British households are facing a bleak winter in 2023, with Ofgem warning in May that the retail price cap will climb up to £2,800 in October.
The doubling of energy prices in the last 18 months presents a perfect storm for households because the UK has the oldest, least energy efficient housing stock in Europe, with nearly 40% of homes built before 1946.
With Europe attempting to rapidly wean itself off Russian energy supplies and the war in Ukraine continuing, most predictions are for energy bills to remain high for years to come. According to the charity, National Energy Action, this will exact a heavy toll on consumers with an increase in the number of people in fuel poverty from 4.5 million to 6.5 million, even before the price rise expected in October kicks in.
The government has signalled that it is looking at reducing the burden of higher energy bills this winter, but as an industry, we too have a responsibility.
We have an opportunity to deliver a revolution in how we use energy in the home by unlocking the power of energy data. Britain’s smart meter roll-out has already equipped half of all homes with some of the world’s most sophisticated meters.
These are producing vital data on energy use in the home. But the majority of that data simply isn’t being put to work for the benefit of householders; and it represents a huge, missed opportunity.
This is why during the lockdown we looked at how we could make smart meter data work harder for consumers. Based on our experience in making smart energy displays, we developed a much more capable Home Energy Management System (HEMS) that capitalises on this data to drive bill and carbon savings for consumers.
HEMS tap into this largely unused data to understand when the home can use energy more efficiently. It then automates many of the changes needed to drive down bills, taking the hassle out of using energy efficiently. This last point is pivotal because we recognise that all of this is only really possible if the pain of change is minimised for the householder.
Heating offers the most immediate savings, as a smart thermostat allows both gas and oil boilers to run more efficiently, saving 10-12% on heating bills just by using less fuel. HEMS can also automate more savings, for example, by turning down heating when the house is empty, saving a further 5% on the average heating bill. But most smart thermostats don’t make use of smart meter data to do this work as accurately and cost effectively as possible. And most are way too complex for the average household to retrofit. The latest generation of HEMS change the game!
In addition to heating, HEMS can help homes to run white goods on off peak electricity, saving 3-4% a year for homes using a multi-rate tariff. These systems also give you complete visibility of where you are using your energy. So they can easily show you how much you are spending on different uses such as lighting and cooking and can help identify where you might be wasting energy, like leaving appliances on standby.
According to the Energy Savings Trust, just switching off standby devices could save you around £55 a year – about 3% of the average UK energy bill. In total, a good HEMS can save almost 20% on energy bills and at the same time, reduce household emissions by 20%.
Equipping Britain’s consumers with these new management systems will make a big difference to both bills and carbon emissions. At current prices this would reduce bills by £400 and cut carbon emissions by 20%. By reducing gas consumption, they would also play an important part in increasing energy security.
These are the immediate benefits, but there is the potential for HEMS to help deliver the more flexible energy system of the future. HEMS future proof homes, allowing for the easy adoption of EVs and the ability to charge them off peak (again, for customers on a multi rate tariff), saving several hundred pounds per year off motoring costs (reducing the cost of charging by up to 73% or circa £700 per annum based on 10,000 miles per year and vehicle efficiency of 3 miles per kWh).
By understanding how energy is consumed in the home and how efficiently that energy is used for heating, HEMS also make it easy to understand when homes are ready to adopt heat pumps. And they can clearly show the household how much money and carbon will be saved when they move.
And critically, HEMS enable homes to deliver demand side response (DSR) without affecting the lives of the people living in them. This is important as, without DSR or massive investment in grid reinforcement, the local grid is likely to become overloaded if just 10-20% of existing households were to install heat pumps.
By selling the DSR flexibility their home can create, households will be able to benefit from helping to defer expensive upgrades to the grid whilst also playing a key in helping the UK to create a more flexible, renewables-based energy system.
A few years ago, a HEMS with this sort of capability would have been too complex and too expensive to allow mass market deployment. The good news is that HEMS can now be deployed by energy suppliers for a similar cost to, and in place of, the in-home energy displays that are installed in every home as part of the GB smart meter roll-out.
Such is the potential of these systems to make a concrete difference to consumers’ lives that we are convening a coalition of like-minded organisations to engage with the government and identify the most effective pathways to roll-out HEMS and demand-side technology at scale.
Given the misery fuel bills are causing for millions of households, there is an urgent and pressing need to make the data we have from the smart meter programme really work for consumers.
