Meters may not be so smart for environment

Age
Thursday 13/3/2008 Page: 6

VICTORIA'S plan to roll out "smart" electricity meters to 2.4 million homes and small businesses across the state could inadvertently trigger an increase in greenhouse gas emissions, a report has found. A major study commissioned by state and federal energy ministers also raises doubts about the claimed economic benefits of the scheme, with the roll-out expected to cost as much as $5.5 billion nationally by the time it is completed in 2016, for very little gain.

The meters will provide consumers with regular updates on how much power they are using, how much it is costing and greenhouse gas emissions generated. They will allow retailers to boost prices during periods of high demand, encouraging people to run energy-hungry appliances such as dishwashers and washing machines offpeak. The scheme will help smooth consumption across the day, making it easy to manage energy demand, but there could be some unwanted side-effects.

Energy Minister Peter Bachelor conceded that the meters could theoretically trigger an increase in emissions by encouraging consumers to shift their energy use from peak periods to offpeak periods - when power tends to be generated using greenhouse gas intensive brown coal, rather than hydro, gas and wind power, typically used to produce peak power. But he said this was unlikely, predicting the new meters' sophisticated in-house display units would also encourage consumers to cut their overall consumption, thereby lowering emissions.

The report, by NERA Economic Consulting, found that Victoria's greenhouse gas emissions would be about 95,000 tonnes higher if the meters succeeded only in convincing consumers to change the timing of their energy use, rather than cutting it. But the report estimates that emissions would be about 3.8 million tonnes lower if the meters successfully triggered a large drop in total power use.

The amount of energy saved as a result of the smart meters has also raised questions about whether the costs outweigh the benefits. The Brumby Government has refused to say publicly how much it expects the Victorian component to be, but The Age believes it has factored in a price as high as $1.4 billion.

The NERA report estimates that Victoria will shave off only 0.03% of its energy consumption once that money is spent. The other states will also experience only marginal reductions in consumption following the roll-out, it forecasts. A spokesman for Mr Batchelor, Dan Ward, defended the cost, saying the consultants had been conservative and had "taken the high-end costs against the low-end benefits." In Victoria smart meters will deliver net benefits," he said. In terms of replacing analog meters, this absolutely stacks up for us."