Monthly Archives: April 2016

‘Public interest’ use of household smart meter energy data

Sustainability First launched a short ‘research challenge’ last year, together with the Centre for Sustainable Energy in Bristol and the academic network, TEDDINET.  We asked two university researchers – Simon Elam from UCL and Jess Britton from Exeter University- to look at the ‘public interest’ agenda for smart meter data.

Most current thinking about smart data is focused on commercial innovation by energy companies and others – but we may miss an opportunity. For the first time, in every home, accurate time-related energy-use data will be recorded at the meter (half-hourly for electricity and daily for gas).  Smart meter data could clearly serve a wider ‘public interest’ agenda in many helpful ways. But, with much effort rightly being devoted to getting the smart-meter roll-out ‘right’, a wider public benefit dimension does not currently get the attention it deserves.  That is why we launched our challenge.

We have now published the excellent papers that Simon and Jess have written.  Here is a taster of their findings.

What might an improved energy usage evidence base deliver for different actors?

  • Better targeted advice – nationally, locally – for consumers & households.
  • For government: improvements to energy models and demand-side inputs, to evidence-based energy policy; to better targeted interventions. Better evaluation of outcomes: for the fuel poor, for energy efficiency, heat, self-generation, including the distributional impacts of policy.
  • For energy companies, networks and regulators: better-targeted investment for smart grid and smart energy systems and community energy projects.
  • For cities: better evidence to support local energy schemes, to target energy efficiency, to plan and develop infrastructure for electric cars, for heat, for housing development.
  • Better-targeted local services for the elderly, the fuel poor, young families, students; and better-informed partnerships – with social landlords, the health agencies.
  • Better insights from academic research and the not-for-profit sector.

Today’s official data for energy consumption remains fairly basic, being derived from customers’ anonymised annual consumption figures. Local-level data, and some limited half-hourly data from trials, is also available. Today’s annual consumption data can also link to other data sets: for example, on the housing stock, demographic or deprivation data.

But for the future, half-hourly energy-use data offers significant new analytical power in terms of the public interest uses touched on above.

So what issues would gaining access to this data raise?  Success of the smart meter roll-out depends – critically – on customer trust.  For this reason, the Government has rightly given a great deal of attention to deciding who can access smart meter data and how.  The Data Access and Privacy Framework  puts the consumer in control of their data.  For example, energy suppliers are entitled to use one-month aggregate data for billing, but, if the supplier wants to access half-hourly data stored on the meter, their customer must give an explicit ‘opt-in’ consent.

Others can also access smart meter data, but likewise with individual customer ‘opt-in’ consent.  Organisations who may wish to use this data for wider ‘public benefit’ analysis may need quite sophisticated systems and be well-resourced, if they are to be able to meet the requirements to be a ‘trusted’ data-user with the Data Communications Company and to manage the process of obtaining individual customer consents. For those without a direct interface with energy-customers already, this might prove quite a big step.

These challenges for making use of smart meter data for ‘public interest’ purposes are not insuperable.  But customer trust in the smart meter roll out is essential and it is right that the privacy hurdle is set high.  Equally, the wider public policy benefits from the use of smart meter data could well be significant.  The opportunity is there. Much could be done with data aggregated to a level that ensures customer privacy.  We hope that our roundtable held in mid-March made a good start in raising the importance of harnessing smart meter data to develop better public policy. This is a conversation we will wish to continue, not least to help inform  the 2018 review of the privacy rule-set.

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Trust: on tap and down the pipes and wires?

It’s an old adage that trust is hard won and easily lost.  But what does this mean in the energy and water sectors?  Sustainability First’s lead associate on the New-Pin project, Sharon Darcy, summarises a major new policy paper and the Network’s February workshop on trust and confidence in energy and water.

Trust is a relational concept.   Based on an assessment of ability, motivation and integrity, it is built up over time.  It is not something mechanistic or transactional that can be dictated or reset at the behest of a single actor. In energy & water, trust is built on a complex web of dynamic relationships between consumers / the public, companies, investors, government and regulators.  There are strong inter-dependencies here.  Problems with trust in one area can have knock-on impacts on trust in the ‘system,’ creating a context where confidence can easily be undermined.

Trust can mean different things to different stakeholders. To have trust in energy and water companies, consumers generally want quality and resilient services and value for money; getting these right first time is important.  Given the long-term social and environmental impacts the sectors can have, the wider public may also expect a voice in these services and the systems that they are part of.

People understand that problems with services can sometimes happen. How companies and others respond to events is key.   Being proactive, open and honest in the face of unplanned disruptions, for example, can actually build trust between companies and customers.

If service providers handle these things badly, however, the public may take a greater interest in ‘aggravator’ factors such as lack of choice or poor market behaviour.  Whilst competition can help build confidence by putting a downward pressure on costs, the complex disaggregated value chains in energy retail markets, for example – and different views on profits and costs – can erode trust.

Downward spirals of trust can occur, particularly if regulators are not seen as standing up for customers through prompt enforcement action.  Questions about the legitimacy of regulatory frameworks may follow.  In this context, negative media coverage of issues around services can quickly translate into concerns around wider issues of ‘fair play’ such as corporate tax arrangements, executive remuneration or company ownership; the resulting political risk increasing market instability and reducing investor confidence.  If the costs of borrowing go up as a result, and long-term investors see the sectors as less attractive, it can make the task of delivering value for money services all the more challenging.

Faced with such a prospect, what can be done to ensure that energy and water services are judged trustworthy?  An essential first step is for companies to own their own problems – through engaging with stakeholders so that they can deliver the outcomes that consumers and the public want.

Individual companies – plus the sectors as a whole – showing leadership, through a strong ethical culture and long-run vision, can help create upward spirals of trust.  Companies proactively sharing information and collaborating with regulators and other stakeholders can add to the positive. Clear long-term narratives and consistent signals and behaviours from regulators and government can also help, establishing an environment that is attractive to responsible investors and where innovation can flourish.

There are no silver bullets here.  An holistic and coherent approach is needed by all stakeholders if trust is to be built and maintained.  Getting the right processes in place in the round is crucial if confidence is to be sustained.