Smart meter enable new business models

experiences from the UK and German market

Lars Weber 3.11.2015

The roll-out of smart meter in the UK is well on its way

Set up the

infrastructure

Train installers

Test and trials

SMETS1 standard

Supplier read meters

In-home displays

mandatory

2

Foundation stage

Start in 2016

~ 20m meters

Peak 2019

SMETS2 standard

(SMICOP)

DCC provides meter

data

Physical in-home

displays still

mandatory

Installation stage

After 2020

Post roll-out

? The main benefit for the customer will be the transparency of consumption

Germany started moving towards this approach

The current draft of the law “Gesetz zur Digitalisierung der Energiewende”

changed the approach

Longer time scale for the roll out

Competitive meter operator, unbundled from distribution

Customers should have access to their ¼ h meter data one day in arrears

Tools can be e.g. in-home displays or online sites

Law (draft) is still under consultation and discussion and likely to change

The overall approach shows a stronger emphasis on customer engagement

and competition

3

This new regulation would move the German residential and SME market

nearer to the UK model and in some issues even beyond

Lessons learned can be transferred

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4

Competitive meter operator

created a market for SME

customers for energy efficiency

and forecast optimisation

EEG created demand for local

interruptible solutions and

demand side management

Shift focus also to the customer,

not only distribution grid

Germany

New products for SME multi-sites

and PV portfolios

Better forecasts

The competitive roll-out inspired

attractive

visualisation solutions

New energy propositions (e.g.

SPAYG)

Smart home propositions

Roll-out will enable time of day

tariffs

Regulations like settlement are similar, time frame and competition are

different

UK

The idea to visualise meter data to change behaviour is

common

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Visualizing of ¼ h

meter data online

Change of customers

behaviour

Reduce consumption

Aspire time-of-use-

tariffs

Meter operations as a

separate market

Local serial interface

Germany

Visualizing of 5s

meter data on the IHD

Change of customers

behaviour

Reduce consumption

Aspire time-of-use-

tariffs

Meter operation as

part of supply

Local radio interface

UK

Can this be achieved by

½ or ¼ hourly data one

day in arrears or in-

home displays?

The approaches differs mostly in the technical solution

In the UK consultation about the way to visualise are

ongoing

The installation of a physical in-home device currently is mandatory

In August 2015 DECC consulted the industry abut new ways to provide

consumption data to customers, e.g. on smart phones

Supplier can apply for derogation from the mandate for trials by end January

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Meaningful information to customers have to be

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Relevant for call to action

Clear about possible

actions to take

In common language, not

in tech talk

In (near) real-time

Actions as

automated as

possible

Accessible real time data in the home can be the answer

Some suppliers have already started or announced pilots,

regulatory consultation is ongoing

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20 mio. customers

1.7 mio. Smart

meters installed

pilot with 500

households

Smart Energy

reports based on

AlertMe platform

Integration of

smart meter data

into Hive

84% of Smart

customers opted

in to half hourly

data

9.6 mio.

customers

40k smart meters

installed; further

210k expected by

May 2016

Bundle tariff with

Tado smart

thermostat;

customers receive

free Tado care

(remote boiler

health check)

0.4 mio.

customers

90k Smart meters

installed

Sell Salus iT500

Smart thermostat

Will move into

Smart Home

Stated: a third of

their IHDs have

been switched off

by customers

after a year

5.7 mio.

customers

35k smart meters

installed

Sells Netatmo

smart thermostat

(HeatSmart)

Prefer to offer a

phone services

5.3 mio.

Customers

Smart meters with

geo Duett II SED

Phone data

offering on the

roadmap

Smart thermostat

partnership with

Google/Nest in

bundling with a 3-

year tariff

Want to engage in

the connected

homes arena

5.2 mio.

customers

Aiming to install 6

mn Smart meters

Prefer metering

data on smart

phone

Sells Climote

smart thermostat

(Scottish Power

Connect)

Consumption data

also integrated in

the Connect app

Giving customers control over their consumption looks promissing

0.8 mio.

customers

10% of customers

have smart

meters

Started trial for

metering data on

phone in 12/2013

Sell Cosy Smart

thermostat (Green

Energy options)

Offer a basic

Smart Home

solution with

smart plugs

VSED and Connected Homes strategy / LW 19th Oct 2015

In-home solutions can push energy savings further

Studies have shown that customers are unlikely to actively change their

behaviour massively if comfort is reduced

The spread has to be 30-50 ct/kWh to actively shift load

Automated services that enable the customers to have their energy

consumption optimised without any activity is key

9

Home

Control

Home

Energy

Home

Security

Home

Care

PV

Heating Sensors

Heat

pumps

Storage

Appliance

eMobility Lighting

Smart

Thermostat cloud

Smart Meter Supplier

Customers need additional incentives to change behaviour

The large lever is in load shifting assisted by time-of-day

tariffs

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Supplier’s

purchase

Customer’s

consumption Settlement

Actual load profiles create the chance to reduce losses (and cost) due to

variances to standard load profiles

Higher quality forecasts for their customers (as a group) will help reduce

risks, differences and associated cost in energy procurement for suppliers

UK and Germany have very similar settlement rules

The UK has started the P272 project for SME customers to use actual load

This approach could be used for Res customers In UK and Germany, too

Does this has impact?

The lever is there

Technologies to control consumption have to differ from the ones used for

larger customers

This massive number of metering points need standards, project oriented

business can’t be sustainable

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non half-hourly half-hourly

Type Number Annual energy Number Annual energy

Import metered (energy used) 29,730,762 163.7 TWh 120,541 130 TWh

Export metered 3,457 0.01 TWh 3,982 26.7 TWh

unmetered supplies 28,233 1.4 TWh 268 2.7 TWh

Source: ELEXON, UK figures of 2012

Players from different industries are likely to enter the

arena

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Internet giants

Energy

supplier

Smart Home player

Integrate ZigBee SEP or serial interface in their

gateways

Provide energy insights, analytics based on

real-time data

Provide products & services that combine

Energy Efficiency & Comfort Control

HEM domain

specialists

Energy

insights

Startups

The current energy industry faces the risk to be reduced to the pure

commodity service and lose their customer contact

VSED and Connected Homes strategy / LW 19th Oct 2015

Changes normally come disruptively after a slow start

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Internet traffic is an example on the change from slow start to

sudden rapid growth in a market

Sourc

e: W

ikip

edia

: N

o o

f w

eb h

osts

Logarith

mic

scale

What next

Changes that need adoption normally start slow and peak at some point

The point when this happens is difficult to predict

Energy suppliers and the whole industry can prepare for this

Competitors that manage data are already starting

Examples from the German and UK market show concrete approaches for

in-home solutions

The energy industry can make use of its deep knowledge of energy market

now and transfer this to the digital age

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