Presentation given in the final meeting of the project "Energy Efficiency Policies: a Worldwide Panorama", which was conducted under the guidance of the Energy Efficiency Policies & Technologies Knowledge Network. Date: 27-28 May 2013 in cooperation with WEC, CFE & ADEME.
Case study on innovation smart billing for household consumers and its main findings
Consumer protection in the EU & the role of energy ombudsmen
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Christophe Dromacque, VaasaETT: Ademe & WEC Energy Efficiency Policies 2013 - Case study on innovative smart billing for household consumers
1. VaasaETT 1
Final Meeting of the Project
“Energy efficiency policies: a worldwide panorama”
Under the guidance of the Energy Efficiency Policies & Technologies Knowledge Network
27-28 May 2013
WEC/CFE/ADEME
Case study on innovative smart billing for
household consumers
Christophe Dromacque
3. Background
• Households are often perceived as a very difficult target group for
energy efficiency programs due to their diversity and the fact that
they often see energy as a low interest and low involvement product
• However:..
Households account for about 30% of the EU’s final electricity
consumption and between 20% and 39% in the markets reviewed as
part of this report
Globally, residential consumption is expected to increase steadily in the
foreseeable future
Energy prices keep increasing much faster than inflation in many parts
of the world
• Need to be addressed if environmental targets are to be met and for
affordability reasons VaasaETT 3
6. 1- Participants’ energy
use compared with that
of their neighbors
California: Sacramento Municipal Utilities
District (SMUD) Home Energy Reports
6
2- Suggested actions
participants can take in
order to reduce usage
3- Shows participants
the results of those
actions over time
7. Visual representation of
the different time bands
and time-of-day rates
Republic of Ireland: Smart Metering
Customer Behaviour Trials
7
Reminder of cost of running appliances at different
times of day
Tips and advise how to benefit from ToU tariffs
8. Sweden: Interesting features -
E.On Sverige
8
Breakdown of energy bills into its different components and who is responsible
Electricity
Gas
9. Victoria (Austalia): Interesting features
- Origin Energy
9
Average daily energy usage and associated GHG emissions
Electricity Gas
10. 10
Abu Dhabi (UAE): Case study – Newly
introduced electricity bill
Real cost of
electricity before
state subsidy
12. Finding 1
• Smart bills can be an efficient way to promote energy efficient
behaviors leading to reduction in energy consumption, bills and
increased customer satisfaction;
14. VaasaETT 14
15 million homes receive similar reports designed by Opower in the US
and elsewhere (online or paper-based)
Awareness of energy consumption
• 83% of customers remember receiving the reports
• 73% read it thoroughly
• 74% act upon it
Improvement in customer relationship
• Level of overall customer satisfaction with utility is 6% for customers who
receive the reports
• customers exposed to this program are more likely to get involved in other
utility offerings and programs
“Soft” benefits
15. VaasaETT 15
CER trials - Impact after 12 months
(4,000 participants 2010 – 2011)
Reduction in energy consumption
Stimuli Impact
Bi-monthly bill with energy
usage statement
Electricity overall consumption
reduction: 1.1%;
Electricity peak consumption reduction:
6.9%
Gas overall consumption reduction:
2.2%
Monthly bill with energy usage
statement
Electricity overall consumption
reduction: 2.7%;
Electricity peak consumption reduction:
8.4%
Gas overall consumption reduction:
2.8%
Electricity includes
the impact of the
dynamic tariffs.
However, impact is
greater when
statement is sent
each month.
16. VaasaETT 16
Reduction in energy bills
Participants Impact
All
€19 - €26 or 3%-4% of a typical
annual electricity bill
€13 - €16 or 2%-3% of a typical
annual gas bill
Fuel poor Electricity € 22 - € 24 Due to reduction in
consumption at peak time
17. VaasaETT 17
Awareness of energy consumption
• 82% of participants made some change to the way they use electricity
• 87% made changes to the way they use gas
Consumers satisfaction with usage statements
• The electricity usage statements were rated as effective or very effective in
helping to reduce usage by 79% of the participants
•The electricity usage statements were rated as effective or very effective in
helping to reduce usage by 54% of the participants
“Soft” benefits
18. Finding 2
• Smart bills can be a cost efficient way to save energy;
Opower-like programs such as the one reviewed in the Californian case study
costs an electric utility 7.48 USD per household per year or 2.5 cents per kWh
saved (1.6 and 6.4 ¢/kWh saved for other energy efficiency programs)
19. Finding 3
• Smart metering does not necessarily result in smart billing or any
other feedback programs without adequate regulation,
Sweden did not mandate smart meters but only monthly accurate billing. The goal was
to address customer dissatisfaction with billing and switching errors. Thus, the
legislation did not specify any minimum requirements for meters. Network companies
responsible for implementing billing simply sought to comply to the regulation and
improve their operations. The possibility to use smart meters to provide consumption
feedback to households and as a building block for a smarter electricity grid was
overlooked. The cost amounted to around €220 per customer, paid for by customer
but no comprehensive feedback (or dynamic pricing) program that would allow them
to benefit was launched by utilities. The smart meters would need to be upgraded to
allow for such advanced programs.
20. Finding 4
• Feedback programs can increase the acceptance of dynamic tariffs
or smart meters rollouts;
In an attempt to shave peak demand, the Victorian Department of Environment and
Primary Industries decided in 2007 to roll out smart meters and ToU tariffs to all
customers by the end of 2013 but without IHDs as was planned at first. Following this
decision, Victorian households and consumer associations started complaining about
the inflated electricity bills to pay for the meters without being accompanied by any
means to track and manage electricity consumption even though it was one of the
main arguments to support the roll-out. In the face of the popular backlash that
ensued, the Victorian government announced in March 2010 a moratorium on
mandatory ToU tariffs (still in place) while the installation of smart meters across
Victoria continues in accordance with legislative requirements. Without dynamic
tariffs, the main objective to shave peak consumption will be negatively impacted.
21. Finding 5
• Although quality and insight are greatly improved by the data
granularity enabled by modern metering systems, effective smart
bills can also be implemented with traditional meter data;
22. Chilectra - Chile
Historical
consumption over
last 13 months
Energy saving tips and
advice on the other
side of the bill related
to cooling, heating,
cooking, lighting, etc
23. Al Ain Distribution
company – Abu Dhabi
Benchmarking information on
electricity usage
CPL Power – Hong
Kong
Historical consumption over past 13
months
ESKOM – South Africa
Consumption over past 12 months
Maximum power demand over
past 12 months
24. Finding 6
• The most advanced and arguably the best cases of smart bills are to
be found in countries with both enhancing technology and
supporting regulation.
25. Enabling and supporting policies - California
• Smart metering minimum requirements with hourly
reading and third party access;
• Billing rules in effect mandate smart billing;
• Utility revenue decoupling.
VaasaETT 25
26. Enabling and supporting policies - Ireland
• Smart metering requirements (half hourly reading, third party
access)
• Energy usage statements and IHDs to be rolled out to all
consumers and IHD)
VaasaETT 26
28. 1. The specific design of the bills should be left to market forces to allow
for innovation and creativity;
2. Some building blocks of smart billing have proven effective and should
be made mandatory. These elements include: (i) normative energy use
comparison, (ii) tips and advice as to how to reduce overall energy
usage (iii) tips and advice as to how to benefit from dynamic tariffs if
applicable), (iv) historical consumption data in order to track progress,
(v) in case energy is subsidized real cost and real bill size should there
be no State subsidy should be mentioned, (vi) indicate the different
elements of the bill and who is responsible (retailer, DSO, State) and
finally (vii) show pollutant emission associated with billed energy
consumption;
3. We believe (in the same way the Energy Efficiency Directive) that
accurate billing frequency should increase to possibly monthly;
4. Supporting regulation should ensure that feedback and education
requirements be an integral part of any smart meter or dynamic pricing
policy package to ensure that all consumers can benefit financially and
otherwise.
29. What would 1.8% electricity consumption
reduction per year mean for the US alone?
VaasaETT 29
reducing residential electricity usage across the United States by 26,000
GWh;
reduce greenhouse gas emissions by 8.9 million metric tons of carbon
dioxide per year – equal to the emissions from three 500-MW coal-fired
power plants;
save households just over $3 billion dollars per year on their electric
bills.
Davis, M. (2011), "Behavior and Energy Savings. Evidence from a Series of Experimental Interventions“.
30. 30
Example of a standard bill
Finland (2013)
Will not
happen with
my bill