Last week was a very interesting week in the UK media, which points an important lesson to those in Government who believe that it’s easy to get people to change behaviour and reduce their energy consumption. It also resulted in my digging out some interesting statistics about the value of smart metering and how we can most effectively reduce CO2 emissions.
Fifty Shades of Tariff
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There’s nothing that better illustrates the sado-masochistic relationship between energy suppliers and their customers than Tariffs. They’ve evolved to be the whip that utilities deploy to beat their users into “correcting” their behaviour. That form of correction may be trying to limit the total amount of energy you use, or changing when you use it. But there’s a clear message coming through – energy suppliers want to be in control of the relationship.
It’s a concept that consumers have a problem with. Survey after survey reports the message that consumers don’t understand tariffs. They don’t even understand the word. And regulators are often less than happy with multiple or complex tariffs, because they’re aware how much they confuse people. That was highlighted in the UK earlier this year when the regulator OFGEM took the paddle to the utilities to persuade them to reduce the hundreds of tariffs in the UK to a few simple ones. But that doesn’t stop utilities fantasising about a future where they can run riot with tariffs. The most extreme example is now being constructed in the UK as part of the British smart metering specifications. These allow a level of complexity that makes the most diabolic tortures devised by the Inquisition look simple. Fighting the consumer interest corner is our Energy regulator – OFGEM, which is about to give up on persuasion and start meting out some punishment itself.
There are some valid reasons for considering complex tariffs, but these need to include consumer engagement as a fundamental feature of their development. What is happening instead, particularly in theUK, is that tariffing structures are being developed as a technical exercise. They are now so complex that they threaten the interoperability, cost and usability of the British smart metering roll-out, setting smart metering up to be the next major UK Government IT disaster.
The Smart Gasman Cometh – a Smart Metering Song
It’s almost exactly fifty years since Flanders and Swann wrote their classic comic song “The Gasman Cometh”. With the advent of smart metering it seemed an appropriate time to update it, and give all those involved in smart metering something to sing at their Christmas parties. I’d also recommend singing it whilst reading DECC’s First Annual Progress Report on the Roll-out of Smart Meters. It has the advantage of being considerably shorter.
Twas on a Monday morning,
The gasman came to call.
My meter wouldn’t work,
It wasn’t being smart at all.
He put another meter in,
It took him several hours.
But it couldn’t send a reading, as the comms hub wasn’t powered!
Oh, it all makes work,
For the working man to do!
Smart Meters could have saved US from Sandy
Following the disruption caused by hurricane Sandy, Smart Metering proponents have been quick to point out how a more widespread deployment could have prevented many of the problems seen in New York and New Jersey. Utilities in Texas and California reported that within their regions where there was close to 100% smart meter deployment, they’d not experienced a single example of power outage or flooding. And smart meter manufacturers added that the outage reporting capability of their meters would have saved vast amounts of time and money for the East Coast utilities. “Instead of having hundreds of staff watching CNN and following twitter feeds to find out where power had gone down, utility executives could have just checked on their iPhones” said one industry spokesman.
These benefits were echoed by smart thermostat manufacturers, claiming that the wireless networks in their devices could have been reconfigured to provide a local wireless mesh, enabling peer-to-peer communications within affected communities, as well as being used for in-home geo-location, aiding local emergency services. “Our thermostats don’t just look over your climate control”, one executive commented, “they can even look after Granny and your pets in situations like this”.
Posh Boys push Smart Meters
DECC – the Government department leading the Smart Metering deployment in the UK recently published their latest research on consumer attitudes to Smart Metering. It reports the results of in depth interviews with 120 representative members of the population on their feelings about Smart Meters and IHDs.
The research was conducted in February this year, several months before the Conservative backbencher Nadine Dorries described her Prime Minister David Cameron and Chancellor of the Exchequer George Osborne as “two posh boys who don’t know the price of a pint of milk”. She wasn’t referring to the UK Smart Metering programme, but it was a pretty good description of what these 120 respondents thought of the smart meter deployment, telling researchers that it “sounds like it’s from someone who doesn’t have trouble paying their bills”.
The report is not all bad news. The respondents included people who had received In Home Energy Displays and in general they liked them. They thought they provided real benefits. In contrast, they had difficulty in seeing what the added value of the smart meter was.
I suspect DECC is busy trying to massage the results to make it look as if the survey supported smart metering, helped by some rather ambiguous leading questions. But the content highlights a growing division within the smart metering programme, which is whether it is meant to be there for the benefit of consumers or for the benefit of utilities?
Switching and the Smart Energy Market
Back in 1776 Adam Smith made the observation that England is a Nation of Shopkeepers (although Napoleon usually gets the credit for the phrase). If either were alive today they’d probably reconsider and point out that we’re now a nation of Switchers. Nowhere is that more true than our attitude towards energy suppliers. According to OFGEM, over 76% of us have switched our energy supplier in the last ten years. Around 26% of us do it every year.
For some reason, we love switching. Our favourite TV adverts are for comparison sites. One – the advert for Compare the Market uses a family of animated meerkats which have become so popular they’ve spawned a range of merchandise. Whether it’s insurance, energy, mobile phone plans, broadband or saving plans, we’re addicted. And nowhere more so than with switching energy provider.
It’s not just the websites urging us to do that. Government ministers keep on telling us that to get the best energy price we should switch suppliers. Their message is not to use less energy – just change supplier. And part of their plan for smart metering is to make it even easier to switch – as often as once a day. It’s creating a very interesting dynamic for the industry, but one that is about to change.