Switching Up the Smart System: Unlocking Billions in Benefits for the UK

The UK’s smart meter system is an under-utilised tool that has the potential to serve the nation in new and important ways, according to latest research from LCP Delta, the expert energy consulting firm.

Calisen commissioned the report ‘Switching up the smart system: How the smart system can transform energy resilience’, to investigate how smart meters could better support the UK and look at the benefits of full rollout.

The latest Department for Energy Security & Net Zero (DESNZ) figures show that 72% of UK homes have smart meters (electricity and gas). The LCP Delta report identifies operational and system interventions with a range of potential benefits from base case to best case – its uppermost at a £1.9bn annual saving, with an additional lifetime saving of £250m from better identification of vulnerable customers.

Access and download the full report here: Switching up the smart system: How smart meters can transform energy resilience 

Key Findings from the Report

Dynamically Balancing Supply and Demand

Smart meters can better match supply with demand – this presents huge value when renewables such as wind are abundant and reduces overall constraint costs (around £1.8bn for 2025 according to NESO).

They also enable consumer-led flexibility by providing near-real-time data, giving people the opportunity to shift their power use. Smart meters enable services such as the Windy Day Fund, Power Up or Turn Up, which seek to distribute excess energy to customers, and the Demand Flexibility Service (DFS), which can reward households for reducing demand – a potential value of £560m in lower customer bills annually.

Improving Voltage Control

Smart meter-enabled voltage control improves energy efficiency and grid resilience by providing visibility of voltage levels beyond substations.

Trials show smart meter data can help identify and even predict voltage issues. Separate trials have shown smart meters can also be used to adjust voltage across a distribution network – a potential value of over £900m in lower customer bills annually.

Operational Savings from Full Smart Meter Rollout

According to DESNZ, smart meters met their business case savings in 2019 by reducing costs to industry, such as site visits, customer calls, and debt handling.

With domestic supply profits in the low single digits and capital adequacy concerns, reducing metering costs helps energy companies invest in product innovation and better customer service – a full smart meter rollout could deliver £420m in industry savings per year.

Supporting Vulnerable Customers

Recent pilots by distribution network operators (DNOs) have demonstrated smart meters’ ability to help identify vulnerable customers through consumption data patterns.

Better identification of vulnerable customers has a broad range of benefits, including better health from warmer homes in winter and more efficient support for customers on the Priority Services Register. There are also reduced costs in serving customers during power cuts and emergency situations – potential savings across the current system of £250m.

Why Full Smart Meter Adoption Matters

Realising the fuller benefits of the smart system also underlines why the Government’s bold target to reach 100% uptake is such an important commitment.

More meters working more of the time is also critical – latest DESNZ figures show over 7% of smart meters are non-communicating. However, advances in data and analytics mean the industry can more effectively address non-communicating meters, ensuring the system is fully functioning and providing consumers and the grid with better visibility to make the most of precious resources.

Industry Perspectives

Commenting on the research, Catherine O’Kelly, CEO of Calisen, said:

“Smart meters are now part of everyday life for the majority of people in the UK. Cheaper flexible tariffs and the transition to low-carbon technologies like solar, batteries and EVs are driving increasing uptake as consumers see more tangible benefits to this clever bit of kit.

“The first stage of the smart meter rollout brought convenience and savings to consumers and industry alike. A maturing smart meter system opens up even more possibilities that could save Britain billions and bolster our grid as we move to cleaner power sources. The research paints a picture of an important piece of national infrastructure, connecting near-real-time data and flexible demand side management for the benefit of us all. Importantly, we know from the 4 million home visits a year the Calisen field force makes, smart meters present an opportunity to improve the lives of vulnerable customers – ensuring better identification of those in need and opening up a pathway to support.”

Tom Veli, Partner at LCP Delta, added:

“The UK was one of the first countries to adopt smart metering to bring in a whole range of demand side benefits – reducing manual reads in homes and making it easier for consumers to switch suppliers. While the rollout has been slower than hoped, a more comprehensive smart meter system now presents value-creating opportunities for the nation at a time when energy bills are causing real pain. Our report considers a range of options across data and analytics, such as improving meter health and outage detection, but really focuses on areas where there are substantial, tangible gains to be made if industry and policymakers are prepared to work together. Beyond this, there is so much more we can do with our smart metering system. It is an underutilised piece of grid infrastructure, and now is the time to flip the switch from reactive to proactive.”

Launch Event

The report was launched at a cross-public and private sector event in Westminster, hosted by Calisen and LCP Delta, as part of London Climate Action Week.