This is an edited extract from a presentation delivered today (27 October, 2022) at All-Energy Australia by Wattwatchers’ Chief Innovation Officer, Grace Young. It draws heavily on lessons learnt from the Wattwatchers-led My Energy Marketplace (MEM) project, funded by the Australian Renewable Energy Agency (ARENA)*, which is exploring making consumer-generated electricity data more portable, sharable and valuable.
SNAPSHOT
This post proposes and discusses five key principles for harnessing the power of data for the energy transition, as shared infrastructure that creates value for multiple parties, including consumers, the energy sector, other industries, and the wider society and economy.
- Equity of Access
- Diversity of Data
- Being Digital
- Open and Shared
- Customer First
GRACE YOUNG: CHIEF INNOVATION OFFICER, WATTWATCHERS DIGITAL ENERGY
Wattwatchers was founded on the premise that energy data is a critical building block of the clean energy transition.
We are not alone in this belief.
In an excellent report, Modernising Energy Data, the UK Energy Data Taskforce found this to be true, and more.
As UK MP Chris Skidmore summarised:
“Data is fundamental to the future of our economy, which is why it is the focus of one of the Great Challenges in our Modern Industrial Strategy. In the power sector, it is the key to unlocking system and consumer benefits and managing the fast-approaching challenges of flexibility, resilience and costs in the most effective way.”
Currently we in the energy sector‚ both here in Australia and abroad, lack a strong vision for energy data.
There are dangers lurking in the current state of play, with data locked in proprietary systems, and visions of centralised infrastructure and control, that simply won’t support our collective needs moving forward. It seems we are finding it hard, as a sector, to see beyond the way things have been done in the past, nor recognising the immense potential of energy data outside of the direct needs of our sector.
Here, I propose five key principles as a starting point for discussion. They have emerged out of our experience delivering the My Energy Marketplace project, which is part of our vision for ‘Energy Data as a Service.’ We believe this model addresses many of the challenges facing the sector, whilst also being aligned with consumer rights and goals.
I hope that in sharing these principles, they can contribute to a more productive energy data journey.
Principle #1: Equity of Access
The gist of this principle is to make energy data available to as wide a group of stakeholders as possible. There are a couple of different facets to this Principle, but the two I’d like to highlight are:
- Cost of access
- Avoiding ‘lock out’ of proprietary systems
Let’s look at the first of these… cost of access. One of the key challenges for providing energy data is how we can do this in a cost effective manner. While many different parties can benefit from accessing energy data, presently the costs of capturing and holding that data are usually borne by one party.
It’s a classic split incentive challenge—one that the UK Energy Data Taskforce also recognises:
“It is hard to build a business case for collecting data when costs and benefits are distributed unevenly across many organisations.”
We think a better way to do this is to share the cost of providing energy data across the multiple stakeholders that benefit. To consider this as the ‘pre-competitive infrastructure,’ to borrow a phrase from Michael Porter, rather than the battlefront.
A ‘shared value’ approach opens up opportunities for considered financing models, which could significantly reduce, if not eliminate, those up-front costs.
The second of aspect of Equity of Access is perhaps more nuanced. It relates to data that is generated within proprietary systems, where data is collected for a different purpose (e.g. system operation) and made available under restricted commercial terms.
This is a challenge because, as the provision of data is a secondary consideration, a change in business priorities could easily ‘lock out’ stakeholders that are relying on this data.
This concept is known as a ‘walled garden,’ and we have seen high-profile examples in the digital world (e.g. Twitter and their API, Facebook and their app platform) where a change in business priority has significantly impacted the ecosystem of services built around them.
Unfortunately, this idea seems to be alive and well in the energy sector. This mentality thwarts the broader opportunities this data can provide as a public or ‘common good.’ We are conscious that if this drives a perceived need for further regulation, the results may not be in the best interests of industry nor customers.
Principle #2: Diversity of Data
Look around now and you might be excused for thinking there are only a few types and uses of energy data, say:
- Billing;
- Energy plan switching; and
- Virtual Power Plants (VPPs) for Consumer Energy Resources like household solar batteries.
But there are many, many other types and potential uses for energy-data, including non-traditional use cases in the wider world, rather than the energy one per se.
And not just the raw usage data. This extends to include data, and derived insights, that relate to what I call the ‘energy context.’ For example:
- Weather data;
- Household data about size, occupancy, energy sources, tariff choices and appliances in a premises; and
- Data on DERs installed in the premises like solar, batteries and do they have an EV?
There also are many more potential data recipients and use-cases, if we think outside of the traditional energy sector box.
I explored this theme in more depth back in May this year in a presentation at EnergyNEXT in Sydney (👈🏼that link includes a video replay of the live presentation). Banking and the property sector are obvious examples, but there are many more if we exercise our digital creativity.
We, in the energy sector, really need to be thinking more broadly about such use cases when we are building systems to support the future.
Principle #3: Being Digital
A lot of non-traditional players are ‘digital first’ businesses that are used to data ‘just being available.’ Many new entrants are surprised to learn, when they start working in the energy space, just how difficult it is to access the data that is the lifeblood of innovation and digitally-enabled services.
About seven years ago I migrated from the digital world (software development and User Experience) into energy. And even in that short time, I have often had a feeling that we are unnecessarily reinventing the wheel.
I see a lot of precedents or ‘prior art’ in the digital world that have solved many of the problems we face, and which aren’t exclusive to the energy sector.
And yet, we seem to continue to come up with energy sector-specific systems that require massive investments to support. While at a surface level, we employ digital technologies in the energy space, it seems to me the thinking and perspectives behind them are missing something.
Take online payments as an example. This is a sector (financial services and payments) that, like the energy sector, is heavy in regulations, oversight and governance. Know Thy Customer and PCI compliance, to name just two hefty requirements. And yet, there are successful global platforms like Stripe and Square that solve online payments for many diverse and complex businesses and business models.
These payment services use digital standards in a way that allows developers to integrate in just hours. Consider this in comparison to recently launched or announced standards in the energy sector, where costs to access are estimated to run into the hundreds of thousands of dollars.
I find myself asking: Are the problems faced by the energy sector THAT much harder than what has already been solved for credit card payments?
Another example: considering control of equipment for energy management. The ageing communications protocol Modbus is still widely used for energy solutions. This is a standard designed in the late 1970s (40 years ago) and is still being shoe-horned into solutions in the 21st century, when the technology stack is vastly improved.
Compare this to the new smart home integration protocol Matter, now being embraced collaboratively by technology giants—and unlikely bedfellows—like Apple, Amazon and Google, along with many other smaller organisations. This protocol has only recently launched, yet it is widely expected that compatible products will be hitting the shelves by Christmas. This includes products that control energy consumption.
If we were to embrace such protocols, we are setting ourselves up for a brighter future—for appliances are far more likely to support these new standards than they are energy-specific systems. To make this point plainly: I think it’s far more likely that a customer will be installing a new “Matter-ready” air-conditioner in the next few years—which would, in the right conditions, enable external control—than they will be to install a costly, hardwired DRED controller… Should we not be embracing this opportunity?
So that’s what we mean by Being Digital. Thinking and acting from a digital perspective, not just applying digital technology to old ways of doing things.
Principle #4: Open and Shared
Underlying all of the principles is the one that energy data should be open and shared in the first place. In fact, for Principle #1: Equity of Access we’d argue it’s vital.
The UK Energy Data Taskforce highlights this in their report, noting that energy data should be ‘Presumed Open’:
The Taskforce’s advice reflects ‘open data’ movements around the world, including the Australian Government’s principles for Public Data, which recommends the “release of non-sensitive data should be open by default”. And similarly, The Data.gov principles from the USA also indicate that data should be Public as a starting position.
This, of course, needs to be balanced with privacy and security. One only needs to look at the headlines about the big data hacks affecting Optus and Medibank customers, here in Australia, over the past few weeks. That said, by and large, the security requirements of the energy sector are not that different from other sectors.
There are plenty of existing standards and security models, which are relatively easy to implement, that we could employ to respond to this challenge. Like the tried and proven OAuth, used by the likes of Facebook and Google—and thus used by millions of people worldwide on a daily basis—which makes it easy for a customer to agree to sharing data.
And while the security profile of systems that control devices are obviously higher, to my mind this just reinforces the argument for adopting standards like Matter, which has security and privacy baked in from the ground up. (Matter is based on Apple’s class-leading HomeKit, which employs very stringent controls for privacy and data sharing outside of the premises.)
Principle #5: Customer First
My final principle is ensuring that the customer is the first priority in our efforts to digitise energy. I know, I know… we say this all the time, but I still don’t think we are getting it right.
But, what I am suggesting here is actually a deeper, philosophical question that goes beyond typical discussions of Customer Experience.
There is a clear difference, to my mind, between consumer data being captured by a regulated industry that controls access and requires the data to be provided; and that same data being available with consumer permission, in-built protections, accessible to a range of service providers, both within the energy sector and beyond it.
A real shift in our perspective and our approaches, away from industry priorities and towards customer ones, can have a material effect on how we design solutions. Moving away from a ‘regulatory control’ perspective to one of ‘consumer engagement,’ could result better outcomes for industry and customers.
That’s the theory, what about the practice?
As I noted at the outset of this post, these principles are informed heavily by what we have learnt through delivering the My Energy Marketplace project (the MEM for short). This ongoing project is a living experiment in applying these principles to solve some of the key challenges faced by the energy industry.
The MEM is available today, and at the time of writing provides access to:
- Real-time data
- From 2800+ sites (growing every month)
- In 30 sec and 5 min intervals
- Via an interactive, modern and secure, API
This enables you to test your ideas, develop your technology, or prove your business model, without the cost and logistical hassles of rolling out your own monitoring infrastructure.
That said, we also have subsidised smart energy management packages available if you are wanting to target a deployment to a specific geographic or customer segment.
So contact us if you think that might be a fit for you…
*ARENA ACKNOWLEDGEMENT
The My Energy Marketplace project is receiving funding from ARENA as part of ARENA’s Advancing Renewables Program. The views expressed herein are not necessarily the views of the Australian Government, and the Australian Government does not accept responsibility for any information or advice contained herein.
