexible energy system, we do see a benefit. However, the real cost savings from what I’m just going to call flexibility... by having a responsive, flexible grid that can shave the peaks so that peak generation is lower and so you can shift load to meet generation requirements, having that will absolutely save us money, especially as there’ll be wind farms we don’t have to build. There will be a nuclear reactor we don’t have to build. There will be coal mines we can close earlier. Matt, just before you come in, can I, maybe just for your listeners, just be very, very clear about what I’m talking about when we’re talking about flexible responsive energy systems? At the moment, the way things work is it’s already quite a flexible system. We have incredibly clever people, who have forgotten more about this stuff than I will ever know, who are very, very good at looking into the near future and determining what the demand will be. So what we have at the moment are grid managers who amend, alter or change the generation of electricity in order to meet forecasted demand. That’s what they do. They say, ‘Okay, I know it’s going to be cold tomorrow, so I’m going to make sure there’s more of that on the system.’ The electricity system of the future is exactly the opposite. Instead of changing generation to meet forecasted demand, we are going to change demand to meet the generation we have and that is so exciting.
Matt: That’s a really good way of summarising it. Listen, Jeremy, we’re very nearly out of time, so I just wanted to end I think on... I know we could talk forever on this [laughter]. We may have to get you back.
Jeremy: And we will [laughter].
Matt: Talking about obstacles, you flagged the critical importance of smart but what’s going to stop us from getting there? What big barriers and obstacles do we need to lift and bulldoze to ensure that we are living in a smarter energy system?
Jeremy: If I list the obstacles, then I’m going to start listing solutions and I don’t have them but can I tell you three things that if we don’t have enough of them, we won’t succeed? That’s data, support and integration. So if we lack data and we don’t have the right amount of data and the right quality of data in the right places for the right people, then it becomes very, very difficult to develop a business case for demand-side management or demand-side response because there’s no money for it. You just can’t do it. You don’t have the data and you don’t have the business case. You can’t take a product to market. The second thing is if there is a lack of support and this could be in terms of a significant technological upgrade but the value of flexibility is clear, so we do just have to get on and do it but we need more support. No one would ever accuse the United Kingdom of being underregulated. However, we do need to make sure that there is targeted policy support for innovation in this space and I would say that because I’m a business lobbyist but there you go. The last thing that will stop us is a lack of integration. There are two kinds of integration here. I’m talking about the fact that we need integration between the devices, the systems, the business models, the energy suppliers, the demand-side response service providers and all these wonderful people who are aggregating the data and providing solutions. They need to be integrated with the devices but similarly, what stops us is if there is a lack of integration into our daily lives because any programme for net zero that relies on goodwill will fail. We have to make this attractive to consumers and we have to make it nearly invisible but we have to make it easy to understand, easy to use and easy to live with.
[Music flourish]
Rebecca: Thank you so much, Jeremy. Great discussions, as always [laughter] and as Matt said, we’re going to have to get you back on because I feel like we’ve got a lot more to say and a lot more to talk about but, yeah, I really enjoyed today so thank you for coming along.
Jeremy: Always a pleasure.
Rebecca: To everyone else, you’ve been listening to Local Zero. Thank you for joining us. If you haven’t already, do go find and follow us @LocalZeroPod on Twitter to get involved with the discussions there and feel free to email us at LocalZeroPod@gmail.com. We love hearing from you all and if you can, just take a couple of minutes to please leave us a review in Apple Podcasts, on Spotify, or wherever else you get your podcasts. This really helps us to spread the word about Local Zero and reach new listeners but until next time, thank you again and goodbye.
Matt: Thanks, goodbye.
[Music flourish]
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