Smart Energy – Page 3 – Creative Connectivity

FATZ and DECCY – the UK’s cartoon approach to Smart Meters

The UK Government has enlisted two cartoon characters – FATZ and DECCY to explain the need for smart meters to a sceptical public. FATZ – the corpulent blue one, represents the cold, uncaring fat cat executives of the energy industry, eager to take still more of your money, while the manic yellow DECCY represents the seriously scary civil servants of the Department of Energy and Climate Change who have been tasked with dreaming up the world’s most complicated and unworkable smart metering specification. Their bulging eyes and demented smiles tell the average consumer all they need to know about the UK smart metering plan and the mentality of the people behind it.

Claire Maugham, director of communications at Smart Energy GB, who’s responsible for the campaign said: “FATZ and DECCY are embodiments of what we’ve heard about consumers’ experiences about buying gas and electricity. We heard time and time again that people are anxious because they don’t know what they’re spending, they don’t know if they are on the right tariff or with the right supplier. It’s almost like they are out of control, causing chaos around the house like two naughtily children.” So it’s fitting that they’ve chosen utility bosses and DECC employees as models for their chaos and out of control metering specification.

The aim of the campaign is two-fold. Firstly to try and persuade consumers to allow a smart meter to be fitted, secondly to try to convince them they that might save money, not least because if they don’t it exposes the alleged consumer savings trumpeted by DECC as pure fiction, relegating the whole project into another expensive Government IT fiasco. Achieving either of Smart Energy GB’s aims looks increasingly difficult.

A Tale of two Thermostats

Once upon a time there was a start-up in California that thought that the world needed a smarter thermostat. Headed up by some ex-Apple executives, they raised over $80 million for their company and three years later sold it for $3.2 billion. That company is Nest Labs.

Four years before Nest was formed, two experienced technology start-up executives in Cambridge thought that the world would benefit from energy use reduction. Their solution was to design a smart in-home display which showed householders how much energy they were using. They’ve sold almost 1.5 million of these. From that experience they also decided that the world needed a smarter thermostat. Because they had limited funds to complete its development (largely because DECC had constantly delayed the UK smart metering market for their IHDs), they decided to use the crowdfunding site Kickstarter to raise enough to make the first prototypes. They didn’t raise $3.2 billion. They didn’t raise $80 million. They only just scraped together $32,000 before the Kickstarter campaign finished. To put it into perspective, that’s equivalent to the UK retail cost of just 80 of Nest’s smart thermostats. This company is GEO.

I don’t know whether GEO’s smart thermostat – called Cosy, is any better or worse than Nest’s. They both look attractive, competent products from companies that know what they’re doing. GEO’s appears better suited for a Northern European climate, where most energy expenditure goes on heating in winter. Nest’s is probably better for homes with air conditioning as well. But the one hundred thousand times difference between $32k and $3.2 billion that investors are prepared to put into two different smart thermostat companies suggests that certain sectors of the smart thermostat market may be at serious risk of overheating.

The Siren Call of the Negawatt. Justifying Ratepayer Funded Energy Efficiency Schemes

The energy industry has got a new religion – that of the Negawatt. Over the past decade it’s gone from a small following to becoming the new Messiah of capacity planning. It’s one of the few things where utilities and regulators come to worship at the same shrine. In fact they like it so much, they’re happy for an increasing number of consumers to pay for it. The only problem is that like other faith based beliefs, no-one really knows whether it exists or if it delivers what it promises.

If the negawatt is new to you, it’s a very neat scheme. The theory goes that if you can persuade consumers to use less energy, then you need to build fewer new power stations. Each kWh of energy saved is a negawatt (suggesting its name was coined by a marketing person, rather than someone who understood the difference between power and energy). Hence each negawatt achieved means less generating capacity is required to support demand. As power stations are expensive to build and operate, lots of negawatts are an attractive prospect as they represent an effective reduction in the need for new power stations, or the opportunity to put off building them. In other words negawatts mean utilities save money, which should be reflected in lower energy bills for consumers.

As it appears that this is so obviously a win-win concept, regulators have increasingly been willing to support what are called Ratepayer Funded Energy Efficiency Schemes. These allow energy suppliers to increase the cost a user pays for a unit of energy on the condition that the suppliers use this extra revenue to promote energy efficiency schemes which reduce consumption. If that sounds a bit Ponzi-like, it is. But in the short term, if it works, everyone should win. Consumers pay more per unit of electricity, but use less, so save overall. Utilities need to invest less, so future energy price rises should be contained, but the rate increase keeps their profits up. And as less energy is used, CO₂ emissions are reduced, keeping the regulator and Mother Earth happy.

But does it work? In areas where these schemes operate, consumption has gone down, so negawatt proponents claim it’s effective. But energy usage has also gone down elsewhere. Which begs the question of whether we are measuring a real effect or not? Has the siren song of the negawatt befuddled both utilities and regulators, removing their ability to make rational judgements? In the US, billions of dollars are being spent on these schemes, whilst in the UK, DECC has built its justification for smart metering on the same unproven promise of jam tomorrow. So how do we separate belief from reality?

The Green Approach to Energy Theft

I’ve spent the last few days at the Utility Analytics Week conference in Atlanta, where energy companies come together to discuss what they can do with the data they’re beginning to collect from smart meters. Despite the range of interesting and useful things that are possible, the majority of speakers converged on one application – reducing the level of energy theft. Specifically that seemed to mean stopping people stealing electricity to grow marijuana. A speaker from the Canadian supplier BC Hydro even went as far as saying that detecting marijuana growers was the main reason they’d decided to install smart meters.

The reason marijuana growers bypass their meters is that it traditionally takes quite a lot of power to run the growing lights for a loft-full of cannabis plants. Apparently 1,000W agricultural lights are needed for a set of fifteen to twenty plants. And now that the Canadian utilities are cracking down on energy thieves, the illicit trade is moving to the US. Which really got the US utility representatives hot under the collar. There’s nothing that riles a Southern utility manager as much as the knowledge that those pesky Canadians are turning his kids into reefer smoking zombies.

Hence the amount of effort being poured into revenue protection data analytics in an attempt to differentiate a closet pot grower from a faulty transformer. However, I think that by concentrating on theft, the utilities are missing an opportunity.

Green Button – The Damp Squib of Smart Energy

If Google can’t make it work, call in a US Senator. That seems to be the approach to consumer energy engagement in the US, where shortly after the demise of Google PowerMeter, US Chief Technology Officer Aneesh Chopra challenged the energy industry to come up with an analogue of the Blue Button, called the Green Button.

The Blue Button is a good idea. It’s a scheme, pioneered by the VHA, to let patients download their medical records in a standard format, so that they can be shared with doctors, hospitals, emergency responders and other caregivers. It lets patients add personal and insurance information and supports a host of detailed medical data. When it was launched it was with the expectation that it would “improve the quality of patient-clinician interactions”. Over one million members of the VHA now use it, and it’s being adopted by other healthcare organisations in the US because of its success in improving that interaction.

The rather naive hope was that Green Button would do the same for energy, but the analogy quickly breaks down. Whereas most healthcare workers see helping patients as an integral part of their contract, most utilities don’t. Trying to claim any analogy between the Blue Button and the Green Button is really just a bit of sly marketing to try and disguise the fact that most utilities only want to work with their customers if it’s for their own benefit. Utilities don’t sign a Hippocratic oath. The only oaths they utter are those against regulators, the fuel poor, late payers and air conditioning users who don’t sign up to demand response programs.

Potatoes win Prizes – Gamification, Loyalty and Viggle

Over the past few years I’ve been working in the mHealth and smart energy sectors. Both have a common belief, which is that consumers will do things that are in their own interest – namely spend time and effort in order to save themselves money and keep themselves fit.

That mantra has seen a raft of new companies appear in each sector, directly targeting the public with products that attempt to change consumer behaviour or lock them into a brand. In the mHealth sector most have realised that medical or clinical approaches are too difficult, so have euphemistically renamed exercise and dieting as health and fitness. Meanwhile, energy utilities are attempting to improve their image by rolling out customer engagement programs, whether that’s in the form of green button apps in the US, or in home energy displays in the UK. Both hope that this will result in customer loyalty for their brand, attracting new customers and retaining existing ones.

In recent months both sectors have latched onto gamification, often as a result of hiring strategic marketing people from web and mobile phone companies. They’ve taken to gamification like enthusiastic bricks to water, hoping it will change the way consumers value their products and buy from them. I think they’re sadly mistaken. As proof, I’d cite the success of Viggle, which illustrates exactly what the average consumer wants from gamification. Viggle let’s you win points by watching TV. It’s nothing to do with better health or savings on your energy bill – it’s the couch potato dream of free pizza for mindless inactivity.