By smartgrider In Advanced Metering Infrastructure, Case study Posted 2014-07-12

IRELAND

IRELAND

Smart Meter Pilot – Customer Behaviour Trial

In 2009, over 6,000 smart meters were deployed in homes and businesses throughout Ireland as part of a national pilot to determine the most cost beneficial and effective way of achieving a full scale national smart metering rollout. This one year pilot led to the decision to proceed with a nation-wide roll-out of AMI from 2015-2019.

The primary focus of the pilot was on the response of consumers to smart meter specific energy efficiency measures with a view to measuring the impact on their energy consumption. The pilot was lead by the Commission for Energy Regulation (CER), the independent body responsible for overseeing the regulation of Ireland’s electricity and gas sectors in Ireland. The CER established a steering and a working group for the project comprising of representatives from the Department of Communications, Energy and Natural Resources (DCENR), Sustainable Energy Authority of Ireland (SEAI), the Northern Ireland Authority for Utility Regulation (NIAUR) and Irish Gas and Electricity Industry Participants.

For the customer behaviour trial, 5,375 residential electricity customers were recruited and smart meters were installed in their dwellings. A further 700 meters were installed in small businesses and commercial enterprises. The purpose of the trial was to measure the effect of smart meters, in conjunction with TOU tariffs and informational stimuli (detailed bills, in-home displays etc) on participant’s consumption behaviour.

 

Objectives & Benefits

Smart meters can facilitate energy efficiency by empowering consumers with more detailed, accurate and timely information regarding their energy consumption and costs, thus helping consumers reduce any unnecessary energy usage and shift any discretionary electricity usage away from peak consumption times. The goal of the customer behaviour trial was to ascertain the potential for smart meter enabled, energy efficiency initiatives to drive behavioural changes that would, in turn, reduce or shift peak electricity demand and reduce overall electricity consumption. Specifically, the aim of the behavioural trial was to determine:

• if smart meters could achieve an overall reduction in electricity / energy consumption
• if TOU tariffs could cause peak shifting (i.e. causing load to shift away from peak times), and if some of this load shift resulted in lower consumption, and,
• the effect of various informational stimuli, in conjunction with TOU tariffs.

 

Use Case description

Profile of Participants

A key requirement of the trial was that the outcome would be statistically robust and representative of the national population. To achieve this, a phased recruitment process was implemented. Participant selection and recruitment followed a voluntary “opt-in” model using a tear off slip and achieved an average response rate of 30%. After each phase the respondents who opted in were profiled to confirm that they were representative of the national profile.

Customer research

During the trial, a number of focus groups were conducted to explore different aspects of the trial design with relevant consumer groups. The trial sought to incorporate consumer feedback for critical consumer impacting decisions during the project. The objective of enlisting consumer support at these stages was to ensure the efficient deployment of communications (letters of invitation, allocation etc), ToU tariffs and DSM stimuli that would be understood from a consumer perspective. Those selected for participation in the qualitative research were selected to mirror the usage and socio-economic attributes of the trial participants.

In order to explore how consumer behaviour changed as a result of the trial and to collect feedback on the participant’s experience and the impact of the trial on their engagement and interest in energy, it was necessary to collect and analyse experiential, behavioural and attitudinal data from the participants of the test and control groups. This data was collected in two surveys: one at the start of the pilot and one at the end of the pilot. Participants were required to take part in these surveys as part of their involvement in the trial and consequently the level of participation was high (79% of households which were part of the trial completed the pretrial survey; 80% of households which had completed the pre-trial survey also completed the post-trial survey).

Design and description of Stimuli

Four different sets of tariffs (each with day, night and peak rates) and 4 associated stimuli (monthly and bi-monthly detailed bills, in-home displays and an overall load reduction reward) were designed for use in the residential trial. The tariffs varied from modest to more onerous (e.g. from 20 cents to 38 cents for peak rate) with commensurate off-peak and night rates, but all were designed to be neutral in comparison with the standard tariff. This was to ensure that the “average” participant who did not alter their electricity consumption pattern was not penalised financially and to reflect the underlying cost of energy transmission, distribution, generation and supply as per standard tariffs.

Like the tariffs, the DSM stimuli in the Customer Behaviour Trial (the energy usage statement, the electricity monitor and the overall load reduction incentive) were designed specifically for the Trial using learnings from other international trials and extensive consumer feedback.

Figure 2: Customer fridge magnet explaining Time-of-Use time bands

During the Trial all participants in the stimulus test groups received a bill, combined with an energy usage statement. The first page presented the bill, was similar to the existing supplier’s bill, with additional lines for time of use (TOU) tariffs. The second page (the energy usage statement) provided additional detail on usage and supplied tips on energy reduction. The majority of participants received this energy statement on a twice monthly basis. One grouping however received the statement monthly to test for the effect of frequency.

The electricity monitor, or in-home display, was designed and developed specifically for the Customer Behaviour Trial. Its aim was to help consumers be more energy efficient by providing additional information on how much electricity they were using and how much it was costing them. The electricity monitor also included a budget setting mechanism, where consumers could decide the maximum they wanted to spend on electricity per day. A usage bar on the home screen showed consumers their usage against their daily budget. (Prior to deployment of the electricity monitor, the historical daily consumption of each participant was calculated and converted to a monetary value based on the new tariffs.)

Participants also received supporting information in the form of a fridge magnet and sticker. The fridge magnet outlined the different time bands and cost per band, customized for each tariff group.

Details of Trial

In July 2009 a 6 month baseline/ benchmark data collection period began. This was to give an indication of “normal” customer behaviour over a demi-seasonal cycle. All meters had been installed prior to the start of the benchmark period. Data was collected on a half-hourly basis from meters during this period in order to establish a benchmark level of use for participants.

Towards the end of the Benchmark period, participants were allocated to either a test or control group. There were 16 “test cells” (i.e. a tariff / stimuli combination). The allocation to a particular tariff and stimulus set was on the basis of profiling of participants across all available survey and usage data. The set of participants allocated to each cell was similar to the allocation in every other cell.

The behavioural stimulus trials commenced at the beginning of 2010 and ran for the full year. During the test period, participants were in either a test group or the control group. The control group were billed on their existing flat rate tariff and were provided with no DSM stimuli and their normal 1-page bill. Participants in the test groups received a bill, combined with an energy usage statement. Some of the groups also tested an electricity monitor or an overall load reduction incentive.

 

Current Status & Results

The customer behaviour trial found that smart meters in conjunction with TOU tariffs and informational aids (e.g. in home displays, detailed energy statements) deliver an overall reduction consumption of 2.5% and a reduction in consumption at peak times of 8.8%. These results are statistically significant at the 90% confidence level.

The study found that TOU tariffs are effective in both reducing and shifting consumption. The fact that there are different prices at different times, and not the actual price differentials themselves, was found to be the cause for the change in behaviour. Whereas all TOU tariffs tested delivered reductions, the trial found no statistical difference between a TOU tariff that had a peak time cost of €0.20 (42% higher than the day cost) versus one that had a peak time cost of €0.38 (300% higher than the day cost).

With regards to consumer information, the participants who had an In-home display were able to reduce their consumption by 3.2% overall and by 11.3% at peak times. Monthly detailed information statements also delivered significant reductions at 2.7% and 8.4% respectively.

The results of the trial fed into a cost benefit analysis carried out by the Economic and Social Research Institute (ESRI). The ESRI analysed 12 main national electricity smart metering rollout scenarios and found that the estimated total net present values (NPVs) were generally positive, and often substantially so. It was also found that were the results to be borne out in an actual deployment of smart metering, the project would bring about substantial net benefits for Ireland in comparison with the base case (counterfactual) scenario.

In July 2012, the CER published the decision that there will be a national smart meter rollout. Work is currently being carried out on the High Level Design phase. A partial rollout or test deployment of around 10,000 to 20,000 smart meters is scheduled to begin in Quarter 2, 2015. Pending the success of this, the full nationwide rollout is scheduled to begin in Quarter 1, 2016 with a completion date of Quarter 2, 2019.

Figure 3: Consumption Reduction by TOU over 24 hours

 

Lessons Learned & Best Practices

Customer Engagement Customer engagement at the design stages is vital for later acceptance. When communicating to the customer in the initial stages of a planning, it is important to highlight the role of the smart meter as an enabler of individual understanding and control and emphasising the opportunity for the consumers to reduce their bill.

Consumers tend to understand the basic concepts of a TOU tariff and the concept will be welcomed in general. This is because TOU tariffs are perceived as giving greater control to the consumer and it is expected that ‘electricity packages’ to suit their needs will be offered. However, consumers often do not have an awareness of how and when they actually consume their energy. For example they tend to overestimate the amount of energy they use at peak times and underestimate the amount they use in off peak and at night time in particular.

Communications dealing with TOU tariffs should illustrate how shifting non essential loads to off-peak times can provide an additional way to save money aside from reducing consumption. Explanations of the likely impact of current use patterns were effective, with messages such as “with your level of peak usage, your bill would increase by 10% if you did not reduce your usage during the two peak hours a day.”

Related to this, consumers may have difficulty in accurately estimating their actual cost reductions and tend to have exaggerated expectations of savings (and similarly exaggerated expectations of consequences). 40% of participants in the trial who believed that they had reduced their usage felt that reduction in the bill was not to the degree expected.

Simple information can also be effective. The fridge magnet and stickers supplied to all participants in the electricity Customer Behaviour Trial achieved 80% recall with 75% finding the magnet useful and 63% finding the sticker useful.

 

Project Details

• Overall Reduction:   2.5% (3.2% with IHD)
• Peak reduction:   8.8% (11.3% with IHD)
• Net Present Value:  €174 million (if implemented)
• CO2 Reduction:  150,000 Tons per year (if implemented)

Key Regulations, Legislation & Guidelines

The full details on Ireland’s Smart Meter trial and rollout can be found here on the CER website:
http://www.cer.ie/en/electricity-retail-market-current-consultations.aspx?article=04f4f85c-fba0-44df-a07f-64e6ff2136e3

Smart Meters and Smart Grid play a key role in enabling Ireland’s commitment to a 20% energy savings target in 2020.
http://www.dcenr.gov.ie/energy/energy+efficiency+and+affordability+division/national+energy+efficiency+action+plan.htm

Ireland has published a Smart Grid Roadmap:
http://www.seai.ie/Publications/SEAI_Roadmaps/

 

Ireland’s Smart Grid Policy

Smart Ireland recognises that for its economy to become carbon neutral by 2050 it must create an energy system built on wind and other renewables, using a smart grid and integrated into a clean EU energy system. Ireland has a small and relatively isolated grid that is already integrating high levels of non-synchronous generation (predominantly wind). This has spurred the deployment of aspects of the smart grid.

There is a supportive regulatory regime which is generally open to investment in smart grid deployment and appropriate R&D activities. Ireland has published a Smart Grid roadmap which identifies a number of measures required for the successful implementation of a Smart Grid. These include developing market structures and policies that encourage: increasing electrification of potentially flexible loads (residential and commercial space heating and cooling and water heating), demand side management, and deployment of technologies that provide greater system flexibility such as energy storage, distributed generation and load aggregators. This in turn will require equipment, control systems and communications networks to operate on harmonised protocols.

The national smart meter rollout, scheduled to be completed by early 2019, is a key requirement of the roadmap as this will enable real time monitoring of the system at the low voltage network level which will allow the participation in the market of distributed generation and virtual power plants. In addition, it will allow electricity suppliers to offer pricing packages that provide customers with options and incentives to manage their electricity usage and costs. This increased level of customer participation is essential as it is this which creates the opportunity to shift electricity consumption to periods where variable renewable energy is available.

※ Information in this case was provided by the Sustainable Energy Authority of Ireland.