Energy Management: 2015

kWIQly at EMEX Excel London Nov. 2015

Dear All

If you happen to be attending EMEX at Excel London tomorrow or Thursday 10th , 11th November - drop me a line via the networking app or email me.

More importantly do attend:
Theatre 2 Utility and Energy Services stream
Wednesday 15:45-16:00

My colleague George Catto will be giving a practical llustrated talk

'Find the hidden “DNA” in your AMR data'

The talk will include real world examples taken from AMR-DNA

For anyone who still questions the value of Smart Meters or AMR this will be a clarion call.

George will not only highlight benefits for energy managers, but will make it obvious how utilities can help their clients, improve engagement and deliver bottom line benefits through differentiation of their service offerings.

AMR-DNA is the tool Energy Assets PLC [LSE: EAS.L] built on top of the kWIQly energy waste search engine.

You will be able to find George on Wednesday or Thursday at stand F 12

Bogus claims for energy saving products (commentary)

Vilnis Vesma recently wrote a detailed discussion on how energy fraudsters may trick their audience in his article: Twelve hallmarks of bogus claims for energy-saving products

Opinion : Vilnis is amongst the elite of commentators on effective energy management.

I agree with almost all he has written but felt some key points were worth emphasizing or expanding upon, or simply interesting - hence this post.

Disclosure: I attended the same college as Vilnis and have occasional non-commercial contact with him. He has not solicited nor endorse this response to his work.

Vilnis writes :

1. Failure to adhere to the known laws of science ...

The term ‘boiler’ is a misnomer because the water in contact with the heat transfer surfaces remains liquid. Were steam bubbles ever to form because of localized overheating or inadequate water flow you would get popping and clanging noises (“kettling”) caused by detached steam bubbles condensing and collapsing abruptly in the water away from the surface.

But we have to be careful with "The Laws of Science" and our understanding of "The Laws of Science" bearing in mind that certainly I (and I am sure Vilnis) would admit to really understanding a very few of the "Laws of Science"

So lets take a really simple example (and one that relates to Vilnis' film of steam that reduces heat transfer.

Can water flow uphill (of its own accord) ?

I would have to say yes - if pushed! (so try to stay aware of your own limitations)

There is a fascinating phenoemenon (and worth a few fun minutes of your time) called the Leidenfrost effect. It is brilliantly explained here which shows after a minute of explanation how water can actually navigate a maze... (and yes flow uphill)

Vilnis mentions:

2. Implausible percentage savings claims: more than anything, it is claims for savings of 20% or more which prompt people to become suspicious and contact me for my opinion. The problem is that some established technologies do achieve that (and more), so what is really at issue is the nagging question “if this is so good, why isn’t it fitted everywhere?”. Taken on its own, this is not evidence enough, although it is sometimes possible to show from engineering calculations that a claim is unlikely to be feasible. I return to this theme later but the enemy are not all stupid and there is a new breed smart enough to make a subtler pitch. Nobody would think a claim for six percent was suspicious.

I would simply note that we must distinguish efficiency and effectiveness. A car left running at the kerbside (with no driver) may be a tempting target for a crook. But consider that the effect of burning a litre of fuel is the same whether the car is a Formula 1 monster or an "economical" runabout for a house husband to do a little shopping. In short this sort of energy use isn't going anywhere. Since neither achieves anything (except helping warm the car on a cold morning) the use of energy is exactly equally wasteful. The rate of waste may be different, and the smaller car is more economical in use. By switching off the engine (when there is no intent to travel) we see 100% savings ! This emphasizes that savings "in normal use" is generally the right benchmark for the energy manager. Again this re-enforces getting the right sized power plant for the job, so over-sizing almost inevitably leads to waste.

Vilnis overlooks (to a pedant) the "inspection or 'regression to the mean' fraud" when considering installation. See also "Guess the sex of your child fraud"

3. Extreme ease of installation: it has to be just a simple additive, bolt-on, or electrical connection for two reasons. Firstly the salesman needs to put as few obstacles in your way as possible. Secondly it needs to be cheap for him to install and easy to remove (or abandon) when a diligent customer discovers it does not work.

The easiest way of achieving energy savings in half of the sites that you visit is to "wave a wand" chant some incantations perhaps (chanting is all you can do with them) and do nothing else. The cost and time to fit and remove is zero.

Absolutely nothing in the mechanical world operates without change. Performance hovers around average performance so ( absent a catastrophic or steady deteriorating tendency) if you compare any two periods for one system, half improve and half deteriorate. The fraud works as follows:

I will guess the sex of your unborn child for $1000 - If I get it wrong I will refund $1500 - so you cant lose !

Explanation - Clearly I add no value if I always guess with the assistance of a fair coin toss - but I will be right half the time (winning $1000) - the rest of the time I may have to refund $500 - On average given a good sample of suckers I cant lose !

The benefit of me being right is zero - exactly equal to the information bought.

By the way if you already know the sex of your child you can make money from the fraudster - if you are smart enough - Do discuss in the comments below if interested !

Just expanding on Vilnis' comments :

5. Analysis based on indirect measurements like reduced running hours: it is not safe to infer that reducing running hours reduces energy consumption. If you turn your heating off for ten minutes in every hour, for example, you will have an intermittent drop in space temperature and each time the heating system runs it will use extra fuel to restore the desired temperature.

Note the energy reduction is during the test period and the extra fuel immediately follows the test period - so by comparing on vs. off test rather than on (for a long duration) vs off test (prior to tests), the test shows savings that are relative to the wrong base.

In fact if a system is under less than 100% load a well "planned" test of this type can always show 100% apparent savings simply by "claiming" the slack in the system. I believe this is probably the biggest standard "clip on boiler sequencer" fraud out there. The parties involved change the name of their company / or operation fast enough that they can make money by duping the buyers while avoiding the law.

Vilnis talks about maintaining minimum temperature:

Remember in this case that heat is flowing out of the building all the time (even when the heating is off) and over the course of a day or a week, all the heat lost must be balanced by heat input, regardless of how intermittently it is supplied. In fact, to maintain the same minimum inside temperature with intermittent heat input, you would use more fuel by having to maintain a higher average.
Similar considerations apply to voltage reduction, in that any reduction in current, while proving a reduction in instantaneous power, does not take running hours into account. A thermostatically-controlled electric heater in particular will run for longer in order to deliver the required quantity of heat, negating any apparent savings inferred from a spot check.

This is 100% correct BUT there are two important related points:

Not all targets are constant - If you need a lower minimum temperature (say overnight) - then the target should always be lowered. Night setback recognises that people sleep lying down - and we lose heat faster standing up (like radiators we are vertically mounted when operational). So not only is our required body temperature lower (slowing metabolism) it also takes cooler conditions to maintain it. In this case eg in residential buildings (OR UNOCCUPIED BUILDINGS) we should always set minimum targets and maximum targets as liberally as possible - to allow the control system to trigger least spend.

This also assumes that say a boiler has efficient temperature modulation (many boilers run on-off using time modulation rather than temperature modulation). In boilers that have pre- and post- firing combustion chamber purges (pressurized rather than atmospheric boilers) a wider control band targeting minimum low return temperatures but firing to higher temperatures to prevent rapid cycling can be an efficiency boon (at times of less than 100% load - ie most of the year)

Vilnis is a little soft on secrets:

6. Secret ingredients or principles of operation: claims based on secrets are by their nature hard to assess in principle, so secrecy is the perfect cloak for trickery. However, if you are looking for a way to deter a persistent salesman, you can use secrecy against them. Just fall back on a health-and-safety argument. Ask for toxicity and materials-compatibility tests on any chemical constituents. And if somebody tries to sell you a magnetic device so powerful that it can affect oil or gas, ask for information about its effects on human tissue and body fluids.

In combination with Patents (a publication allowing reproduction of the benefit -"in theory") secrets do not hold water - patents are not secret - end of discussion.

If salesperson tells me they will use a secret means to help me save energy - they in my estimation almost certainly a charlatan. (It is acceptable for a salesman to admit they do not understand the technical detail of their product - but in this case they should have explanatory literature or technical back up. In general if you do not understand why it works it probably doesn't - so don't buy !

Vilnis on Patents (Note: for my sins I was an Assistant Patent Search Examiner in Europe for a while)

He is right ! -
1) I can think of no energy saving device that is creditable simply because it has a patent.
2) I can think of many that are not.
3) Many truly effective devices are patented - but the patent offers a temporary monopoly protection in exchange for publication - so
a) it is not secret,
b) the patent has no bearing on the efficacy

Vilnis on Social Proof

Vilnis covers testimonials, science, and accreditation and simple social "proof"

1) Your mileage may vary
2) Trust your scepticism - there are several billion people out there to give testimonials (some for hire)
3) Science is a debate - not a conclusion (A Physical Law is still only a tentative conclusion that has stood an extensive test of time - longer that say Biological Evolution Theory (and even more than mere conjecture)
4) Just because a million people believe something does not make it so

Regarding sales tactics - caveat emptor - buyer beware. A great way to stay aware is to follow Vilnis' blog in my opinion.

Verdantix - Industry brief about kWIQly

Who are Verdantix - why would they write about kWIQly?

Verdantix describe themselves:

... an independent research and consulting firm with expertise in EH&S, energy and sustainability markets. Through our research and advisory services we help corporate managers, investors, technology executives and services firm leaders to make robust, fact-based decisions. We are committed to delivering objective, timely and accurate analysis to help our clients succeed.

So why about kWIQly ?

Having named kWIQly as one of nine "Most Exciting Energy Management Companies to Watch in 2015" (free with login) it made sense for them to dive a little deeper as they are all about "delivering objective, timely and accurate analysis".

The result - a new report published yesterday titled New Entrant kWIQly Aims to Curtail Multi-Site SME's Gas Use raises questions I should address:

I won't expose detail as these are objective reports delivered for Verdantix clients, however the summary and contents page are public and "fair game".

Note: Overall I am happy with the report but amazed how some fundamental objective opinions about a subject (and one I should know inside out) can challenge pre-conceptions.

They introduced the energy efficiency market (which anyone reading here knows) and then summarised:

"Verdantix recently spoke with energy management software firm kWIQly’s CEO James Fergusson and Marketing Director George Catto, to hear how the firm plans to service the European SME market. Verdantix finds that kWIQly’s use of virtual audits and predictive maintenance diagnostics positions its solution for the multi-site SME market; however, kWIQly will need a diverse range of partnerships to crack open the market."

Dulcius Ex Asperis (Sweeter after difficulties) is the Ferguson clan motto:

Verdantix picked up fast on the "difficulties" we have faced - that "[we] need a diverse range of partnerships to crack open the market." Their analysis is right on the money...

It takes time to open any market with a transformative technology and the truly massive multi-site SME market represents a signature failure amongst energy management services and energy retailers. Possibly our biggest mistake was trying to do it ourselves!

Fortunately the "diverse range of partnerships" that we are building addresses this (though why it took us so long to figure out what Verdantix saw immediately pains me - I first blogged about it only about a year ago - Conflicts on the Ground that serve no purpose ).

Why energy services companies care

Faced with only on-line energy monitoring portal , companies not primarily focussed on energy, see energy management as a necessary evil. They have neither the time nor skill-set to trawl through reams of data to figure out what matters.

Service providers that want to differentiate themselves and support their client acquisition and retention models want to help out - so in turn we see a set of partners that need our help, are well-funded, and already have huge field sales forces that are delighted to offer something different.

So they need to learn that giving energy viewing portals that show what you are doing (passively) and in hindsight is of very little value.

Rather they should (and now can) pro-actively highlight what clients are doing wrong or more politically correct - identify their "opportunity for improvement". Then they can also support what needs to be done. This differentiates them from commodity sales channels.

Example - This distribution of logistics sites has a few outliers worthy of closer attention
see Red Pill or Blue Pill for an explanation

Finding opportunity for improvement and knowing what to do about it is pre-requisite to the job of any multi-site energy manager.

Verdantix pick up three chief strategic considerations:

Contents
kWIQly Provides Gas Consumption Analytics To Portfolios Of Multi-Site SMEs
kWIQly’s Data-Driven Services Fills A Facilities Management Gap For Multi-Site SMEs
Diverse Industry Partnerships Will Be The Key To kWIQly’s Growth Prospect

I will address them in turn:

Gas Consumption Analytics To Portfolios Of Multi-Site SMEs

I have written before that gas is tougher than electricity to meter and gas use is more complex (you generally see electricity in use but don't see heat, and gas is used before the heat can be distributed - so it is tougher to understand). But it is important to note that you cannot see electricity and gas use in isolation - a very common problem is where heating drives discomfort which is solved by electrically power cooling services. Waste correlates on each side of the coin and the correlation is a red flag !

I would also point out that many of our current engagements are with the very opposite of SMEs - For example we have looked energy data from six European supermarket chains (and the existence of common unobserved causes of waste is quite remarkable).

kWIQly’s Data-Driven Services Fills A Facilities Management Gap For Multi-Site SMEs.

When I wrote Happiness and the SME - lessons for Utilities I was trying to address the fact of the problem in the economic context of Multi-site SMEs (and bigger enterprises) and wrote :

"So SME profitability sensitivity to energy pricing is disproportionately high at times of low economic activity. Also, when as an SME you are not busy, it is one of the few times when you might be motivated to shop around for a better overhead prices. So utility client life-time value (before churn) is in turn strongly influenced by economic growth!"

It is not just the direct economics that are relevant to the energy service provider and their client - it is also the fact that whether it is your job say selling coffee on the high street or trading on wall-street - energy matters a) when you pay for it, b) when you aren't comfortable and c) when you are wrapped up in administering a thousand different supplier contracts.

Energy companies (and FM) are ideally positioned to diversify horizontally - and this is seen in acquisition activity in the marketplace. Additional points of contact make for cross-sales, and better (more helpful) relationships with clients.

Diverse Industry Partnerships Will Be The Key To kWIQly’s Growth Prospects

This for us is the big one ! An energy retailer or an FM can benefit more by working with us than we can charge for the relationship. This is simply because they have more invested in differentiating product and service offerings than we do, they have less time to study technical niches where specialist suppliers are strong, and are necessarily conservative because overhead kills commodity businesses!

In the next few weeks we will be announcing some partnerships that we have established (the ink is not quite dry on a significant one) and we would note that in the UK Energy retailers can now get our support indirectly through the recently launched AMR-DNA tool by Energy Assets plc. (I will be blogging about this separately).

We are particularly interested in establishing partnerships in Holland and Italy at present (where the inherent value in AMR data has been taken seriously so metering roll-out progress s relatively strong - If this is you do get in contact info@kwiqly.com - and we will be in touch.

James

Red Pill or Blue Pill?

Today we will see what taking the red pill might look like from an energy management perspective...

This is your last chance. After this, there is no turning back.

You take the blue pill—the story ends, you wake up in your bed and believe whatever you want to believe.

You take the red pill—you stay in Wonderland, and I show you how deep the rabbit hole goes.

Remember: all I'm offering is the truth.

Nothing more.

Morpheus to Neo, The Matrix

When energy managers make tough choices it often revolves around what they know about and what they must learn.

A metaphor of knowing about an "Inconvenient Truth" and acting on energy waste fits reality well.

So presented with a means to know much more (and add to responsibilities thereby) we can imagine a Neophyte energy manager finding him or herself in a very different world than before they take the pill, bite the bullet, take the plunge or even eat from the Tree of Knowledge.

Imagine two of them side-by-side, each works for a retailer

(yes the data below is real but made anonymous and from two of the top ten UK retailers - by turnover).

They pop their pills, open their eyes (for the first time) and this is what they see:

(One chart above the other to fit the page)

Each coloured speck represents the record of gas consumption for a supermarket somewhere in the UK. Small blue specks that are densely clustered are normal and benign.

BIG RED PILLS are not!

Both energy managers have a few problems to sort out, and because they know how much they are wasting (based on seasonally adjusted precedent) on the y axis, and whether their gas consumption correlates to coldness (for heating) bottom axis (left = heating , right = cooling). They immediately know that some stores are behaving "purposefully", and some "consistently".

So this is the question - Would you want to know which colour your sites are ?

The trouble with information and yes it works for pub chains and utility companies, and schools and coffee shops is that it presents a choice.

Once it is out in the open, there is no putting it back in the box (Pandoras?) -
You can be accountable, or your sites can be held to account and you can either make things better or twiddle your thumbs.

So which will it be :

Please feel free to get in touch if you want some advice

+44(0) 1825 712800 or email

info@kwiqly.com

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