LONDON - Smart meters, which encourage consumers to cut energy consumption, are crucial for Britain to limit costs for achieving its ambitious 2050 greenhouse gas reduction target, an executive from National Grid said.

Without big curbs on energy use, hitting the government target of an 80 percent drop in emissions from the 1990 level could cost up to twice as much as otherwise, Chris Bennett, Future Transmission Networks Manager, told Reuters.

The cheapest way to meet the 2050 target of 80 percent reduction in greenhouse gas emissions is tackling the consumption side of the equation first, he said on the sidelines of a conference on smart meters late last week.

If we do nothing to people's demand, and still try to hit the 2050 target, some of the calculations we've done have shown it would be twice as expensive as what is already a big bill. Step one is definitely reducing overall consumption.

Last Wednesday, the government announced all UK households should be equipped with smart meters by 2020, which will pave the way for smart grids, seen crucial for a low carbon society, including large wind farms and electric vehicles.

Smart meters provide consumers with real-time information about their energy usage and would allow energy suppliers to introduce lower tariffs for times of day when demand is low to encourage people to spread their energy consumption more evenly throughout the day.

ELECTRIC CARS

Electric cars could be left to charge overnight when electricity demand is otherwise very low, helping use up power generated from Britain's growing number of wind farms which unlike coal and gas plants do not raise and lower output according to need.

When you look at the road map all the way out to 2050 and the generation mix we are going to have, such as intermittent wind ... we need to have a system with increased visibility, Bennett said.

Once you get demand down as well as you can, then you go through the process of decarbonising the electricity sector ... Once you have decarbonised electricity, you can move people off petrol and diesel cars.

By 2020, Britain plans to source about a third of its electricity from renewable energy, led by 33-40 gigawatts of offshore wind farms. It is also introducing feed-in-tariffs next year to promote small-scale renewable generation.

Smart grids include intelligent systems that monitor electricity flows to and from networks, allowing distributors and generators to manage energy from a future mix of sources more efficiently.

(And) if we can move people's demand away from the peak, then clearly there's a big benefit in terms of not needing to build stations to cope with the (peak) demand, he said.

Once you get this technology out there, it should enable people to move demand through smarter tariffs and the like.

While the government put the costs of rolling out some 43 million smart meters at about 9 billion pounds over 10 years, industry officials expect benefits to outweigh such costs, if it succeeds in altering consumer usage.

Richard Hanks, Smart Metering & Smart Grid Leader, from consultancy Accenture, said that although the figure was large, it would work out at less than 2 pounds per household per year over the 10 years.

He also calculated the first phase of smart grid roll out by 2030 would cost about 5 billion pounds, its benefits could total about 6 billion pounds from increased efficiency.

And also equally important is that it provides you with a framework ... for a low carbon future, Hanks said.

Smart grid is a useful way to manage different power flows so we can maximize what we take from renewable resources.

(Reporting by Nao Nakanishi, editing by Daniel Fineren and Keiron Henderson)

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