Empower Demand Potential of residential Demand Response and smarter homes: some answers from a mass pilot comparison Christophe Dromacque Market Analyst Smart Power Europe 2011 8 th November 2011 - Copenhagen
Empower Demand
Potential of residential Demand Response and smarter homes: some
answers from a mass pilot comparison
Christophe Dromacque Market Analyst Smart Power Europe 2011 8th November 2011 - Copenhagen
Agenda
Who we are and what we do
Background on residential Demand Response
Design and goal
Overall results
Example of a successful pilot turned into an offering
Conclusions
The Empower Demand project
VaasaETT Global Energy Think Tank Who we are A leading independent strategic think-tank for the Global Energy Industry, based on a highly collaborative network of thousands of senior executives, officials, researchers and other experts.
Our Key Focus Marketing and Competition
Customer Psychology, Behaviour, Loyalty & Value Market Structures, Drivers & Requirements Smart Energy Demand Innovations, New Offerings & Visions
Recent clients include: EDF, Microsoft, Duke Energy, NPower (RWE), ADEME, World Energy Council British Gas, BC Hydro, European Commission, E.ON, Panasonic, Central Research Institute of the Electric Power Industry of Japan, Aurora Energy, Bordgais Energy, Dong, ESMIG, Union Fenosa - Gas Natural, Capgemini, Israel Electric, E-Control, NordREG
Who we are and what we do
VaasaETT Global Energy Think Tank What we do
Public research projects
Collaborative multi-client research
Who we are and what we do
VaasaETT Global Energy Think Tank What we do
Founding member of the Smart Energy Demand Coalition
Exclusive round-tables Business facilitation
Who we are and what we do
Residential Demand Response
Background
By 2020
• 238,000,000 smart meters deployed in Europe
• € 40,000,000,000 investment
• Households will partly foot the bill
Background
Creates many opportunities…
SM/SG
New energy related services and new offers
Lower overall consumption
Lower consumption at peak times
Lower energy bills
Businesses Businesses Customers+Utilities
Background
Creates many opportunities…
SM/SG
New energy related services and new offers
Lower overall consumption
Lower consumption at peak times
Lower energy bills
Businesses Businesses Customers+Utilities
Background
…and raises many questions
• How to achieve this? • By how much? • For how much? • Will customer be interested? • How do different factors
influence customers’ response and interact with one another?
• How to reach different customer groups?
• How can technology help?
Background
Empower Demand research project
Mass pilot comparison
• 100 pilots worldwide
• 460 sample groups
• 450,000+ residential participants
• Over 60% of pilots organized after 2000 and 45% after 2005
• Results measured: peak clipping, electricity conservation and financial savings
Project funded by ESMIG
Empower Demand project
Feedback Pilots
In-house displays
Ambient displays
Website
Informative bills
Empower Demand project
Display, Electricity Smart Metering Customer Behaviour Trials, Ireland
The Energy Orb, PG&E O’POWER
O’POWER
Dynamic Pricing Pilots
Time-Of-Use (TOU)
Critical Peak Pricing (CPP) / Critical Peak Rebate (CPR)
Real Time Pricing (RTP)
Can be combined
Empower Demand project
ePowerment
Home automation systems (if coupled with dynamic pricing and/or feedback)
• From “simple” automation of water boilers controlled by the Utility to full range automation of home appliances coupled with smart thermostats and dynamic electricity prices
Empower Demand project Home Area Network IJENKO
Influence and interaction of key variables on pilot success • Climate/season of peak • Regional differences • Duration of pilots • Automated source of load • Education of participants • Methods of communication for pricing alerts • Frequency of feedback • Feedback channel • Content of feedback • Pricing and feedback combined • Type of feedback • Interaction before and during pilot • Length of peak hour tariffs • Multiple of peak price of base price • Sample size • Pilot uptake rates • Consumption levels • Market competition levels • Capacity issues within Market • Participant segmentation
Empower Demand project
Pure Feedback Pilots Results
Reduction in overall energy consumption (in %)
4 %
6 %
8 %
11 %
0 % 2 % 4 % 6 % 8 % 10 % 12 %
Webpage
Informative Bill
IHD
Ambient Display
Energy Conservation (%)
Empower Demand project
VaasaETT, 2011
Dynamic Pricing Pilots Results
Energy consumption reduction at peak times (in %)
16 %
12 % 12 %
5 %
0 %
2 %
4 %
6 %
8 %
10 %
12 %
14 %
16 %
18 %
Critical Peak Pricing Critical Peak Rebate Real-Time-Pricing Time-Of-Use
Peak
Clip
ping
(%)
Without automation
Empower Demand project
VaasaETT, 2011
The added value of automated sources of load
31 %
20 %
16 %
9 %
16 %
12 %
5 %
12 %
0 %
5 %
10 %
15 %
20 %
25 %
30 %
35 %
Critical Peak Pricing Critical Peak Rebate Time-Of-Use Real-Time-Pricing
Pea
k C
lip
pin
g (%
)
With automation Without automation
Energy consumption reduction at peak times (in %)
+ 100%
+ 61%
+ 215%
Empower Demand project
VaasaETT, 2011
What was automated?
CPP/CPR: Energy consumption reduction at peak times (in %)
The more the better
37 %
34 %
28 %
24 %
0 %
5 %
10 %
15 %
20 %
25 %
30 %
35 %
40 %
Temperature/Water heater/Home
appliances
AC/Home appliances Temperature AC
Pea
k C
lipp
ing
(%)
Automated Load
4 most common cases
Empower Demand project
VaasaETT, 2011
What can successful pilots turn into?
Gulf Power of Florida: Energy Select • Successful pilot conducted in 1991 - 1994
• The company started marketing the program to customers in March 2000
• All major sources of load can be automated (air-conditioning, electric
heating, spa, pool pumps, heat pumps and electric water heater)
• Customer controlled thermostat coupled to TOU and CPP prices. The settings could be programmed directly from the thermostat or from a secured webpage.
• Gulf Power expects approximately 10% to 12% of its residential customers to eventually sign up for the RSVP price structure.
Example of a successful pilot
• Results from summer 2002:
Average energy reduction = 22% during high price period (TOU)
Average energy reduction = 41% during critical period (CPP)
Customer satisfaction = 95%, highest ever for Gulf Power program
Example of a successful pilot
How does that apply to much colder Europe?
CPP/CPR: Energy consumption reduction at peak times (in %)
32 %
15 %
30 %
18 %
0 %
5 %
10 %
15 %
20 %
25 %
30 %
35 %
With automation Without automation With automation Without automation
Summer Winter
Pea
k C
lip
pin
g (%
)
Example of a successful pilot
VaasaETT, 2011
Know your customers
• Different customers will respond to different incentives, different messages, prefer different channels of communication
Factors rarely taken into account PRIOR to pilots:
Participant age, income, education etc…
Participant environment (how many people in the house, are their children?, teenagers?)
Conclusions
Communicate with your customers
• Timely, relevant and appropriate messages lead to successful programs
• Impact: Overall, participant to TOU pilots who were not provided with feedback did not save electricity. Those who were saved 4%
Reduction at peak hours is 40% higher when participants are provided with feedbacks
Conclusions
“Educate” your customers
• How to take advantage from information on energy consumption or dynamic pricing is not obvious • Impact: Overall, participant to TOU pilots who were not properly “educated” as to how to benefit the most from TOU prices did not save electricity. Those who were saved 4% • In TOU, reductions at peak hours were 50% higher when they were “educated” • In CPP/CPR pilots, reductions at critical peak hours were 23% higher
Conclusions
Empower your customers
• No significant differences in results when appliances are controlled by Utilities and when they are controlled by participants. People tend to choose the “thrifty” profile
• If you want to automate every day life appliances; to avoid suspicion and backlash, you have to give your customers control over how and if they want their appliances to respond to peak prices
Conclusions
One step at a time
• Consumer knowledge when starting a program is low,
however this changes and knowledge increases over time. Full scale packages need not be offered at first. Services and complexity may be added step by step or added to a basic package
Conclusions
Create a win-win situation
• It is not necessary to provide all services to all customers in a
market if only a few will benefit and/or are willing to pay
Conclusions
Thank you for your attention!
Christophe Dromacque [email protected] Smart Power Europe 2011
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