Smart meters - friend or foe?

The smart meter is back in the spotlight again, with the recent announcement that the Gillard government will support time-based energy pricing initiatives as outlined in the widely publicised 2012 Energy White Paper.

Smart metering comes with a swag of promises: a fairer pricing structure through real-time (30-minute interval) consumption reporting, remote reading and communication, better administration of power quality, greater network efficiency and consumer self-managed utilisation through provision of usage data via the internet, smartphone apps or indoor displays.

In Australia, only Victoria has implemented mandatory smart metering and it hasn’t exactly been smooth sailing. The Advanced Metering Infrastructure (AMI) project was approved in 2006 and scheduled for rollout between 2009 and 2013. Three years in and the scheme has received its fair share of flak. A recent article in The Sydney Morning Herald even referred to the exercise as “the biggest single public policy failure in the energy sector of the past decade”. Quite an assertion. With the federal government backing the scheme, it’s not implausible that compulsory nationwide participation will be introduced at some future point, but probably not without a careful review of the Victorian undertaking. On the whole, the smart metering debate has become a bit of a political hot potato.

Backlash in Victoria has been fierce, with a number of consumer awareness and support groups emerging to lobby the government. They are calling for the immediate cessation of smart meter installations and to turn off communication with existing meters. In cases where they believe that rights of householders have been infringed, these groups advocate removal of smart meters entirely.

The concerns are many and varied, with costs, privacy, and health and safety being the key issues.

Time-of-use pricing looks good on paper; consumers pay for what they use. However, according to consumer group Stop Smart Meters Australia, adoption of this practice gives power distributors the ability to manipulate customer demand by enforcing higher prices when they want to reduce load. The group suggests that this will lead to less infrastructure requirement on the part of the distributor, as they simply won’t have to cater to high-demand situations.

Similarly, critics point out that the price of meter replacement has been passed on to the consumer. This is interesting, given that ownership of the device does lie with the distributor.

The overall cost of the program has blown out significantly according to the Victorian Auditor-General’s performance report (released November 2009) which estimated an end cost of around $2.25 billion, significantly more than the projected $800 million to $1.56 billion.

The Auditor-General concluded that the scheme was ill-advised, under-resourced and over-optimistic in the case of financial projections. It noted that there were significant flaws in the technology trials process and no risk management strategy in place, further jeopardising success of the scheme, as increasing costs and delayed deliveries rose out of technology risks uncovered during the project rollout.

Aside from the economic concerns, privacy issues are on the radar. According to a report released by the University of South Carolina, smart meters aren’t all they’re cracked up to be. Smart? Perhaps. Secure? Not so much. In the United States, nearly 50 million utility meters are measured using wireless automatic meter reading (AMR) carried out by trucks that drive through neighbourhoods gathering data remotely. The USC College of Engineering and Computing conducted a study to determine the security levels of these meters citing that “much of the focus in the research security community right now is on the next generation of devices, the so-called ‘smart meters’”.

AMR systems use proprietary devices and communications protocols, which the research team reverse-engineered in order to gain access to usage data. Using a researcher’s home as the base for the experiment, employing a laptop and antenna, they found that they could obtain electricity usage data from every residence in the building - over 400 apartments in all. In fact, they obtained data on a total of 485 homes, meaning that gathering capability extended beyond the building itself. The study also revealed that the detailed data provided gave insights into household activities, such as when residents rose, went to work, arrived home and retired for the evening. The team was purportedly able to determine that 27 of the apartments were unoccupied at the time of the study.

There is obviously an element of difficulty in obtaining the usage records using this method, which the researchers readily admit, but the study shows how holes in the system can be penetrated if the desire is there.

In Australia, privacy concerns around (encrypted) radiofrequency transmission vulnerabilities have been raised, as has the potential practice of onselling customer usage data for research purposes. Both have consumer groups in uproar.

While cost and privacy implications are definitely hot button issues, nothing is using up more bandwidth than forum discussions around the potentially adverse effects on health that may arise from smart meter use. Apprehension is building around the long term effects of exposure to electromagnetic fields (EMFs), particularly in the elderly and children. This list of concerns is long, too long to list here. Suffice it to say that quotes and statistics abound and many websites now feature the personal stories of individuals sporting symptoms ranging from headaches to heart palpitations, post-smart meter installation.

On the other side of the coin, you don’t have to search too hard to find the naysayers. There are plenty of sites keen to discredit so-called smart meter ‘conspiracy theorists’, particularly in the United States, where the market is larger and more mature. Some go so far as to label these claims as akin to belief in astrology and alien abduction and to suggest, rather unkindly, proponents of this thinking are “less educated”.

Regardless of which side of the fence you sit on, you’ll have to go a long way to find a less elegant introduction of, well, anything really. It’s likely that the Victorian AMI scheme will only be used as a benchmark for ‘how not to do it’. Perhaps it was the ‘mandatory’ element. Consumers don’t like a lack of choice; it’s the cornerstone of a free economy after all.

Whether these outlined predictions of security leaks and increased illness prove to be true, only time will tell. Concerns aside, smart meters are big business, particularly in the United Kingdom and Europe, where new targets are particularly ambitious. The UK is expected to have 40 million dual (gas and electricity) meters installed by 2016 and there is a mandate for smart meter installation in 80% of European households by 2020. The US market has pretty much reached saturation and plans for the likes of hyper-populated China and India have not yet been established as yet. So, on the bright side, if the doomsday predictions are true and smart meters prove to bring about the end of life as we know it, at least we’ll all go down together.

Nevertheless, if the federal government is behind it (although it’s been suggested this is merely a way to mitigate negative opinion on the carbon tax), then you can be sure there will be some sort of incentive for state participation before too long. Let’s just hope they remember Victoria when putting the plans into action.