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Energy: Meters

Volume 712: debated on Monday 5 October 2009


Asked By

To ask Her Majesty's Government, further to the statement by Lord Hunt of Kings Heath on 15 July, what are smart grids; how those benefit the consumer; how smart meters will function; whether consumer prices will rise by six per cent or eight per cent per annum for electricity, gas and oil, or by eight per cent in real terms between now and 2020; what world prices for oil and gas lie behind those forecasts; how many wave and tidal power experimental test projects they expect there will be; and over what period. [HL5166]

A smart grid is an electricity network that can intelligently integrate the actions of all users connected to it in order to maximise efficiency in delivery of sustainable, economic and secure electricity supplies. The potential benefits of a smart grid are set out in more detail in the UK Low Carbon Transition Plan laid before the House on 13 July. The use of smart meters gives consumers better information and control on energy usage, helping people to manage their energy demand and bills. The rollout of smart meters will be an important step towards development of a smart grid.

The Department of Energy and Climate Change (DECC) published a consultation document on 11 May covering a range of issues to be addressed in deciding how smart meters should be rolled out, including the minimum functionality which should be required of smart meters and possible delivery models.

The Government estimate that the additional impact in 2020 of policies in the UK Low Carbon Transition Plan1 (p.96), relative to today, is £76, which is equivalent to approximately a 6 per cent increase to current average household energy bills.

The transition plan estimates that the additional impact in 2020 of all climate change policies, relative to today, is £92 which is equivalent to approximately 8 per cent of current average household energy bills.

Bill impacts are dealt with in more detail in the analytical annexe to the transition plan (http:// uk/en/content/cms/publications/lc_trans_plan/lc_trans plan.aspx).

These estimates of the effects on bills are in 2009 prices, therefore all the increases are in real terms.

DECC publishes crude oil, wholesale gas and coal price assumptions for the period till 2030, which are used in the department's analytical work, where relevant. The updated set of future wholesale price assumptions published in May 2009 can be found at http://www.berr.

The bill effect figures are based on the scenario 2 oil price assumptions, namely $80/barrel of oil in 2020.

The UK Low Carbon Transition Plan and UK Low Carbon Industrial Strategy2 (published in parallel) outline a commitment to invest up to £60 million in UK marine energy infrastructure and technology demonstration. We expect that a variety of devices will be tested using the new infrastructure, and that a number of companies will benefit from the proving fund.