EUW - Amsterdam, 17th Oct 2013
"Proven Approaches to Successful Demand Response Programmes" - Global Best Practice by the Head of Research of VaasaETT, Christophe Dromacque
More than Just Lines on a Map: Best Practices for U.S Bike Routes
Christophe Dromacque, VaasaETT: Proven Approaches to Successful Demand Response Programmes
1. Proven Approaches to
Successful Demand Response
Programmes
Global Best Practice
Christophe Dromacque
Head of Research
VaasaETT
EUW – Amsterdam
October 17th 2013
3. Best Practice, Data, Analysis &
Expertise from around the World
Customer Psychology & Behaviour
Customer Lifetime Value
(Switching and Loyalty, Prices/Savings/Margins, Billing/CRM, Branding, New Offerings
Smart Energy Issues
(smart grid, demand response, dynamic pricing, feedback, smart billing energy efficiency, smart home, distributed generation)
Our Key Focus
4. VaasaETT 4
‘Empower Demand Phase I’
• 340 sample groups
• 158,000+ residential participants
• 45% organised after 2005
• Results measured: energy
conservation, peak clipping and
financial savings
Uncover the potential of residential
demand response through a mass
pilot comparison
6. VaasaETT 6
‘Empower Demand Phase 2’
• 9 pilots analysed
• Focus on Communication
(including also feedback and
education)
• Evaluation of Latest Technologies
& Solutions
• Consideration of Increased
potential if latest technologies and
communication knowledge applied
Applying insights from
behavioural science to
customer engagement
around energy
7. VaasaETT 7
Good practice 1: In-depth customer segmentation
Meter hunt, SEAS NVE, Denmark
Web portal, personalized tips and feedback
Average consumption reduction: 17%
8. VaasaETT 8
Good practice 2: Pre-programme communication and education
Perth solar city, Australia
IHDs, ToU tariffs, DSM, PV, Solar water heaters
Average consumption reduction: 1.5% (IHD) – 40.7% (PV)
Peak clipping: 5% (IHD + TOU) - 25% (automated AC)
9. VaasaETT 9
Good practice 3: Customer education and support during programme
Perth solar city, Australia
CER trials, Republic of Ireland
Power Cents DC, USA
10. VaasaETT 10
Good practice 4: Integrated approach to feedback
OG&E Smart Study Together, USA
Dynamic tariffs, IHD, web portal and mobile app
Average savings of $157 compared to standard rate plan
Peak clipping: 6% - 16% (excluding automation of appliances)
11. VaasaETT 11
Good practice 5: Step-by-Step Discovery,
Experimentation and Enlightenment
Enel info +, Italy
Ongoing
Smart info display Web Portal Mobile App
Few months
12. VaasaETT 12
Good practice 6: Personalized actionable insights
Opower’s home energy reports
Paper-based consumption reports
Average consumption reduction: 1.5% - 3.5%
Participants’ energy use
compared with that of
their neighbors
Shows participants the
results of those actions
over time
Suggested actions
participants can take in
order to reduce usage
13. VaasaETT 13
Choice Comfort Savings
Good practice 7: Complexity should not be dealt with by the customer
Energy Select , Gulf Power, USA
CPP, ToU tariffs, smart thermostat
Average energy reduction = 22% during high price period (TOU)
Average energy reduction = 41% during critical period (CPP)
14. VaasaETT 14
Both reports I mentioned can be downloaded from ESMIG’s website:
http://esmig.eu/resource/empower-demand-report-phase-i
And
http://esmig.eu/resource/empower-demand-report-phase-ii
I don’t think Im exagerating when I say 100s of pilots have tested different SM/SG solutions. From a customer POV, it means a cost but SM/SG + new services makes it possible to lower overall energy consumption, consumption at peak times and also crucially energy bills which we are all hoping since we are all customer of a Utility and all receive electricity bills will more than compensate the cost of updating the grid. Yet there is confusion and disagreement within the energy industry but also on the part of decision makers on exactly what can be achieved with these new energy related services or offers, do they remain effective, if the pilots show reliable results, if the programs can be cost effective, what type of feedback should be provided and in what format etc.
Yet there is still confusion and disagreement within the energy industry but also on the part of decision makers on exactly what can be achieved with these new meters and these new services or offers. do they remain effective? Can the programs be cost effective? what type of feedback should be provided and in what format? How should they differ according to different types of customers? Etc... How do we get customers to be interested in trying to lower their consumption? How do we help them get there? How can Utilities get their customers to reduce consumption at critical times? How much electricity and Euros can customers save? How different factors such as climate, season of peak, market and customer specificities influence the potential and how they interact with each other, How do different households with varying income, level of education, sizes, etc respond to different messages if at all? Etc… etc… These largely unanswered questions are creating an aura of uncertainty surrounding the potential of smart meter enabled programmes to meet the aims of the EU and its governments. It also raises questions as to whether smart meters are worth their cost and whether they can bring lasting benefits to consumers. It lowers the willingness of regulators to mandate smart metering deployment and for utilities to invest. The questions persist despite the fact that well over 150 successful pilots involving smart meters have now been carried out globally. The challenge lies in the fact that utilities and regulators do not have easy access to comparative data demonstrating the results of a large number of pilots. They only see the results of one pilot at a time and as any individual pilot leave many questions unanswered, overall trust in the technology remains an issue.
VaasaETT has researched over 140 Demand Response Programmes, 200 smart grid programmes and large numbers of smart billing and smart home programmes and implementations, and probably the CLEAREST findings of all from this research are that:
“IT IS NOT WHAT YOU DO BUT THE WAY THAT YOU DO IT”
and ALSO that:
“COMMUNICATION, INTERACTION AND MOTIVATION MATTER MORE THAN TECHNOLOGY”
Applying insights from behavioural science to customer engagement around energy has led to SCALABLE, RELIABLE and COST-EFFECTIVE energy efficiency. Examples have been seen around the world, including for instance in Denmark, Australia and of course the USA, EXAMPLES where the ROLE OF TECHNOLOGY IS MINIMAL.
By having such a large pool of pilots, we were able to go deeper than any other similar types of research projects
So clearly, customer engagement made the difference between an outstanding pilot and a good one (education, feedback
The findings of Empower Demand 1 demonstrate that technology provides an important but
enabling function in creating a successful demand side program. It is one of five factors which
decide success:
1. Socioeconomic factors
2. Participant consumption patterns
3. Program content/structure
4. Supportive technology
5. Household load sources.
In this, socioeconomic factors and consumption patterns can overcome supportive technology
and program type. For example, a good informative billing pilot can lead to higher savings
than an IHD pilot depending on surrounding circumstances despite the fact that on average an
IHD is 50% more effective than an informative bill at reducing overall electricity consumption.
Therefore one of the main findings of Empower Demand 1 was that consumer engagement,
through technology and through information is at the heart of a successful Smart Meter
enabled program. A main conclusion of the work was that this factor should be explored in
more depth.
VaasaETT has researched over 140 Demand Response Programmes, 200 smart grid programmes and large numbers of smart billing and smart home programmes and implementations, and probably the CLEAREST findings of all from this research are that:
“IT IS NOT WHAT YOU DO BUT THE WAY THAT YOU DO IT”
and ALSO that:
“COMMUNICATION, INTERACTION AND MOTIVATION MATTER MORE THAN TECHNOLOGY”
Applying insights from behavioural science to customer engagement around energy has led to SCALABLE, RELIABLE and COST-EFFECTIVE energy efficiency. Examples have been seen around the world, including for instance in Denmark, Australia and of course the USA, EXAMPLES where the ROLE OF TECHNOLOGY IS MINIMAL.
Best programs get to know their customers beyond what large appliances are in their house in order to target messages that are interesting to them
2009 - ongoing
Over 71,000 at the end of 2012
Web portal, personalized tips and feedback
Average consumption reduction: 17%
Segmentation based on actor characteristics (age, education, attitudes and values), characteristics of the social environment (family size, behaviour of friends)
Different customers will respond to different incentives, different messages, prefer different channels of communication
actor characteristics (age, education but also attitudes and values), characteristics of the social environment (family size, behaviour of friends), and characteristics of the physical environment (size of house, number of appliances).
Best programs raise awareness, get customers’ interest and engage customers prior to pilot commencement
2009 - 2012
16,000 household participants
IHDs, ToU tariffs, DSM, PV, Solar water heaters
Average consumption reduction: 1.5% (IHD) – 40.7% (PV)
Peak clipping: 5% (IHD + TOU) - 25% (automated AC)
Create awareness of the Perth Solar City program
• Build general knowledge of the products and services being offered under the program
(without elevating one product/service or consortium member above another), and
• Create excitement and a sense of ‘collective impact’ about its benefits to households
and the community to encourage participation.
Measurement 2011 2010
Program awareness – level of awareness when prompted 41%
Program recognition – level of awareness of the Program name 73%
Program satisfaction – level of customer satisfaction 81%
Too often do we think it comes naturally when in fact people’s knowledge of their consumption is minimal at the start of a programme
How to take advantage from information on energy consumption or dynamic pricing is not obvious
Impact: Overall, participant to TOU pilots who were not properly “educated” as to how to benefit the most from TOU prices did not save electricity. Those who were saved 4%
In TOU, reductions at peak hours were 50% higher when they were “educated”
In CPP/CPR pilots, reductions at critical peak hours were 23% higher
More channels the better
Summer 2010
3,000 households
Dynamic tariffs, IHD, web portal and mobile app
Average savings of $157 compared to standard rate plan
Peak clipping: 6% - 16% (excluding automation of appliances
Too often, dynamic pricing pilots are considered on their own
Impact: Overall, participant to TOU pilots who were not provided with feedback did not save electricity. Those who were saved 4%
Reduction at peak hours is 40% higher when participants are provided with feedbacks
Introducing complexity, step by step
Ongoing
2,500 household participants to date
ToU, IHD, Web portal and mobile application
Consumer knowledge when starting a program is low, however this changes and knowledge increases over time. Full scale packages need not be offered at first. Services and complexity may be added step by step or added to a basic package
As the current level of knowledge and awareness regarding electricity of the potential participants to Enel Info+ is quite poor, a step by step approach for their involvement in the project has been chosen. At the beginning they only receive Smart Info Display, that is they are equipped with the simplest feedback means. This choice is expected to incline end users towards the subject matter avoiding their rejection of the kit as “too difficult”. After a few months their kit are gradually upgraded to provide them with an increased complexity and value. A web portal (www.enelinfopiu.it) has been designed to provide general information about the project and technical support to the experimenters (who can also refer to a dedicated help desk).
Insights not data, personal actionable insights
Paper by Davis, M. (2011)
771,000 households
Paper-based consumption reports
Average consumption reduction: 1.8%
Complexity is in the technology not for the customer, sense of empowerement, create a win win situation
Ability to pre-program devices to automatically respond to variable prices
“Set it and forget it”
Initiated in 2000 - ongoing
11,000 customers
CPP, ToU tariffs, smart thermostat
Average energy reduction = 22% during high price period (TOU)
Average energy reduction = 41% during critical period (CPP)
Not all consumers need to have all the latest most advanced programs
It is not necessary to provide all services to all customers in a market if only a few will benefit and/or are willing to pay