By showing customers their own power usage patterns, smart electricity meters assist in power grid load balancing, reducing the need for 'spinning reserve' at power stations, by offering consumers cheaper tariffs away from peak load.
Such meters need to measure power, store the data, display patterns of consumption, and communicate with the utility company.
In more advanced applications, the meter also acts as a hub for associated gas and water meters, and could participate in a home network as part of a smart grid - where non-time-critical loads are turned off briefly during grid demand surges.
Fundamental to smart meters is accurate power flow measurement.
"Minimum accuracy is 2% and most electronic products are 1% or better," Mark England, MD of Cambridge utility meter design firm Sentec, told Electronics Weekly. "The next generation will almost certainly be 0.5% and the ones we designed for the US market are 0.2% which means they must have a 20 or 24bit converter. The converters we use are [sigma delta] to get linearity over a wide dynamic range."
Designers can either match stand-alone ADCs with their choice of microcontroller, or plump for purpose-designed microcontrollers from the likes of Analog Devices, Teridian and Texas Instruments that include suitable ADCs, a dedicated hardware power calculation block, and an LCD interface.
"From the metrology perspective, the hardware is there," said England. "If you go SoC [microcontroller], you are still a bit restricted on functionality because of the CPUs. The minimum I would consider for a new design is a 16bit processor, and I would probably go the whole hog and use 32bit."
He is eyeing ARM's latest simple 32bit processors: "I would probably look at Cortex [M series] because if you use a standard architecture you end up with a design that is not too hard to port."
Communication hardware within the meter is dependent on the architecture chosen for the grid and, if necessary, within the home.
Grid-side data transfer possibilities include: power-line, low-power un-licensed radio for a mesh network, or higher-power licensed radio for a cellular network.
Within the home, power-line or low-power un-licensed radio is likely, plus a wired or wireless link to the customer information display, and the same to associated water and gas meters.
Typically hand-shaking guarantees all data transactions, so all communication need to be bidirectional, and everything is strongly encrypted to prevent fraud.
Enough local data storage must be provided to cover multi-day external infrastructure failures.
There is need for standardisation - hence the UK Government's call for suggestions over its national smart metering scheme.
"If you are going to be able to change electricity supplier, you need to have standards," Svien Vetti, Texas Instruments business manager for short range wireless devices, told Electronics Weekly.
It is unlikely that one grid-side communication system will meet the requirements of every location, from a city flat surrounded by networks, to a remote rural castle needing drive-by reading; so meters will need more that one interface built in, or have optional plug-ins.
The chances are that electricity meters will have one receiver operating continuously to remove the need for water and gas meters to receive continuously. They will instead transmit asynchronously when they need to.
"Gas meters are typically designed for a 10 or 15 year lifetime between battery changes," said Vetti. "This is quite challenging. You cannot transmit much data, only hourly or daily."
Although power is always available to the electricity meter, every milliwatt is multiplied by the number of households on the grid.
Internal consumption is 5-7mA for metrology, and a fraction of a mA in the CPU, said Sentec's England, plus bursts of up to 2W if the a cellular network is used for grid communications.
To this, Vetti adds 20mA at 1.8-3V for a ZigBee receiver and 30mA for a transmitter, dropping both of these slightly if Wireless M-Bus at 868MHz is used.
At these low levels, power dissipation will be dominated by the mains to DC power supply which at its simplest could be 200mW from a capacitive dropper or under 50mW from existing power controllers including Power Integrations' LinkSwitch-II family.