Raising Standards for Consumers

The European consumer voice in standardisation

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Neil Avery

ANEC Smart Meter & Smart Grid Project Team Leader

European Utility Week, Amsterdam, 5 November 2014

The Smart Consumer in the Smart Market

Raising Standards for Consumers

Contents •  Overview of ANEC •  The rise of the smart consumer

•  The meter as a tool to help the consumer to save energy

•  The consumer’s fears: information, choice, privacy and costs

•  Actions required to encourage active consumer engagement

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Raising Standards for Consumers

Overview of ANEC •  Established in 1995

•  Co-funded by the European Commission & EFTA

•  Represents national consumer organisations in all 33 EU/EFTA countries

•  Involved in more than 80 technical and political bodies of CEN, CENELEC and ETSI; and in ISO

•  Ad-hoc group of members’ representatives to elaborate consumers’ views on smart meters/grids

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Raising Standards for Consumers

ANEC’s Aims and Objectives

Represent consumer interest in standardisation and influence related legislation by:

•  Ensuring a high level of protection •  Counterbalancing the industry view

•  Promoting accessibility and ‘Design for All’ •  Ensuring public interest representation

Objectives for smart meters •  Protect consumers against risks from new functionalities

and from risks related to control of data •  Help all consumers to realise benefits •  Meet the specific requirements of consumers in

vulnerable circumstances 4

Raising Standards for Consumers

The rise of the smart consumer?

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Raising Standards for Consumers

Are consumers getting smarter?

What do we know about consumer behaviour? •  Real time, interactive technology is changing consumer

expectations and behaviour •  Consumers behave differently and changing their

behaviour can be difficult •  Behaviour is most strongly influenced by outcomes that

are immediate and certain

Can we describe a smart energy consumer? •  Seeks best deal and/or acts to reduce costs/usage •  Able to evaluate needs and use available information to

get better value or use product more efficiently •  Actively engaged & able to adapt to ‘smart’ technology •  Likely to have changed usage/supplier in similar markets

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Raising Standards for Consumers

Are consumers getting smarter?

Is there evidence of smart consumer behaviour?

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Smart behaviour? Not so smart! Switching from the big supermarkets to discounters

Decisions made on “headline prices” without understanding terms

Using price comparison or peer review sites to find best deal

Switching to expensive providers; using unreliable peer review information

Reduced consumption with water metering

Buying unwanted financial products

Cheaper deals & special offers from existing providers

Confusion about best tariffs Reluctance to switch or tied into expensive contracts

Raising Standards for Consumers

Smart consumer and smart phones

•  Consumers with experience about a product can predict their choices relatively well, but often: –  overestimate the importance of features, call rates/free calls –  underestimate the importance of a monthly access fee,

phones rates and the connection fee •  Consumers need protection over use of personal

data, unfair contract terms and charges •  Problems with switching and high levels of

complaints 8

1973 2014 Smart phones have diversified and become more complex

Raising Standards for Consumers

The meter as a tool to help the consumer to

save energy

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Raising Standards for Consumers

Car Fuel Consumption Display – does it change driver behaviour?

Why do smart drivers need a display to help them to reduce fuel usage by changing the way they drive? Do smart drivers: •  Use the display to monitor fuel consumption for the journey? •  Take immediate action to reduce their fuel consumption? •  Change their journey plans to reduce fuel consumption?

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Studies show that changing driver behaviour can reduce fuel consumption by 15% •  Very simple display •  Highly visible •  Instant usage information •  Instant feedback on action taken

Raising Standards for Consumers

How can smart meters save energy?

To help consumers change behaviour they need: •  Easy access to personalised, understandable and usable,

information on current and historical consumption •  Real time “at a glance” information showing results of

actions and incentives to encourage active engagement •  Interoperability/connectivity with home appliances

•  An accessible interface, to enable data to be used and shared with third parties

Research shows that to maximise savings: •  Data should be provided using multiple feedback

channels (e.g. mobiles, internet, in-home displays etc.) •  Information should be available to all users in the home

•  Displays should be aesthetic, ergonomic, simple, ambient and intuitive. 11

Raising Standards for Consumers

The consumer’s fears: information, choice,

privacy and costs

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Raising Standards for Consumers

The consumer’s fears - Information

Will consumers have the information they need to make informed decisions on consumption? •  Many smart meters will not be able to provide consumers

with real time consumption information •  Consumers must be able to access and control their data •  Active consumer engagement requires information on:

ü  Comparisons with historical usage and other consumers ü  Cost and usage by appliance and by time period/tariff

ü  Cost per hour and usage/bill forecast

ü  Unusual usage alerts & instant feedback on actions ü  New types of data that may become available (e.g. on

appliance usage or power quality and voltage) ü  How to obtain help/support & more detailed information

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Raising Standards for Consumers

The consumer’s fears – Choice

To help consumers get the best deal, they need: •  Objective and reliable information on available offers

•  Access to independent comparison tools

•  Easier and faster switching

To ensure consumers are protected, they need: •  Understandable, transparent and fair contract terms •  Protection against misleading/aggressive marketing and

effective redress against third party providers •  Full interoperability with home systems and appliances

following change of supplier or system upgrades •  Protection against increase cost of peak energy if they are

unable to reduce usage or change consumption patterns •  The right to opt out of DR schemes & refuse a smart meter

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Raising Standards for Consumers

The consumer’s fears – Privacy

Privacy concerns may lead to loss of consumer confidence & engagement from: •  Media stories about threats of hacking, cyber terrorism

•  Detailed consumption data being used without permission for consumer profiling

Essential requirements include: •  Privacy by design and by default in the communication and

handling of data in smart meters & smart grids •  Data not required for billing/regulatory purposes shouldn’t

be collected without the consumer’s express permission •  Rigorous privacy impact assessments that fully reflect the

impacts on consumers, especially vulnerable ones •  Effective redress mechanisms to deal with privacy breaches

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Raising Standards for Consumers

The consumer’s fears – Costs

Consumers will pay the costs of smart metering, but savings are small & some may not benefit •  Average cost of smart meters expected to be €200 to €250 •  Expected energy savings of 5-6% are unproven •  Initial savings shown in some pilots may not be sustained •  Hard to achieve some benefits without required functionalities Demand Response schemes present new risks

16 Source: EC Benchmark report, 2014

•  Ability to change usage pattern •  Proliferation/complex tariffs •  Proactive protection against

financial & other detriment •  Loss of control and lack of

trust in energy companies •  Accreditation of third party

providers

Raising Standards for Consumers

Action Required!

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Raising Standards for Consumers

Key concerns for consumers

Accurate billing will benefit consumers but many concerns are not yet fully addressed: •  Continued access to accurate, clear & usable real time/

historical information on consumption •  Ability & motivation to reduce consumption or change

usage patterns to take advantage of cheaper tariffs •  Protection against safety, privacy, security risks

•  Risks of remote disconnection, restriction of supply and limited system interoperability with consumer devices

•  Possible cost increases due to proliferation of complex tariffs and increased cost of peak time energy.

•  Lack of trust in energy companies and accreditation of third party providers

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Raising Standards for Consumers

What needs to happen

Smart meters can help reduce energy costs, but concerns about limited functionalities in some meters need to be addressed so all consumers: •  Have the information they need to take informed decisions

about their energy consumption •  Are able to benefit from smart meters

More work is also required to: •  Reassure consumers about data privacy concerns •  Make it easier to switch suppliers and resolve potential

interoperability issues with devices in the consumer's home •  Ensure demand response schemes don’t result in some

consumers being disadvantaged •  Remove the barriers to changing consumer behaviour and

encourage active consumer engagement 19

Raising Standards for Consumers

Thank you www.anec.eu

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