The market for in-home display devices is subject to different drivers around the world. The potential for customer behavioural modifications is much debated, and the inhome display designs and standards have been shown to have a key influence. Smart Energy International invited four experts from different regions to offer their experiences and perspectives, as well as offer an analysis on key market drivers.
SHOW ME THE MONEY … CONSUMER DISPLAYS AND SMART METERING IN THE UK
Since dedicated consumer display products arrived in the UK around five years ago, every possible driver of the market – legislation, social trends, technical feasibility and energy market economics – has changed substantially. Although the political environment has moved away from a certain mandate for inhome displays, the control of energy consumption has become a mainstream media concern, reflecting increasing public interest: 96% of people surveyed for a Carbon Trust report in 2008 said they would use energy displays to reduce their consumption.
Meanwhile, the energy industry is developing standards to help ensure displays can interact with the smart meters of the future, notably through standard communications interfaces.
In the process a number of exciting new companies have emerged, along with some learnings about the presentation of information to effect change. With the announcement at the end of 2008 of a mandate for smart meters in the UK market, a clearer pathway is emerging for consumer display units (CDUs) and the next 12 months should see interesting developments in the UK market, as smart metering and CDU products begin to converge.
The market at the moment divides between consumer purchased units and utility supplied. The earliest models of in-home displays, consumer purchase units have traditionally been stand-alone, depending on self-installed sensors and with no connection to the meter data or tariff information. In this sector Electrisave (now rebranded as The Owl for UK markets), Efergy and Eco-eye provide very similar products, which are unsophisticated ‘weather station’ units in appearance, displaying instant kWh use, cost, accumulated cost and CO2 output.
In contrast, the Wattson takes a different approach, with an emphasis on attractive design and simplicity. Its display can provide limited information options, although the monitor can download information to a PC for more sophisticated analysis.
At present, all these models rely for their data on clampon sensors, but utilities in the highly competitive UK market are now looking for displays that can differentiate them from their competition and provide another point of contact with their customers, slowing the rate of switching between energy suppliers. A long-term objective for the performance of these devices is accurate consumption and tariff information taken directly from the meter.
The UK’s Energy White Paper in 2007 kick-started the utilities’ interest in CDUs when it announced the government’s intention to mandate their introduction with new meters and for every householder who requested one. Although the threat of a mandate was withdrawn a year later, it prompted the ERA to define a protocol (TCP/IP) and data exchange format (XML) for communications between meters and local devices as part of the Supplier’s Requirements for Smart Metering standard.
The standard has also characterised the requirements for the communications solutions between meters and local devices, without specifying any one solution. However the requirements of the original Operational Framework (see box) strongly favoured a small class of solutions: Zigbee, Z-wave and power line carrier and the latest local communications development report from the ERA also concludes that a low power wireless solution is appropriate for most metering installations.
Jason Brogden from Engage Consulting, the smart metering programme manager at the ERA, comments: “Good progress has been made to conclude a desk-top based evaluation of local communications options, but we now need further work and robust field tests in order to complete the selection of a local communications interface for the British market.”
Of course, the SRSM does not set any standard for the CDUs themselves, and it seems at the moment that they may fall outside the mandate for smart metering recently announced by the UK government. However, the door has been left open for utilities to introduce the technology, particularly as the prices of consumer electronics fall and some utilities are already making direct investments in display companies like last year’s deal between Scottish and Southern Energy and Onzo.
In the long term, the standard will effectively give a level playing field for access to meter data, so competition between CDU products will be driven by features such as the presentation of energy information, its analysis (whether on the CDU or web based) and whole life cycle issues such as battery life and disposal costs.
New display providers are bringing expertise in design and presentation, and focussing on the customer experience of using these displays – what information they need, where and when they need it, and what actions they are prepared to take after viewing it.
Expertise in human interface design helps consumers extract information from a lot of data, data which is not familiar to them. They can then make judgements on what actions they may need to take. The most commonly provided display features now are:
- Instant kWh view
- Instant pence per hour view
- Kg CO2 per hour view
- Total CO2 for year view
- History view (divided into day/week/month)
SRSM Local Communications Requirements
This is already a substantial amount of information to display in a small area in a way that makes sense intuitively. To add to this, connection to the meter and other technical advances, such as appliance identification, will make a great deal more data available on different tariffs, what major appliances are consuming, and alerts or information from utilities. Collecting this data, communicating it to a CDU and helping consumers make sense of it are all technical challenges that need to be met over the next few years as the preparations for a wholesale roll out of smart metering in the UK begin.
IN HOME ENERGY DISPLAYS: A REAL TIME SOLUTION
The UK has one of the most competitive retail energy markets in the world. Six large players share most of the market evenly between them. Switching is around 22 per cent per annum, which indicates healthy competition, although research suggests that consumers do not generally realise a financial benefit from switching. The market is deregulated so that revenue from nonenergy sources can be obtained from customers. So the focus is on attracting and retaining customers, and increasing revenue per customer.
The UK has a reasonably robust distribution infrastructure and although it is suffering from a lack of generation strategy, which will ultimately impact supply, that issue is yet to be felt by consumers. So demand response doesn’t currently feature in the market.
The UK climate is not particularly good for solar, and planning restrictions are tight so local renewables don’t play much of a role, but wind is a farm-scale opportunity. Finally, UK utilities share a desire to reduce the cost to serve with their counterparts the world over and continue to look for ways to improve customer service.
IN THE BEGINNING
Demand for a tool that would enable the consumer to monitor energy usage came originally from those who bought climate change early and were determined to “do their bit”. Inventors and design students supplied them with the tools; displays were consequently basic and ugly or basic and beautiful. The market for them was small: limited to deep greens and gadgeteers.
Towards the end of last year, the government announced a programme for the universal roll out of smart meters by 2020. It is not clear that energy displays will be included in the mandate despite the benefits to the consumer they would bring. The new Department for Energy and Climate Change appears to be divided along its historic lines, with ex-Department for the Environment staff supporting the inclusion of displays and former Business and Enterprise Department seemingly less keen. It’s likely that the market will continue to be divided between those who satisfy a government requirement at lowest cost and those who invest in their relationships with their customers.
Long-term, the UK market will probably align with the rest of the world, as greenhouse gas emission reduction targets and supply constraints bite and provide the demand response impetus already seen elsewhere. Meanwhile, those territories that are demand response led will see customer attitudes greening further and suppliers will realise they need to bring consumers along with them rather than impose solutions on them. In both cases utilities will find that the limiting factor on their ability to achieve their objectives will be the readiness of the consumer to change behaviour and adopt new tools. Energy displays have a key role at the start of the user journey in providing useful information in real time and look set to become prevalent the world over.
AN ASSESSMENT OF IN-HOME DISPLAYS IN AUSTRALIA
There have been two major drivers over the past 20 years in Australia pushing the electricity industry to examine and promote the use of in home energy displays by consumers.
The first driver relates to major changes in the Annual Load Duration curves and plant utilisation since 1990. This has lead to massive investment in the electricity industry to provide sufficient peak load generation plant, transmission and distribution capacity to supply temperature sensitive loads. The problem for both the industry and consumers is that the most volatile load only occurs at the most between 5% and 10% of the time. The industry has to invest in sufficient capacity (MW) to meet a 1 in 10-year event and cost recover in MWh. This has put a strong upward pressure on network costs driving up prices for consumers.
The second driver relates to the substantial asymmetric financial risks associated with the gross pool merit order dispatch design of the Australian National Electricity Market. The current floor price is set at minus A$ 1000/MWh and the capped ceiling price is A$ 10,000/MWh. The average pool price is currently running at around A$ 40/MWh. The market design is based on the concept that a generator who has invested in plant to meet the one in 10 peak demand may get cost recovery if they are dispatched for a period over the time frame. The consequence is that any retailer who has pool exposure to a period of high prices runs the serious risk of bankruptcy.
In home displays offer a practical opportunity to manage temperature sensitive load, minimising retailer risk and reducing customer bills. Many examples exist in the Australian market and were presented at the latest Metering Billing/CRM Australia/New Zealand 2008 Conference, including the seven solar cities projects, the Intergral Energy Dynamic Peak Pricing Trial, and the Charles Sturt University Wagga Wagga Campus Study.
SEVEN SOLAR CITIES WILL AID IN-HOUSE DISPLAYS
The Australian government has allocated A$94 million to seven different communities to trial innovative new sustainable energy measures until 2013. The seven communities are Adelaide, Alice Springs, Blacktown, Central Victoria, Moreland, Perth and Townsville. This programme is to demonstrate social and economic effects of combining responsive energy pricing with the widespread use of solar technology, energy measures and smart meters and to learn lessons that can be applied much more broadly to ensure a more sustainable energy future for Australia.
The data will be plentiful and will be real-time energy use data, with emphasis on price signals. The range of uptake varies in the seven communities and to date sees a mixture of domestic and commercial users involved. In Alice Springs, numbers are 350 domestic, 50 commercial; in Townsville Solar City 87; in Blacktown 700 smart meters.
The benefits of the Solar Cities projects to consumers is that they will better understand their energy use and be rewarded for managing energy wisely. New client relationships can also be built by electric companies with their consumers as they understand the extent of cost in service-peak electricity demand periods and invest in infrastructure accordingly.
Industries can improve market position as they are able to test new sustainable energy options in a low risk environment. With the data collected, the government will have access to better information.
The integration of communication is the step with the in-house display and these devices will be utilised. In Alice Springs, in-house displays will be used. The community engagement to date has shown that when participants are offered a smart meter with an inhouse display, there is generally more interest in the smart meters.
INTEGRAL ENERGY DYNAMIC PEAK PRICING TRIAL
This trial in Western Sydney NSW covered two years and incorporated remote interval meters, customer feedback mechanisms and innovative pricing arrangements to allow customers to more efficiently manage their energy usage.
The trial had three groups of customers, dynamic peak pricing, dynamic peak pricing with in-house displays and seasonal time of use pricing. Overall, 1,000 customers participated (including the control group of 360). The control group and three groups were selected on a random basis and the demographic mix compared with a random sample of the population. The mix of each group was broadly consistent with the population sample. Incentives for customers included A$100 joining fee and $200 completion fee. Energy usage by customers was by web interface. Customer engagement included a Welcome Pack, website and an in-house display.
Results from the trial indicated that customers responded to the pricing signals with significant demand reduction (in the order of 30%-40%) and significant savings to their bills. There was also a conservation of energy across the trial with a corresponding positive reduction in carbon dioxide. The trial will extend for another year with no further incentives to customers. To date 80 out of 900 customers have opted out. With in-house displays, it appears that at the start 85% were plugged in and over time, 55% remained plugged in. Preliminary results indicate that the customer savings from this trial have been around A$300, of which A$200 was due to change in behaviour by just being part of the dynamic peak pricing with in-house displays. Australia is emerging with new developments as rollouts of smart meters commence in Victoria in 2009 and this will allow the pursuit of innovative feedback mechanisms for customers.
CUSTOMER INFORMATION DISPLAYS – AN INDUSTRY CONUNDRUM
To display or not to display, is not the question. What to display and how to display, is the question.
There is little disagreement within the electric power industry that increasingly aggressive efficiency, conservation, demand response, and carbon reduction objectives will require much more effective customer education. Customers have to understand how they use energy before they can make rational decisions to improve efficiency and change their usage patterns. Anyone that has ever tried to make sense of a confusing monthly electric bill or decipher their energy usage patterns by reading their own electric meter understands that better information and easier access to information are at the centre of this educational challenge.
To many within the industry, electronic customer information displays are the obvious solution. Regulatory commissions in California, Texas, Canada, and Europe are seriously considering or have already decided that real-time displays should be deployed. Commissions support their decisions referencing research that claims “… providing instantaneous feedback on household electric demand show promise to reduce energy consumption by 10-15%.” Just build a gateway into an advanced meter and give customers an electronic display panel that provides continuous, instantaneous, real-time demand, usage, and cost information. Customers will do the rest. Technology to the rescue! Problem solved. What’s for lunch?
Is the solution really this simple? Is real-time meter data provided through a home automation gateway (HAN) and integrated display panel the answer to customer education? Is the advanced meter infrastructure (AMI) communication system the most appropriate and effective channel for providing customer information? Are the 10-15% savings being attributed just to a display device realistic? Isn’t it more likely that consumers will need a wide range of additional information on special programmes, incentives, appliances, financing, and their own usage patterns to facilitate change?
There are two fundamental questions that need to be answered before the “display” issue can be resolved. First, what information do customers really need to make rational energy decisions? Second, what is the best form and medium to present this information? The answer to the first question generally provides the answer to the second.
While there are very productive applications for customer information displays, the past research does not address either of these two fundamental questions. Today’s energy industry objectives are generally predicated on the need for a significant “market transformation”, where customers change both their behaviour and energy consuming infrastructure. Unfortunately, the most often cited research studies are dominated by anecdotal findings that reflect short-term observations of customers responding to a random variety of automation systems and display panels, unconstrained by sample design, control group, rate design, or bill presentment factors. Technology trials are interesting, but they don’t necessarily provide a very sound basis to support long-term capital investments.
It’s 08h30 one morning and as you’re leaving to take the kids to school you glance over at the new real-time electronic energy display panel that your utility just installed on the wall by the front door. You notice that junior left the light on in his bedroom again. According to the display, your energy is currently costing you US$0.107 per kilowatt hour and your monthly bill is estimated to be about US$75, just within your US$80 target budget. As you turn to scold junior you notice that the display instantly changes to show that your energy costs are now US$0.198 per kilowatt hour and your estimated monthly bill has magically ballooned to US$137!
What just happened to make the costs go up so fast? What’s wrong with this picture?
WHAT INFORMATION DO CUSTOMERS NEED?
Customer energy usage decisions and the information needed to support these decisions generally fall into three broad categories differentiated by financial investment requirements. The greater the investment, the longer the decision process and need for more information.
- Behavioural decisions are short-term actions that generally require no new equipment and little investment. These decisions can be made in a matter of days or weeks. Programming or changing thermostat settings, turning off lights in rooms that aren’t being used, taking shorter showers, and shifting laundry or dishwashing tasks to off-peak hours fit into this category. These decisions are most applicable to reducing demand; however they can produce modest energy savings. Customer behaviour changes require relevant short-term information that could include incentives linked to specific actions, the current as well as 24-hour forecasts of energy prices or costs, and current usage, preferably linked to specific appliances or end-uses. Display panels linked to the customer meter may provide support for some of these applications. Unfortunately, short-term behaviour or lifestyle decisions not supported by automation devices, more efficient and capable appliances, or other infrastructure can produce energy impacts that are inconsistent and unreliable. Consequently, behavioural decisions on their own will most likely not accomplish most regulatory or legislative energy objectives.
- Adaptation decisions require moderate customer financial investment to facilitate changes not addressable by behaviour alone. Examples might include planting shade trees, weather stripping doors and windows, replacing incandescent with compact fluorescent lighting (CFL), and installing simple timers. Adaptation decisions can often require repetitive contacts that promote benchmarking information or tools that provide customers with before-and-after energy and bill impact estimates, and lists of suppliers and contractors. Decisions that require even small customer financial investments can often take months and may require special discounts, subsidies or other incentives, information not necessarily compatible with display panels linked to a customer meter.
- Infrastructure decisions require major customer financial investments to build in permanent structural changes in energy usage. This can include appliance or end-uses retrofits to improve efficiency, replacement of windows, wall and ceiling insulation, or installation of solar panels and other control equipment. The magnitude of investment can often require outside or supplemental funding and may by itself introduce a range of complex process and evaluation requirements. The result is a decision process that can take months or years.
WHAT IS THE BEST FORM OR MEDIUM TO PRESENT CUSTOMERS WITH INFORMATION?
Unfortunately, there is no definitive answer to this question. To be most effective, information should be tailored to address specific decision parameters and customer needs. We also know that complex utility rate forms and indecipherable billing formats create barriers to customer education that no display or technology patch can easily overcome. What we also know is that existing internet technology is already capable of providing lowcost customisable applications.
While meter-linked information displays can provide information on current usage, billing cycle and rate design complexities make them less effective at providing cost information. The rapid change in energy cost illustrated in the example at the beginning of this article illustrated what can happen with tiered, time varying, or dynamic rates. Periodic or sudden changes in a rate or in the price of energy can immediately introduce large swings in a customer estimated monthly bill. There are ways to address these anomalies, but it is unlikely that display provided cost information will ever fully match what appears on the customer bill. That alone creates other customer service and credibility problems. Meter linked displays are also not well suited to providing historical usage, benchmarking, rate or financial evaluation tools.
So why commit to a narrow technology choice that we know in advance can’t address the expected customer decision framework? Displays will play a role in providing customer with energy information, however the broad combination of applications and information; needs underlying the customer decision framework will be better served by broadband internetbased applications capable of being displayed on a variety of non-dedicated display devices. Why invest in a dedicated display panel linked to a utility electric meter when your cellular phone, netbook, PC, and television can provide access to a full range of applications that can be customised to each individual customer’s requirements at no additional investment? Nokia , Microsoft, and several other companies, are already planning or offering new service platforms to provide a full range of energy services.
So what was the question?