Transactive energy gets dramatic engagement with real world electricity consumers
When the CEO of your national transmission system operator admits “we are coming up to crunch time” you know there are some big challenges to solve. Globally decarbonisation, energy poverty and financial pressures are driving the need for cleaner, cheaper power. Networks need to adapt to $billions being invested in clean techs. Retailers need to address wasteful customer churn and price wars. Consumers want a real choice for cleaner, cheaper power.
The transactive energy platform, including peer to peer, shows consumers are a key part of the solution to these challenges. A contribution that will grow exponentially in value in coming years.
Global industry challenges
First, networks need to adapt to integrate billions of dollars of distributed clean tech efficiently. Think solar PV, wind, electric vehicles, energy storage, IOT and connected appliances. For example, an average NZ daily commute means an EV charge will be 40% of the daily home load – a big change depending on when the car is charged and how adoption of V2G
technology is encouraged.
Second, tackling decarbonisation is driving a global take up of large scale intermittent generation. Accenture estimates 6 European countries alone needs 55-90GW of new flexible capacity to support this. In NZ as we tackle the last 20% of our non-renewable electricity generation when power is used becomes more important.
Third, as consumers spend $bns to reduce traditional power costs and carbon use, the industry needs to stay affordable. Cutting peak driven infrastructure costs is an important driver to long term efficiency and interviews of Electricity Distribution Businesses found 50% EDBs had peak pricing as a strategic issue.
Retailers want to engage with consumers in another way and looking for opportunities to do that. They face a broken retail model with a perpetual price and discounting war and high, costly churn rates.
They want a fresh way to engage with people on what they really care about. And that is important as retailers connect consumers and the supply chain.
Connecting the consumer
So whether in networks or retail, connecting with consumers adds value as when people use power has a big impact on its costs and carbon. emhTrade’s Peer To Peer (P2) power offering shows that consumers do change this when aligned to their values.
Historically consumers were not connected to the industry and retailers worked hard to keep things simple for them. People were really hard to engage, struggled to understand complex price signals and felt they had little opportunity to change.
Transactive energy now shows we can physically connect consumers and their distributed energy resources (DERs) to the power system, leverage their flexibility and technologies to deliver more efficient networks and an engaging consumers experience.
How we are delivering transactive energy
The Transactive Energy Platform is best seen in two parts:
- A consumer app (or widget for retailers' existing app)
- A co-optimisation engine that works out when it is best to increase or decrease demand and delivers that flexibility to where it is of most value (networks, markets etc).
From a consumer perspective it is an app that helps people use cheaper, cleaner or local power according to their personal preference. We give people daily tips, they act, we assess their impact from half hour meter data and reward them for what they do (reinforcing engagement).
From an industry perspective, it is a software as a service sharing economy platform that builds flexible consumer demand and matches it to energy market predictions, network TOU or demand pricing and generation mix to deliver it where it is of most value. Networks can reduce peaks, intermittent renewables can be efficiently used and market peaks avoided. And incidentally a fresh user experience that rewards consumers drives engagement, cutting churn and retailer costs.
It is valuable whether addressing winter peaks, backed off solar or wind, micro-grid optimisation or simply peer to peer connections between prosumers and consumers.
So what is the evidence it works – 6 tests:
- Do people care?
We know they do from surveys. 84% of consumers want their utility to better meet their personal needs (Accenture, 2017). Critically they care enough to act. When the PowerPal, the app that is the first front end of the Transactive Energy platform was launched to retailer P2’s consumers 50% opened the e-mail within 12 hours, 20% if these signed up that day – exceptional electricity industry engagement.
- Do they care enough to change what they do?
At the moment 60-80% of user check in with their rewards weekly – pretty impressive in an industry known to command minutes of user attention annually. When we compare peak time electricity use by the P2 users using the app and compared to those not using the app we've got consistently 10-15% lower peaks from the users (when both groups had very similar profiles before launching the app). Again exciting evidence from what is an early stage product.
- And do people sustain their behaviour change?
Well it is early days for the PowerPal app, but for transactive users on the 2 year old peer to peer solar share, 50%+ are checking in on their weekly.
- But will demand change when it is really needed?
Absolutely. On a critical peak reduction test (cold night, little wind generation and diesel peaker running) users were sent an additional notification with a personally relevant reason to act and triple points. 29% of these reduced demand by greater than 50%!
- So is it worth it?
Well people are changing today so for early adopters it already is. How networks change their pricing tariffs (and technology take up) will dictate how much more money can be on the table in future. A few cents/day with TOU prices that consumers need to change for everyday of their lives (regardless of any network constraint) may have a material difference to higher value demand charges or rebates concentrated on infrequent constrained times (even though on the surface the same $/kW of capacity appears to be offered).
- And finally can this all be made simple enough for consumers?
In an industry grappling with nodal and localised constraints, TOU, demand and capacity pricing, paid for demand response, emergency service restoration and back feed balancing, things are complex. But so long as pricing signals relate to real constraining events that impact networks and markets today’s computer processing and machine learning algorithms can predict outcomes and present a simple answer to consumers: a tip, let them act and give them a reward for their impact.
That is a model many businesses – and parents - use successfully every day.