London, England --- (METERING.COM) --- July 4, 2013 - Work needs to be done in both the regulatory and policy spheres to ensure that British consumers will receive their fair share of the savings that are made from moving to smart grids, and that they are protected from potential sources of detriment, the consumer organization Consumer Futures says in a new position paper.
With potential savings estimated at between £2 billion and £4 billion over the cost of conventional upgrades to 2050, these should be to the benefit of domestic consumers.
In addition, the considerable challenge of engaging domestic consumers in the future electricity market, and the difficulty many may have with shifting sufficient proportions of their energy use to achieve an effective level of demand side response, may not be receiving sufficient focus in policy discussion and modeling. In particular is the concern that the various estimates of the value of demand side response suggest the financial benefits to individual consumers may not be sufficient to encourage uptake. Further, the market arrangements could make it especially difficult for those in vulnerable positions to benefit fully from the relative savings enabled by the smart grid.
Consumer Futures also has yet to understand fully how the government will ensure that cybersecurity will run throughout the smart grid infrastructure, and waits to see how privacy safeguards around smart metering will work in practice.
“Smart electricity grids are not guaranteed to bring major benefits to consumers,” commented Adam Scorer, director of Policy and External Affairs at Consumer Futures. “Focused regulatory and policy arrangements will be necessary to ensure costs are controlled and recovered fairly, that a new generation of complex time of use tariffs do not confuse and mislead, and that consumers are fully engaged.”
Among the recommendations Consumer Futures suggests that in order to ensure that consumer issues are dealt with effectively, the DECC/Ofgem Smart Grid Forum should open a work stream exclusively focused on considering the smart grid from a consumer perspective.
The paper, Smart grids: Future-proofed for consumers?, is intended to present an initial perspective on the opportunities and challenges to make smart electricity grids work for consumers in Britain.