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6 - Smart metering: technology, economics and international experience
- from Part II - Technology
- Edited by Tooraj Jamasb, Heriot-Watt University, Edinburgh, Michael G. Pollitt, University of Cambridge
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- The Future of Electricity Demand
- Published online:
- 05 March 2014
- Print publication:
- 15 September 2011, pp 161-184
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Summary
Introduction
As we have seen particularly from Part I of this volume, the participation of the demand side is essential in improving the overall efficiency of energy markets. In liberalized electricity markets, active demand-side participation has been limited to date, although there is increasing emphasis on its importance in contributing to a number of energy policy challenges (Bilton et al., 2008; Borenstein et al., 2002; Spees and Lave, 2007). Climate change, security of supply and fuel poverty are the three main areas where a more active demand side has the potential to have both significant and cost-effective impacts (Ofgem, 2006b). The widespread recent interest in smart electricity and gas metering can best be understood in this context. Innovative forms of metering allow for more detailed information to be collected on consumption. Communications technology facilitates greater interaction between the end-user and the rest of the supply chain. Both information and interaction allow for end-users to become more actively involved by, for example, responding to price signals.
Smaller users (domestic, small and medium-sized enterprises (SMEs)) have been the focus of recent smart metering policy debate around the world as they have traditionally not been given the appropriate incentives, means or information to become active participants in energy markets. In the European Union (EU), the 2006 Energy Services Directive (2006/32/EC) has given impetus to the debate by requiring member states to incorporate metering and billing policies into their National Energy Efficiency Action Plans. This has prompted a number of EU countries to explore the costs and benefits of implementing smart metering as well as the appropriate models and regulatory frameworks for deployment. The recent interest in smart grids in both the EU and the US provides a broader framework for looking at some of these issues. Although the definition of a smart grid is a work in progress, the overall aim of developing smart grids is to modernize the electricity system in such a way that it will be able to deal with increased complexity in an efficient and reliable manner. Part of this complexity comes from a more active demand side. Other important factors include the integration of greater amounts of renewable generation, distributed generation and the use of more advanced network control technologies to reduce losses (ERGEG, 2009).
14 - Demand-side management strategies and the residential sector: lessons from the international experience
- from Part IV - Policy and regulation
- Edited by Tooraj Jamasb, Heriot-Watt University, Edinburgh, Michael G. Pollitt, University of Cambridge
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- Book:
- The Future of Electricity Demand
- Published online:
- 05 March 2014
- Print publication:
- 15 September 2011, pp 337-378
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Summary
Introduction
Policies and measures targeting energy demand took off over the last three decades in response to the oil shocks of the 1970s. Since then, concerns about the sensitivity of economies to energy prices, oil dependency and more recently climate change, contributed to the development of energy efficiency (EE) policies. Demand-related policies that aim to influence quantities or patterns of energy use have traditionally been referred to as demand-side management (DSM) programmes. They include both energy efficiency policies and demand response (DR). Energy efficiency improvements can bring many benefits in terms of reduced energy infrastructure investments, decrease in electricity prices, increased energy security, improved environmental quality and other ancillary benefits. Scientists estimate that by 2050, we will need to have reduced our greenhouse gas emissions (GHG) by 50 per cent to avoid the worst-case scenarios of climate change. In such a context, the building sector appears as the ‘cornerstone of every national climate change strategy’, as it is responsible for up to 30 per cent of global annual GHG emissions, and 40 per cent of all energy consumption (UNEP, 2009). Furthermore, there is widespread evidence of the cost-effectiveness of energy efficiency measures as compared to renewable programmes (IEA, 2006). In parallel, load growth; increased intermittency due to renewable generation; and, in the UK in particular, the renewal and reconfiguration of the electricity network pose challenges to the electricity sector never seen before. These challenges increasingly lead to the recognition of the importance of active consumer participation in load shifting, and hence interest in influencing quantities or patterns of energy demand.
There is now substantial experience particularly among OECD countries in using policy instruments to improve the overall efficiency with which energy is used. Several recent studies have assessed these experiences. For example, Geller et al. (2006) review energy intensity trends in the OECD from 1973 to 2003. They focus on the specific policies adopted by Japan, the US and a selection of European countries to improve energy use per unit of GDP across sectors. The World Energy Council (WEC) has conducted a review of energy efficiency policies using a survey of seventy countries, including examples of the most effective types of policy measures (WEC, 2008). Similarly, the United National Environment Programme Sustainable Buildings & Climate Initiative (UNEP-SBCI) published several reports assessing the implemented policies in various countries. A number of International Energy Agency (IEA) publications have also looked at energy use trends (IEA, 2007; IEA, 2008); reviewed the implementation of energy efficiencies policies in general (IEA, 2009b); and in the residential sector in particular (IEA, 2008).
9 - From citizen to consumer: energy policy and public attitudes in the UK
- from Part III - Social dimensions
- Edited by Tooraj Jamasb, Heriot-Watt University, Edinburgh, Michael G. Pollitt, University of Cambridge
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- Book:
- The Future of Electricity Demand
- Published online:
- 05 March 2014
- Print publication:
- 15 September 2011, pp 231-248
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Summary
Introduction
Interest in the role of the individual and the community in tackling major energy policy challenges has increased significantly over the past decade in the UK and internationally. The main challenges addressed by UK energy policy are climate change and the transition to a low-carbon economy; diversity and security of energy supply; and supporting consumers by overcoming fuel poverty and improving energy efficiency. Long-term continuity of policies concerning the above areas as well as that of liberalization of the energy sector is largely dependent on support from the public. The Department of Energy and Climate Change (DECC) was created in October 2008, mainly in recognition of the fact that these challenges are interlinked and require comprehensive policy making. Each of these challenges also involves an important role for the demand side. For households this includes a role for individuals as consumers of energy as a commodity on the one hand, and as citizens with social and political responsibilities on the other (Devine-Wright, 2007).
The role for consumers in an advanced liberalized energy market such as Great Britain is further augmented due to retail competition: consumers can choose supplier and switch to an alternative supplier if they are dissatisfied with price, quality or customer service. They may also be more exposed to changes in energy prices. As citizens, individuals may participate both privately and collectively in policy-making processes. The degree of participation depends in large part on the willingness of policy makers to engage with the public. Until now, public engagement in UK energy policy making has been based on the information deficit model or the rational choice model. The assumption at the heart of these models is that improving awareness and understanding through providing information is central to encouraging sustainable behaviour and public acceptance for sustainable solutions, e.g. the siting of new wind-turbine developments (Owens, 2000; Owens and Driffill, 2008). This is beginning to change, however, and a number of recent studies have attempted to integrate a more sophisticated approach, acknowledging that the link between attitudes and behaviour is complex and influenced by a range of social, political, institutional and cultural factors (Jackson, 2005; Defra, 2008).