IEA DSM Task 23 Executive Summary
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1 IEA DSM Task 23 Executive Summary This document provides a high level overview and summary of the key findings from a 2 year research project exploring Smart Grids from a consumer perspective Smart Grid Implementation: How to engage consumers IEA DSM Task IEA DSM 23: Task The 23: Role The Role of the of the Demand Side in in Delivering Delivering Effective Effective Smart Grids Smart Grids
2 Definition of offers and programs Synthesis and Dissemination Project Overview Aim To draw together international experiences in order to provide guidance on how to ensure the demand side become an integral component of a successful Smart Grid. Scope To explore Smart Grid related policies, technologies and tools from the perspective of the consumer (specifically households and small businesses) in order to gain a better understanding of the impact on consumer willingness and ability to engage in Smart Grids. Policy Examples: Smart meter roll out Appliance standards Market structure Settlement arrangements Billing arrangements Work Programme Customer perspective POLICY Impact of markets TECHNOLOGY CUSTOMER TOOLS Interaction with technology Risks and Rewards Technology Examples: Smart meter In-home display Smart appliances Remote / auto control SMART GRID Tools Examples: Time of Use Tariff Energy services Demand aggregation Energy advice
3 Participants A multi-national project with partners from five countries Yvonne Boerakker DNV GL Even Bjørnstad Enova Operating Agent Chae, Yeoungjin Korea Power Exchange Magnus Brolin SP Technical Research Institute Linda Hull (EA Technology) Duncan Yellen EA Technology
4 Understanding Energy Behaviour (1) In order to understand what is meant by energy behaviour, it is necessary to consider the following elements: - The decision maker - The action - Where the action takes place - The point in time - The context Where the action takes place i.e. in the home The Context i.e. the external factors The action e.g. switching off lights The decision maker It is always the individual who makes the decision and performs the behaviour Consumer When the action occurs i.e. when leaving a room unoccupied
5 Understanding Energy Behaviour (2) - energy behaviour model Societal level Individual level External facilitators Attitude positive feedback Awareness Social Norm Intention Behaviour Habitual behaviour Self efficacy negative feedback External barriers Whether or not an individual performs a behaviour is influenced by: - Their individual views and beliefs (green boxes) - The external facilitators / barriers (blue boxes)
6 Case Studies NO1 NO2 Any Tariff or pricing incentive to reward consumers that change their pattern of demand. This includes static Time of Use tariffs, Critical Peak Pricing, Peak Time Rebates and Real Time Pricing. UK8 UK1 UK2 UK9 INT5 UK7 UK6 UK5 INT1 UK4 UK3 NL2 NL3 NL1 SE1 SE2 SE4 SE3 Key Control Advice Feedback Controls to actively manage demand, including direct/automatic load control, home/building energy management systems, smart thermostats. Feedback of energy end use information relying on data collected from the smart meter. Includes inhome displays, web based feedback, billing information and feedback via mobile devices such as phones and tablets. Advice to help consumers deliver outcomes that support the effective delivery of Smart Grids, including advice targeted to an individual or general advice distributed to groups. IT1 Tariff During the project, 23 case studies from around the world were used to explore consumer experiences with one or more Smart Grid related interventions. INT2 INT3 INT6 INT4 KR1 INT7
7 Review of consumer attitudes The views and opinions were wide-ranging During the project, 22 consumer surveys were reviewed to explore consumer attitudes to Smart Grids related initiatives Some consumers say they would not participate under any circumstances The level of payment required varies, but in many cases it is not unreasonable Some consumers are sceptical and lack trust There is a lot of misunderstanding about why industry stakeholders are developing smart grids and why consumers should engage Once the drivers for Smart Grid are understood, some consumers say they would be willing to participate Many consumers say they would participate in return for a financial payment
8 Smart Grid Implementation Guidance document What is it? The guidance document describes a step-bystep approach to implementing Smart Grid initiatives. Who is it for? The document is intended to provide guidance to implementers of Smart Grid initiatives, specifically those initiatives that require action from households and small commercial / industrial businesses. How should it be used? The guidance document provides general guidance, applicable in a range of contexts, on how Smart Grid initiatives should be designed in order to make them more attractive to consumers.
9 Overview of guidance document The document contains a number of interesting and relevant examples to highlight the key criteria from a consumer perspective. Each Section concludes with a series of key messages for stakeholders, outlining general criteria that need to be considered, and who is responsible for ensuring these criteria are met. Introduction Section 1 Section 2 Section 3 This Section describes the Background to the project, including: - An overview of Smart Grids - An introduction to energy behaviours and energy practices This Section provides a high level description of the Factors for successful implementation - introduced in the form of a step by step process It is suggested that readers start by reviewing the background information in Section 2, followed by the overview of the step-bystep process in Section 3. Section 4 Step 1: Understand drivers Section 5 Step 2: Define outcomes Section 6 Step 3: Target consumers Section 7 Step 4: Design offering Section 8 Step 5: On-going support Section 9 Step 6: Assess benefits Section 10 Step 7: Monitor and Evaluate Section 11 Step 8: Implement Section 12 Tools to assist implementers - Assessment matrix to evaluate the benefits of Smart Grids - Quantifying benefits and dis-benefits to the consumer - Customer segmentation models Further Reading Section 13 Thereafter, readers have the option to focus only on those areas where they require further information and guidance.
10 Key findings top five The impact of electricity markets on consumer engagement in Smart Grid activities is wide ranging and often poorly understood. Very little information is currently available on customer attitudes and experiences towards Smart Grids. Information collated from consumer surveys shows that consumers say they want a financial reward in return for actively engaging in Smart Grids. There is rarely a one size fits all solution, with many elements of electricity markets representing both facilitators and barriers to participation. Most of the published data focusses on measuring outcomes, with little data available to help with understanding what works and for whom it works. Evidence from trials shows that there are many reasons that lead to consumers not engaging in Smart Grids. 4 5 An assessment of readiness levels shows that whilst significant progress has been made on the development of technologies, the market is not yet ready to accept them. This is referred to as crossing the chasm that exists between early adopters and the early majority. Early adopters (see illustration) see new technology as a way to "beat the herd" and reap the advantages of the new technology/practice before it becomes common practice. The early majority, however, are hesitant to new technology, and choose to sit on the fence until it is proven. Neo-classical economic analysis is not sufficient Ensuring that the benefits outweigh any costs does not to predict whether or not a consumer will guarantee energy behaviour change takes place. Nonfinancial influences are as important, if not more so. undertake a specific action.
11 Key messages top five Ensure the Smart Grid initiative provides direct, tangible benefits to consumers. Tailor the initiative to meet the specific needs of target consumers. Community engagement can be a powerful motivator for behaviour change, but only where there is already a sense of community. Provide an element of choice over every aspect of the initiative, from the type of interventions to the installation process. Identify the needs of the target consumers. Do not assume that providing a financial incentive is sufficient to persuade someone to participate. Consider tailoring the initiative to provide direct benefits to the community itself. Community champions could help with recruitment if they can convince others the technology has reached a stage of development where it actually can function as intended and provide benefits. Avoid too much choice keep the number of choices to a minimum, and ensure the options are tailored to meet the needs of the target consumers. 4 Take care when framing the initiative, as this has a direct influence on consumer attitudes. Frame in terms of what is wasted if a behaviour is not adopted, rather than what is gained if it is adopted. Frame benefits in terms of a meaningful reference point (i.e. against something valued to the consumers). 5 Understand customer concerns, and do not underestimate the strength of these concerns. Ensure there is a mechanism to deal with misunderstandings and ensure that when things go wrong they are put right quickly. Do not assume that what works for one group of consumers will also work IEA DSM Task 23: The Role of the Demand Side with in another Delivering group. Effective Smart Grids
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