Smart meter data is not a panacea. In fact, such data is only part of the information suppliers need to truly overhaul their customer offerings.
Smart meters will undoubtedly result in more accurate billing and improved customer service, but to realise the full potential of the data suppliers must look beyond the meter readings. The game-changing opportunity will be to provide tailored, integrated customer service and sales by combining large amounts of customer data from diverse sources and using the scalable, on-demand services on offer from cloud technologies to analyse multiple scenarios.
There are two sources of big data available to utilities. The first is from the "smart" world - data that is made available from the smart meter infrastructure such as meter readings, consumption information and network performance data. This type of data can be directly accessed by utilities through specialist software and tools that provide a straightforward analysis - for example, calculating an accurate bill or assessing how a customer's consumption changes over time.
The second type of data is not directly available to utilities. This is data from the "digital" world and encapsulates all of the other large data sources that are part of consumers' everyday lives. Some digital world data is "open" and available for quantitative or sentiment analysis, such as Twitter and posts made on forums, news comments and Facebook pages. There are also data sources that are "closed", that is, not publicly available in granular detail. Closed data sources include mobile phone information, retail purchasing or insurance claim records.
So how can utilities unlock the value of both smart world and digital world data, when they are already facing challenges such as the delayed smart meter programme and increasing price pressures? The answer lies in forming strategic partnerships with organisations that specialise in either capturing the data or in processing large volumes of it. A good example is the Met Office World of Weather website, which allows weather monitoring enthusiasts across the globe to post weather readings from their individual locations. The site - built and running on Google's cloud platform - serves millions of reads a day and now provides global coverage at a level of detail surpassing satellite imagery. If we were to combine this data source with energy consumption information, a retailer would be able to analyse behaviours and patterns down to street level. And this analysis could be achieved without any upfront commitment of infrastructure, since all data could be handled using expandable processing capability.
A potential growth area for suppliers is to provide a greater number of value-added services, for example around home heating, plumbing and energy efficiency. Forming strategic partnerships with mobile phone networks would allow anonymised and aggregated data to be used to better understand consumers' movements and service preferences. Why shouldn't your home know when you are coming home early or late and change the heating times accordingly? If a problem is detected in your home services, why shouldn't a call be made automatically to quality-assured local tradesman who can be available to fix the fault when you arrive back home?
Groups such as the vulnerable, the elderly and the fuel poor would also benefit from large-scale data analysis. We know that there are valid privacy concerns on the use of consumption data, yet it holds the key at a district, street and home level to providing informed and targeted energy efficiency advice.
For those struggling to pay their bills, data can help by telling them how and why their consumption was higher than the average for the same demographic, residence size and family size. The energy consumption of millions of devices such as fridges, freezers and TVs could be calculated and alternative scenarios run with new equipment to calculate the return on investment the consumer could enjoy by changing. In many cases, replacing devices could prove cheaper than keeping existing, inefficient equipment.
A forward-thinking supplier could form a partnership with an electronics retailer and supply goods at a discount, or even at zero cost, yet still offer lower bills to the consumer. Partnerships with online electronics retailers mean there is no need to invest in physical assets such as stock and warehouses. A seamless service can be delivered through integration in the cloud.
Finally, a big opportunity area for suppliers is to analyse and use the unstructured data available through news feeds, Twitter and forums to detect patterns and trends (see feature social media, page 20). Expanding cloud processing services from companies such as Google and Amazon can process millions of user comments per hour, and tools such as BigQuery (a Google data analysis tool capable of handling billions of rows of information in the cloud) allow the data to be explored in a meaningful way. Is there a core group of protesters against your company who are active on multiple digital channels? Should you engage them directly, or embark on a marketing campaign to refute their comments? Forming the right partnerships will allow this kind of analysis to be performed quickly - and before a reputation is lost.
Greg Beard is an energy expert at PA Consulting Group
For more information on PA's energy expertise, click here or contact us now.