TOKYO, 22 February 2019 – Energy technology startup SMAP Energy is proud to announce the results of its Winter Demand Response (DR) savings campaign in collaboration with Japanese energy retailer Looop. This follows the successful result of the Looop Summer TOU Trial.
- This program was applied in winter to reward participants for reducing high energy usage in energy-intensive periods.
- On average, incentives resulted in a 4% reduction in power consumption during targeted periods.
- The most successful participants achieved average power reduction rates of 32% during the program. This same group also reduced consumption by 53% during “super” periods.
- These results were achieved using half-hourly data readings from the participants’ smart meter and gamification incentives for consumer behavioural change, with no additional hardware requirements.
- SMAP Energy is running another spring program and continues to be active in the field of time-of-use/demand response incentivisation following the positive results of both studies.
Introduction
The Winter Demand Response (DR) campaign was designed as a follow-up study to the previous Summer Trial, which achieved peak demand reduction and savings for customers of Japanese energy supplier Looop by optimising the design of a time-of-use (TOU) tariff and providing digital engagement tools.
Compared to its predecessor, the Winter DR campaign featured some adjustments. Looop sent participants notifications of when to take advantage of the following day’s peak periods – called “Saving Time” period – tying rewards to short-term behavioural adjustments in response to price signals. SMAP Energy assisted in delivering both programs by leveraging a suite of digital engagement tools and its proprietary AI-driven technology to predict customer behavioural response.
Why Demand Response is Important
Throughout any given day, spikes in electricity demand can occur, causing both network maintenance issues and increased carbon emissions as dirtier energy sources (e.g. coal plants) are turned on to meet demand. One major barrier to curtailing peak load – or electricity usage during peak hours – has been a lack of equipment capable of tracking users’ consumption during these hours. Smart meters allow for data collection at the half-hourly level – much more frequently than existing “dumb” meters – which enables insight into how much energy is consumed over the course of the day.
An increase in the number of smart meters deployed has provided a critical bridge to offering TOU tariffs. TOU tariffs rely on charging different amounts for energy consumption over the course of several periods in the day. Critically, TOU tariffs reflect wholesale costs of generation and transmission of electricity at the moment it is used as opposed to single rates, which are set based on hedged statistical projections of yearly averages of electricity prices.
Demand Response technologies, on the other hand, enable the appropriate rewarding of customers for changing their behaviour – in this case, peak load reduction. Through a combination of TOU tariffs and DR rewards, customers can be incentivised to reduce their electricity usage during costly peak hours and energy utilities can have an array of options to employ based on their needs.
Through its smart meter installation program, Japan has successfully put in place over 50% of the country’s potential, meaning it is on track to installing one in every household by 2023. As a result, TOU-tariffs are now an effective and feasible means of achieving efficiency benefits in the Japanese energy sector.
For more information on the importance of DR and smart meter data, visit this page.
The Looop winter DR trial
A total of 2740 Tokyo households supplied by Japanese energy retailer Looop participated in the program between the 15th January to 22nd February.
As during the previous Summer DR trial, SMAP Energy provided an energy consumption visualisation application that tied in to Looop’s existing customer engagement channels. This app was adapted for the project to enable participants to track both personal savings and team progress in the program.
Participation in the campaign was tracked solely by observing energy consumption changes in each participant’s smart-meter data – without installing any additional hardware – through SMAP Energy’s unique data analytics platform.
As with the summer trial, participants earned points for reducing energy consumption in the designated peak periods. These points had a direct commercial value, as they could be redeemed at the end of the program for an Amazon gift certificate at a rate of 1 JPY (approx. 1p)/point.
Electricity savings were calculated based on the difference between estimated and actual usage. Rewards were granted at a rate of 5 points/kWh during standard Saving Time, and 10 points/kWh during Super Saving Time.
Gamification was also employed, with the participants being divided into 3 teams and additional rewards granted for individual and team point totals.
Results
How frequently did savings periods occur?
Over the course of the 39-day program, 273 half-hour periods were designated for Saving Times, while Super Saving Time was active for 2 hours on February 9th, 2019 (a particularly cold day in Tokyo).
How large of an energy reduction was observed?
Participating customers achieved approximately 4% average reduction across all Saving Times. Notably, the most successful households had an average reduction of 32% while Saving Time was active, which grew even further to 53% during Super Saving Time.
How did participants achieve the savings?
We conducted interviews with several of the participants to understand how they changed their behaviour during Saving Times. Participants reported that they were able to accomplish all their tasks and chores during cheaper, non-peak hours, as a direct result of the reward system put in place, “We turned on the heating and warmed the room until just before the Saving Time, and turned it off during the target time”, reported one participant. Another participant said, “I turned on and off the electricity like a game with my kids”.
What’s Next
Combining both the SMAP TOU and DR tech packages presents a compelling solution for energy retailers to pass additional savings on to their customers with no adverse requirements for data collection or additional hardware installations. It was also predicted as having positive implications for customer acquisition, engagement, and retention, while allowing suppliers to diversify their offer in a competitive retail market.
With two trials successfully recorded, the SMAP TOU/DR apps have produced very promising results for incentivising energy-conscious behaviour and translating this into direct savings for customers at no additional cost to their supplier. Further study is needed to fully investigate the potential of domestic demand response, including the ability to strategically increase consumption at periods of high supply.
Looop has already announced a project for Spring 2019, called Reverse-DR, which will focus on matching surges in solar electricity output with increases in demand, so-called “Turn Up” events. This project will focus on incentivising consumers to shift their usage to cheaper off-peak hours, typically because of excess electricity from solar plants, which would otherwise be turned off. Customers will be awarded points for every kWh used during these periods, redeemable as Amazon Gift Cards.
“We are very excited to be developing concrete examples of how to leverage smart-meter data into applications that have sustainable, scalable outcomes. Ensuring electricity from solar farms is being used and not wasted means that we are providing benefits to both customers and the environment,” said Paul Monroe, co-founder of SMAP Energy.
The program will run from 19th April to 19th May, if you want to find out more, contact the SMAP team at info@smapenergy.com or stay tuned for updates!