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Assessing Smart Electricity Meter Impact in Ireland

Explore the likely impact of smart electricity meters in Ireland, comparing scenarios and analyzing effects on networks, suppliers, consumers, generation. The study delves into key parameters such as tariffs, costs, and emissions reductions to estimate societal payoff. Consumer behavior trials and sensitivity tests are conducted to assess viability and benefits. The potential for emissions reductions, unquantified benefits from smart grids, and future research implications are also discussed.

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Assessing Smart Electricity Meter Impact in Ireland

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  1. The Likely Impact of Smart Electricity Meters in Ireland Seán Lyons (with Conor Devitt & Anne Nolan) ESRI/EPA Environmental Economics Seminar, 30 May 2011

  2. Contents • Introduction and approach • Counterfactual and scenarios • Some key parameters • Effects on:- • Networks • Suppliers • Consumers • Generation • Future research

  3. Introduction • Smart metering: meters read remotely with high frequency data collection, allowing time of use tariffs • ESRI assisted CER in preparing CBA, work funded by Energy Policy Research Centre • Objective of CBA is to estimate the payoff to society of various scenarios, compared to “no action” baseline • Include effects on consumers, networks, suppliers, generation • Key data from technical trial, consumer behaviour trial and estimates from firms and consultants

  4. Approach to CBA • CBA compares all benefits and costs in a given option to those expected in baseline scenario • Counterfactual baseline scenario: what would happen if no Smart Metering? • Assumptions on service characteristics, costs, prices and demand in the future • Calculate Net Present Value of each option relative to baseline; consider unquantifiables too • Memo items: effects of each option on quantity of CO2 and SO2 emissions

  5. Counterfactual • Existing metering technology retained • No new time of use tariffs • Meter replacement programme goes ahead • New solution for prepaid metering; large rise in households on prepayment tariffs • Bi-monthly billing continues • Variant: Monthly billing from 2020 including monthly manual meter reads and bills

  6. Scenario Dimensions • Communications technology (3 options) • DLC-RF • DLC-GPRS • GPRS-only • Billing frequency (bi-monthly or monthly) • In-home display or not • Monthly billing in baseline or not (from 2020)

  7. Some Parameters and Assumptions • Timing: rollout 2014-2017; evaluation to 2032 • Discount rate: 4% (Dept of Fin. Guidelines) • Macroeconomic outlook, incl. growth in connections: ESRI Low Growth Scenario 2010 • 100% rollout and mandatory ToU charging • Emission intensities (CO2 and SO2) • Customers on Nightsaver tariffs assumed not to respond, along with 15% assumed vacant properties/holiday homes

  8. Consumer behaviour trial • Over 5,000 residential customers included in randomised controlled trial; about 600 SMEs in a separate trial • 6+ month control period applied for all, then one year treatment period for most (remainder left as controls) • Treated residents faced one of four time of use tariffs plus an informational treatment: 1) bimonthly billing, 2) #1 plus in-home display, 3) monthly billing or 4) Overall load reduction incentive • Results • Half-hourly demand data • Pre-trial, post-trial and leavers socioeconomic surveys

  9. Effects on Consumers • Benefits due to net reduction in average bills as customers cut 24 hour usage and switch to cheaper times of day • Significant treatment effects, but no additional price effects found in statistical analysis of residential results • No significant effects found for SMEs

  10. Total NPV by Option

  11. NPV breakdown by component

  12. Sensitivity tests • Effects of informational stimuli were sensitive to tariff group in the trial • Attractiveness of GPRS communications depends heavily upon assumed network charges • Supplier billing system expenditure and network costs such as cost of meters and IHDs are relatively significant • Other cost items less important • Viability not very sensitive to discount rate • Inclusion or not of SMEs makes little difference to NPV

  13. Emissions reductions andnon-quantified benefits • Emissions reductions relative to baseline once meters are fully in place: • CO2: 80,000-100,000 tonnes per year (included in NPVs) • SO2: 110-140 tonnes per year (not included in NPVs) • Unquantified benefits from smart grids, microgeneration, electric vehicles, gas/water smart metering, electric vehicles, smart appliances, extra scope for service differentiation and competition

  14. Details of NPVs (€m) by Option

  15. Sensitivity test: discount rate

  16. Sensitivity test: tariffs from trial

  17. Future research • Dataset should be made available to researchers, e.g. through ISSDA • Consumer electricity demand parameters • Effect of appliance ownership and use on electricity demand • Segmentation of electricity user types by patterns of use • Rich data set, so probably many other applications...

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