Jamil Ahmed Distinguished engineer, Solace
The UK has continued to see surging energy price rises. Following an increase in the UK’s energy price cap, by October, a household’s typical energy bill will be set to rise to a whopping £800. The costs are being passed on to the consumer, already struggling with rising inflation. So what can be done to help reduce a household’s energy bills to help the impact on one’s finances?
The rising price of energy can be attributed to several reasons. Firstly is the initial economic bounce back following the pandemic seeing soaring demand. However global factors such as the windless summers seen in Europe, droughts in South America and the ongoing conflict in Ukraine have all been major contributors to price rises. While the UK government has already offered loans and begun debates for a windfall tax, this is only a short term fix, and more must be done.
Making meters smarter
Over the past 10 years, the UK government has made concrete efforts in the installation of smart meters. Despite the initial onset cost of delivery and installation, the government believes that the benefit will be seen in the long term across households in the UK.
Yet smart meters have taken a public beating. The criticism is not the direct fault of the device itself, but rather in its execution. ‘Non-smart’ meters, what we are used to seeing, do not do enough to bring a full context into one’s energy consumption. Typically, when looking at their meter, a consumer will simply see a number rising with no specific understanding as to what it refers to in terms of pound for pound usage. This data adds little value to a consumer and has no impact on the potential positive changes that can be made in everyday energy consumption.
The first step to solving this issue is to improve the consumers’ understanding of how they typically consume energy throughout any given day. This means there needs to be a complete overhaul at both the consumer and company level. If a consumer is more knowledgeable as to how much their energy usage impacts their bills, they will be better informed of how reflective their daily habits of consumption are.
By presenting the data registered by smart meters – for instance through an interactive display, a mobile app or even a simple website – it gives consumers a deeper level of understanding of their energy consumption habits. If a consumer can see the differing prices for energy as part of a smart tariff, they can adjust their behaviour accordingly. This will be used to their advantage, such as moving the usage of their washing machine to the next day, or charging their car late at night if costs are lower in the evening. This is a clear example of nudge theory, a concept in behavioural economics that passes positive reinforcement and indirect suggestions onto the consumer. In this case, not only will it reduce a consumer’s energy bill long-term, but it will allow for further environmental initiatives to be pushed forward.
The question is how can smart meters offer the highest level of accuracy and timely nudges to the consumer? The answer lies in real-time data movement.
How the government can act
In 2021, the Office of Gas and Electricity Markets (Ofgem) announced it would create the Market-Wide Half Hourly Settlement (MHHS). This proposal is a key enabler in supporting the transition to net-zero. It will contribute to creating a cost-effective electricity system and encourage more flexibility in one’s usage of energy to lower household bills.
The programme will mandate that all energy companies provide half-hourly updates from providers on a consumer’s energy consumption. When put in place, it will see a boom in the efficiency of smart meters as it allows consumers and businesses alike to reduce energy usage, moving us towards a greener Britain.
For smart meters to provide this level of insight, it will require a seamless movement of vast amounts of data between the smart meters to the energy providers, and back again to the consumer across different channels. As it stands, smart meters summarise the consumption data in, usually, daily updates to the provider. This move to half-hourly will mean a 48x increase in data volume to process from each meter. Existing IT infrastructures are not currently built to cope with this expected massive change in data volume. Energy providers must deal with the issue sooner, rather than later.
The key lies in real-time event-driven architecture
Real-time data movement occurs when a piece of information can travel almost immediately the moment an event happens, all across the chain of interested applications and users. Consider the smart meter as a publisher of consumption events, with the energy provider and the members of the household as simultaneous subscribers to those same events. Event-driven architecture (EDA) organises IT systems around the flows of these ‘events’ to provide a more seamless and ‘joined up’ experience across different business functions and services. Companies in the retail sector have adopted such an approach to implement ‘omnichannel’ shopping experiences, for example.
Only when there is no delay in such data movement, can it truly act as the ‘nudge’ to positively adapt and lower usage habits, or detect potential energy wastage. This envisaged decrease in total usage benefits both the consumer’s wallet and the environment.
In fact, it is for this reason that Ofgem has proposed for the MHHS programme to embrace EDA as its underlying IT foundation. The need for real-time has already been recognised by many to drive greater value out of their data. A recent global survey reported 71% see the benefits outweighing the costs of implementing EDA. Thankfully, Ofgem has recognised the need for EDA in lowering prices, helping power the race to net zero.
EDA will be the sole differentiator for MHHS to be successfully implemented and achieve the desired aims. It will allow energy providers to react in real-time to updates from smart meters, and in turn, inform consumers through apps and services in real-time of usage insights with new capabilities such as trend reporting and more accurate future consumption predictions.
Environmentally speaking, the race to net-zero can and should be powered by real-time data. Off the back of MHHS, Ofgem could introduce ‘smart tariffs’ to act as an incentive to decrease energy usage. When prices are lower during certain periods, customers can be made aware, in real-time, through a multitude of channels (such as mobile apps or smart home devices), encouraging them to take advantage of this shift and alter consumption levels. Taking this one step further, it can be applied to connected appliances as well, helping alter usage patterns to optimise costs based on the insights available from this new future. Imagine electric vehicles automatically adjusting charging activity themselves to optimise costs.
Eventually, the proposal of encompassing EDA into the UK energy sector is both a welcomed and necessary one. Event-driven architecture will be the pivotal driver, long term, for reducing costs on both sides of the energy aisle.
Image Source https://www.abelectricians.com.au/sydney-electrician/
