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40,000 households in Nationwide energy saving experiment

DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (Reference P/2007/012) issued by The Government News Network on 12 July 2007

Around 40,000 households will be taking part in energy saving trials in a bid to cut household bills and help in the fight against climate change, Business and Enterprise Secretary John Hutton announced today.

Contracts have been signed with EDF Energy, E.ON UK, Scottish and Southern Energy, and Scottish Power to conduct the trials; and are funded by £10m from Government matched by a similar amount from the companies involved.

The trials will include around 15,000 households receiving state of the art smart meters and 8,000 more receiving clip on real time display units for their existing meters. The other households in the trial will be testing new ways of receiving information to help them cut their energy use.

Clip on real time display units can tell people how much energy they are using, and how much it is costing when individual appliances are turned on. Smart meters allow energy suppliers to communicate directly with their customers, removing the need for meter-readings and ensuring entirely accurate bills with no estimates. Smart meters tell people about their energy use either through linked display units or in other ways, such as through the internet or the television.

Business and Enterprise Secretary John Hutton said:

"Changing consumer habits is vital if we are to cut our energy use and reduce the impact of climate change. Smart meters provide the cutting edge technology to enable this to happen. The results of the trials will provide invaluable evidence to support the future rollout of displays and smart meters; helping to cut consumer bills and cut our carbon emissions."

Ofgem Chief Executive, Alistair Buchanan, said:

"Smart meters have great potential to help customers better understand their energy consumption and encourage energy efficiency. Ofgem's initial work suggests that smart meters are the future - the end of the meter reader, the ability to meter homemade electricity sales back onto the grid and vastly improved consumption data available within your home. These trials, which will be administered by Ofgem over the next two years, will provide us with firm evidence and hard facts about the benefits smart meters can bring."

The trials will test out consumers' response to better information on their energy use through a variety of methods, including:

* Consumers to be able to access information about their consumption and energy costs through visual display units that can be displayed round the house, over the internet and even through digital TV;

* The potential for energy suppliers to provide enhanced billing information with advice to consumers on how they can cut down their energy bills; and,

* Providing a breakdown of energy use to the customer and exploring a range of tariffs for consumption at different times of the day.

The trials will be conducted throughout the country and will look at the responses from a range of customers, including those in fuel poverty.

The trials will also look at:

* Increasing the frequency of billing as well as the impact of more accurate bills; and

* Encouragement to become even more energy efficient through more information and community engagement.

Smart meters are expected to be rolled out to most households within the next ten years, and all but the smallest businesses in the next five years.

In the meantime, Government has proposed that real time display units be provided with any new meters fitted from 2008, and to all households that request them between 2008-2010. It is estimated that these short-term measures will deliver savings of 300,000 tones of carbon per year by 2020. Government will be consulting further on the implementation of these proposals.

Notes to editors:

1. Ofgem are managing the project on behalf of the Department for Business. The trials will be carried out throughout the UK and will last two years with results being available on a six-monthly basis.

2. The four energy companies taking part in the trials are EDF Energy, E.ON UK, Scottish and Southern Energy and Scottish Power. There are also six different metering/feedback device companies, four IT specialist companies, two charities and three universities involved.

3. Each participating company is carrying out a range of trials to test out consumer response to different interventions including a combination of some or all of the following: improved billing (with and without smart meters), energy efficiency information, community engagement, clip-on visual display units and smart meters.

4. The project will focus on the domestic sector, involving around 40,000 separate households of which approximately 15,000 households will have smart meters installed as well as 8,000 clip-on visual displays. The households are geographically dispersed across Great Britain.

5. The Energy White Paper, published on the 23 May 2007 stated that subject to the results of these trials we intend to work with energy companies to roll smart meters to households over the next 10 years. In the meantime, real time displays are intended to be provided with any new meters fitted from 2008. Because it will take a number of years before a new meter and display can be rolled out to every household, we proposed that between 2008-2010, real time displays, will be available free of charge to any household that requests one. These proposals will shortly be consulted upon.

6. The White Paper also stated that we will consult on a requirement for energy suppliers to extend, to all business users in Great Britain, advanced and smart metering services, within the next five years. This will not apply to the smallest business users, nor to larger businesses with half hourly meters.

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