Ofgem has announced plans to change industry arrangements to better facilitate the use of advanced smart meters, which will enable network operators to save customers' money.

The next generation of smart meters, which will be installed when mass roll-out begins next year, will have the potential to interact with the network and provide real savings to customers’ bills.

“It has long been recognised that the real benefits of smart meters come from the smart grid they enable,” said David Smith, chief executive of the Energy Networks Association. “Network operators will be able to better maximise the use of renewable energy, manage demand and reduce the amount of extra copper in the ground needed. There is the potential for smart grids to save consumers as much as £12bn to 2050.

“By giving customers the ability to engage with their smart meters more effectively, the technology can work for them, shifting demand away from the peak times and reducing the need for network reinforcement. We will see a partnership between the customer and their network operator, which will deliver savings on bills.”