There are two important things that can only be done via smart meters:
- Time-of-use tariffs, which are aligned to the cost of energy production. For example, Octopus Tracker (https://octopus.energy/smart/tracker/) has an energy price set daily based on the wholesale rate. This is (on average) cheaper for customers, and cheaper for the supplier (because they don't need to spend as much on hedging).
- Demand shifting, so customers can be paid or get discounts for reducing electricity usage when the load on the grid is high. The UK did this over last winter, and led to a peak energy reduction of 188MW (about 10% of the UK's coal power generation capacity). There's a report at https://octoenergy-production-media.s3.amazonaws.com/documen...
Both are ways of aligning the cost and environmental impact of energy with its price, and both become increasingly important as a higher percentage of energy is generated from variable renewable sources.