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'Smart metering' is a phrase used to describe a wide range of electricity metering options. At their simplest a smart meter is a display that you can mount in a more 'public' area so that you can see the amount of power being drawn (kW) whenever you walk past. Some will tell you the kWh used 'today' and even tell you what it cost.
Smart metering is also used to describe meters that are automatically read from afar using a radio or GSM connection. The simplest benefit of these is that you should never receive an estimated bill. In addition, these meters normally record the amount of electricity you use (kWh) every half hour. The full benefit of this is only truly realised if you have online access to this data. For example, it might show that your electricity consumption suddenly increases at 11pm when it should really be 00:30 to coincide with the cheap rate electricity tariff. Another common observation is the amount of electricity used when there is 'nothing' going on which can prompt you to search high and low for the offending equipment and turn it off.
Some electricity suppliers offer smart meters as an incentive to sign up with them. However, when the contract ends it can make it can be even more difficult to change suppliers than normal so make sure and check the small print. You can also have your own smart meter installed by an independent metering company that will ensure the data flows to whoever you electricity supplier is. As a guide this can cost around £300 p.a.
Ultimately it is expected that all electricity meters will be replaced with 'Smart' alternatives as a matter of course. However, the current timescale for this extends to 2020.