Smart-meter enabled innovation non-domestic - Carbon Trust

The Carbon Trust recently contacted us (and a number of other key companies) with the following
 "DECC has asked the Carbon Trust to understand, and report on, what innovations in technology, products and services we can expect to 2020 based on the roll out of smart meters for non-domestic customers.
DECC recommended speaking to you. We intend to interview technology developers, energy service providers, utilities and other stakeholders to understand their (not commercially sensitive) views and then hold a workshop with all stakeholders to problem-solve the question."
So after about a millisecond feeling slightly complimented we agreed to interview and attend the workshop last Friday. Why? - Well to be honest there were three reasons, two good, one questionable - so let me get the questionable one out the way, and then I will go on to the more interesting things ...

Note shift arrow third button down on left
  1. The Carbon Trust has a remarkable coffee machine with a shift key - Really - I kid you not - it modifies your selection and presumably reduces the number of buttons required. This saving comes at the cost of massive user confusion and huge amounts of wasted coffee / energy / carbon - ( to be fair the coffee was pretty good, but an escape or or cntrl-alt-del combination would have been more constructive) 
  2. Networking with UK government (DECC), the official regulator (ofgem) and The Carbon Trust and the bre can only be a good thing, especially when it comes to input on legislation and statutory instruments (Disclosure: Our UK subsidiary has worked with BRE and ofgem on CERT compliance on a commercial basis in the past)
  3. Networking with other attendees, This included representation from energy brokers, energy buying clubs, data consolidators, national utilities, and a small number of specialised consultants in the sustainable / smart field
So I thought, it might be useful to knock together these informal notes. 

There will be a formal feedback to the UK government, and the meeting was held under Chatham house rule so I will not name the commercial attendees (other attendees are a matter of public record). 

I do feel a few significant companies were notable by their absence (hint: buck your ideas up - you know who you are).

The agenda was deliberately loose (more brainstorming than directed) and as often happens several themes kept on re-emerging. So this is a personal, rough (and certainly not exhaustive) recollection of various issues that stuck in my mind - I hope its useful and I would love to hear any views in the comments - perhaps I missed some key things while dwelling on the shift key! :

The title of the workshop was:

Smart-meter enabled innovation for non-domestic customers
This immediately lead into a discussion of scope:

Most non-domestic customers need AMR (automatic meter reading) rather than smart meters (a local display device for readings). Yes, this comes up again and again, and saying "smart" does not make you smart (except in the stinging burning embarrassment sense).

The trouble is with a smart meter, thatwith despite nonsense to the contrary, seeing a consumption dial no more helps you save energy than standing on bathroom scales helps you lose weight.

So the value comes from action engendered by information, not by the existence of a soon ignored omnipresent (and very boring display) of energy data. In discussions with Steven Fawkes (whose blogs Only Eleven Percent is worth a read) earlier in the week I remember discussing "Mean Time to Kitchen Draw" - a fun metric that measure the Billions wasted worldwide on installing things that people soon learn to ignore.

It was agreed that the workshop should distinguish bottom-up, from top-down. The former is the application of household and domestic considerations to the small business market, where the latter is the application of large skill based diagnosis techniques (which apply to some much larger buildings) to the volume market. The vast gap of an un-served market between the two went unquestioned. (Hence, I suppose, the workshop).

The other aspect of scope was regarding purpose - is the purpose of high resolution metering:

  1. To allow purchase of cheaper energy in the market
  2. To enable energy savings

It is worth noting that a more efficient energy market reduces carbon burden, reduces energy security issues (which cause wars - a huge waste of energy), and that energy poverty is very real and meaningful for numerous families and small businesses (not just in the UK.

However, my vote would be for a focus on reduction in demand (perhaps because I have spent most of my career witnessing and diagnosing the ridiculous waste prevalent in society (energy spend that does not even deliver value).
This second priority lead on very nicely to the first agenda point about:

Competition and Switching

  1. Most people will not even bother to switch energy supplier until a threshold of around £75 per annum potential cash benefit is exceeded. This suggests to me that: 
  2. switching requires automation (vastly reduced friction)
  3. market is already relatively efficient (far greater savings can be had from efficiency improvements)
  4. the issues of perpetuating data histories in common formats over a supplier transition are very relevant (this effects both buying and analysis)
  5. There was huge skepticism from the group that the major players can ever be forced to align to common data-interchange formats (both for meter data and account meta-data)
    1. The smaller embedded smart meters store a history (too short for ideal analysis)
    2. AMR services don't make it easy to improve market efficiency - there is major disincentive to ease switching in the market. (I think there is scope for legislation here, but it had better be well considered and not the US green button initiative style half-cocked exercise although this is none-the-less better than nothing !)
Engagement and Energy Efficiency

Whether it is a counsel of despair or not - people don't care enough about energy efficiency, to take personal action. This was unanimously agreed. I would express the problem like this :
Like it or not energy is absurdly cheap - 100 years ago to harness 100 horses and work them for an hour required the riches reserved for royalty - hay needed to be gathered, livery made, and the capital asset cost far exceeded the cost of a family compact car. Now everyone can do this with a couple of litres of fuel, so we are collectively enabled to poison our planet and climate - and hey nobody really cares !

 After thisour discussion wove backwards and forwards around many themes but gradually moved on to:

"Cheap energy club" type services

The key issues here were automation, buyer friction and engagement, and the need to move from buying (which in a commodity market is and should be a race to the bottom with ever declining margins), which is a necessity for an efficient market to overcome oligopoly forces (nobody actually used the word cartel ! )
Other agenda points covered were:

Visualisation and “remote control" & Optimisation were the overwhelming consensus was (correctly) that:

  • visualising an energy spend is very far from saving energy and not sufficient to either inform or motivate action
  • remote control is trivial - there is space for "apps" and connectivity and they will happen, but the business models in this field are extremely naive (the motive to save energy is a pre-requisite to capital investment, and there are better ways of saving energy first) - the problem is determining the action to take
  • nobody came up with a definition of optimisation in this context (it was perhaps aspirational from the briefing - but bottom up optimisations for households are very different from SME in terms of occupancy, fabric, plant, use cases etc - so we moved on)
A brief and pleasant buffet sandwich lunch was provided and we moved on to 

Innovation that “stretches down” from Industry and commerce

Three issues were discussed that (apart from understanding that analysis has a role) are well outside my expert domain - (so I wont comment) - these were
  • Time-of-use and complex tariffs, 
  • Brokers/Third Party Intermediaries, 
  • Load aggregation & virtual power plants

We then moved on to the following areas which are all very closely related, and where I suppose my personal input was of some value. Grouping these together the following key points were made and I believe largely agreed (but I am so sure of my ground in this area that I may not have heard objections ! ;)
Demand Management

Managing is simple. but there are very complex pre-requisites. Energy relates to activity, and activities are

  1. either, waste or not
  2. Conducted (if at all) either effectively, using best resources, or not
Sub-metering & device disaggregation

These are two areas where data is either gathered directly or imputed. The huge potential waste of metering more than can be managed is one major issue - The internet of things is as yet young. The other is whether loads can be identified through pattern recognition (bear in mind that a smart phone with a gyroscope and accelerometer can tell from your gait, your height, your weight and your health)

Remote building performance diagnostics

No surprises here - According to a new Navigant report nicely summarised here 800M will be installed by 2020 and "Between 2012 and 2020 Europe shows the fastest electric smart meter penetration, growing from 15% to 85%."

It is clear that the entire purpose of this vast new industry boils down to one critical question - "What is it for?

Any reader of this blog will have an idea that is is NOT to draw pictures that no-one can understand or act on but that:

  1. It makes automated quantification of waste possible
  2. It allows cause of waste to be diagnosed
  3. Pattern recognition allows this to be done at scale
  4. Diagnosis is a pre-cursor to treatment
In turn, treatment may be :

  • Behavioural advice (pertinent, actionable, on-time)
  • Control parameter change (typically actionable remotely)
  • Control algorithm change (increasingly modifiable without site visits)
  • Hardware maintenance (it is too costly to send the wrong people to do the wrong job)
  • Plant refurbishment (where better decisions can be informed by knowledge of demand histories)

Beyond the current capabilities of pattern recognition - In which case the appropriate expertise should be sent to site:

My conclusions

Overall "Smart-meter enabled innovation for non-domestic customers" is important:

The value is simple, if we can understand and act on energy-efficiency problems at scale for low costs, and if we can regulate demand to service our needs effectively we can live in a semblance of the current luxury we have come to expect - If we do not we cannot !

Please do leave comments below - I will respond and try to incorporate those with merit in future work.

Update : bre have requested that I link to their energy consulting site
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