Proving the Business Case for the Internet of Things

National Grid customers save $1.25m in smart grid pilot

Steve Rogerson
March 3, 2016
 
In the first year of National Grid’s two-year smart energy pilot in Worcester, Massachusetts, customers saved a total of $1.25m on their electric bills. Findings from around 11,000 customers revealed that in 2015 the programme achieved a 98 per cent retention rate and a 72 per cent customer satisfaction rate.
 
Collectively, customers saved a total of 2300MW-hrs, enough to power a local library in Worcester for nearly a year. Additionally, the average customer reduced their usage by nearly four per cent during peak periods of electricity demand.
 
“We are thrilled with the encouraging results from the smart energy programme and would like to thank our customers for their valuable participation,” said Ed White, vice president at National Grid. “We have learned a great deal, including that many customers are excited about the programme and want to proactively manage their energy use. We are continuing to enhance the programme and hope to gain even more insight in the coming year.”
 
The Massachusetts Department of Public Utilities (DPU) approved National Grid’s smart energy programme in 2012. To keep the DPU and other interested parties updated, National Grid prepared an interim evaluation report on the customer experience. A detailed report on the performance of the electricity distribution system will soon be submitted to the DPU.
 
“These reports have provided valuable data and insight that will help influence how we modernise our electricity system in the future,” White said. “As part of the programme, we have been piloting advanced automation on the electricity distribution system. This includes special equipment and switches that communicate and operate to automatically isolate power outages, minimising the impact to customers. During two major events the technology helped us reduce the time customers were interrupted by more than 75 per cent.”
 
The most important phase of the programme began in early 2015 with the activation of two dynamic pricing plans: Smart Rewards Pricing and Conservation Day Rebate. Both these plans provided participants with opportunities to lower their energy bills. During the summer of 2015, National Grid notified customers of 20 Conservation Days, days when demand for energy was expected to be high. On these hot and humid days, the price of electricity increased during designated hours, called peak events.
 
During peak events, customers using no-cost in-home technologies (digital picture frames, smart thermostats, smart plugs and the online energy portal) were able to reduce energy usage upwards of 30 per cent. The most popular action was to avoid using energy-intensive appliances during peak events. The average residential customer using the Smart Rewards Pricing plan saved more than $100 during 2015. The average residential customer taking the Conservation Day Rebate plan received a total of $20 in credits for reducing their usage during the 20 Conservation Days. Collectively, participants in both plans saved a total of $1.25m in 2015.
 
As part of the programme evaluation, National Grid explored customers’ expectations of the programme, their reasons for participating, and their experience during the first summer of Conservation Days. Key findings include high customer satisfaction, bill savings, and retention rates with few customers opting-out of the programme’s time-based rates. More than 70 per cent of customers were satisfied with the programme.
 
Importantly, the company found that customer savings were in line with other, mostly opt-in, smart grid pilot programmes across the country. The interim evaluation report stated: “The 98 per cent retention rate achieved to date by National Grid, coupled with the fact that the company called more event days in 2015 than any other dynamic rate (pricing) pilot, is remarkable.”
 
National Grid is continuing to enhance the performance of the programme in 2016. These measures include exploring better ways to communicate with customers in advance of and during Conservation Days; enhancing the Worcester Smart online portal to provide new types of incentives and redeemable rewards for customers to become more active in the programme; and delivering actionable information to customers on how they are using energy and ways in which they can reduce their energy use and save money.
 
National Grid’s sustainability hub in Worcester will continue to operate for customers and the larger Worcester community. Since opening in autumn 2013, the hub has provided more than 6000 visitors with hands-on education about sustainability, smart grid technologies and energy efficiency.