Commentary
Onzo responds to the Australian government's Task Group for Energy Efficiency
Onzo has responded to the Task Group for Energy Efficiency set up by the Prime Minister of Australia. The aim of the group is to provide recommendations on the most economically, environmentally effective and socially inclusive energy efficiency mechanisms that can deliver a step-change improvement in energy efficiency by 2020 and place Australia at the forefront of OECD energy efficiency improvement. The Task Group released its first Issues Paper that sets out the key issues on which they would value comments.
Secretariat to the Task Group on Energy Efficiency
c/- Department of Climate Change and Energy Efficiency
GPO Box 854
Canberra
ACT 2600
Dear Sir
Onzo wishes to take the opportunity to contribute in this letter to the Prime Minister’s Task Group on Energy Efficiency announced in April by the Prime Minister’s office.
Onzo, a global provider of customer intelligence solutions for utilities, welcomes the objectives of the Task Group to deliver a step change improvement in Australia’s energy efficiency by 2020.
Smart meters provide greater accuracy and frequency of billing – which is welcome – and remove the need for manual meter reading – which will be welcomed by shareholders and customers if the benefit is passed on.
But on their own, smart meters do not provide any more real-time information to the consumer than is available from the present generation of meters.
The installation of smart meters will only be effective in reducing energy usage and cutting carbon emissions if it is accompanied by an integrated programme of customer engagement. Therefore, in order to make a real difference to domestic energy efficiency, Onzo recommends that energy retailers invest in consumer-orientated tools that work alongside smart meters.
Useful information to facilitate this can be provided in a variety of ways, and we believe there should be an obligation on suppliers to provide real time and historical energy information to consumers.
While much work has been done on what induces behaviour change in other areas, especially those relating to health issues such as obesity and smoking, comparatively little has been carried out in the field of energy. The effectiveness of energy-saving technologies ultimately depends on human behaviour.
In encouraging behaviour change research shows that there are four main tools that produce results and are more compelling when combined as multiple customer touchpoints:
- Differential pricing tariffs that encourage energy use at non-peak grid times;
- An individualised printed energy report to inform and educate consumers about energy use and puts the utility brand in the home often received as an accompaniment to the utility bill;
- Personalised historical information, analysis and recommendations provided through electronic media (websites and smartphone apps) that is continuously evolving so users find it compelling and increase the frequency of their visits; and
- Real-time in-home energy displays that provide instant reassurance or warning on energy use.
Based on an average of global studies to date, we know that ‘normative’ comparisons in printed energy reports have reduced energy usage by less than 3%. This compares with 10% for websites and 13% for in-home energy displays.
The Government should make it compulsory for utilities to provide customers with this kind of information – but they should not dictate the way they do it.
There is a danger that if this were to happen, by perhaps mandating in-home displays, utilities could suffer through an inability to invest in the generation and distribution infrastructure, which is required if renewables and local generation are to be embraced, whilst it could also affect their ability to invest in smart metering which enables accurate billing and time-of-use tariffs.
What utilities need is an incentive to encourage and enable reductions in usage if the Government is to meet greenhouse gas emission reduction targets.
Behaviour change is extremely complicated. A multi-faceted approach is required – there is no silver bullet. And little progress will be made on it unless the circle is squared and there is reconciliation between the profit motives of commercial entities, the consumer’s desire to reduce cost, and the Government’s requirement on all our behalves to reduce greenhouse gas emissions and save the planet.
We hope these observations are helpful and would be happy to enlarge upon them at a meeting should that be considered useful.
Yours faithfully
Nick Lonie
Business Development Director - Asia Pacific
Onzo Ltd.
