Innovation of smart meters needn’t just stop in the technology

25 October 2013

Tristan Colgate

Tristan Colgate

Former Managing Director

Since the Department of Energy and Climate Change announced its intention to have smart meters in over 53 million homes by 2019 back in December 2009, the discussion over its consumer potential have been constant. With the rollout starting last year and now beginning to gather pace, the opportunity to realise the benefits of smart metering by making it work for businesses is an exciting one.

Smart meters bring more accuracy and convenience for customers. The information detailing consumption and cost is accurately measured in front of your eyes. However, given a perceived lassitude around energy monitoring, there are concerns the smart meter rollout will be unable to encourage long term consumer change. But as well as further technological innovations, smart meters could revolutionise the energy company-consumer relationship. And not before time.

British Gas, having misfired last week with its 9% price increase announcement followed by a haphazard social media Q&A, had made moves to engage the consumer. Having started the ball rolling with a service enabling customers to remotely control central heating via a laptop, mobile or tablet, customer engagement with energy usage increased, mirroring online banking procedures or mobile phone data usage. Like in so many manufacturing sectors, tapping into the potential of cloud computing looks set to mark the next stage of progression.

The smart-cloud collaboration

German company E.ON recently announced that it will host its smart meter IT infrastructure at one of IBM’s data centres in Germany, using IBM's SmartCloud and Intelligent Energy Service Enablement Platform (IESEP). The goal is to improve the deployment and management of smart meters, simplify the integration of renewables, and other innovative services, while at the same time maintaining a high level of customer service.

First steps for customer-facing applications include usage profiles for information about time-of-use-rates and changes in use patterns that can be compared with historical data - features that are fairly common in smart meter deployments today.

The rollout of smart meters will make energy more palpable for consumers, with the hope an already increasingly informed consumer will increase awareness of their energy consumption.

A recent study by the Centre of Economic Performance looking at customers of First Utility smart meters found households saved an average of 11% of their energy usage when shown their consumption compared to similar households in their area via the provider’s my:energy portal.

This will make them better equipped to save money by switching provider or adapting how and when they use their gas and electricity.

With financial savings still just about the biggest consumer driver in the market, the added factor of the satisfaction of achieving a fair value for money also equates to increased value for money.

Informed customer, better procedures

For the utilities companies it will involve handling a significant increase in data to monitor consumption for supply and billing purposes. All of which, with the right systems in place, can be successfully analysed to provide more insightful business decisions - from operational issues such as how to profitably manage supply and demand, all the way through to identifying usage trends for the targeting of personalised offers and messages to individual customers.

However, exploiting the opportunities smart meters bring and making the most of the available information means going well beyond the traditional bill or statement.

Reliability of service, the relationship between usage and costs, communication of off-peak energy time bands and the associated carbon emissions will all hold different degrees of importance to each individual customer.

As the smart meter technological arms race continues to gather pace over the coming decade, it could provide the energy industry with the shot in the arm it has needed. While still a very young stage as a product, innovation is already taking effect. But accelerated, customer-centric innovations in consumer engagement are key to helping the technology reach its potential.

And if the ultimate outcome is pioneering a service more suitable to individual customer needs, then the hype will be fully justified.

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