Clever Uses For Smart Meters

[Derek_Parkinson]

Smart meter systems – technologies that collect, report and analyse fine-grained energy consumption data - are here to stay. Many companies qualify for the Carbon Reduction Commitment (CRC) on the basis of their consumption through half-hourly meters, and although many of these may not be especially smart, they represent the beginning of a move in all industry sectors towards more sophisticated ways of measuring energy use.

Many CRC participants aim to boost their league table position with Early Action Metrics (EAMs), and here too smart meters play a part. In the first year of the scheme, rewards for early action will be split equally between achieving Carbon Trust Standard accreditation, and voluntarily installing smart meters that cover at least 90% of their energy consumption.

But smart meters have a strategic significance that goes beyond minimising the reputational risks of a company's poor position in the CRC league table. The old adage tells us that we can't manage what we can't measure, and applied to the present context, it tells us we won't be able to integrate the cost of carbon into our business processes if we can't record and analyse data for our energy usage. Therefore, data from smart meters will be a vital ingredient in an effective low carbon strategy.

From raw data to useful information

But turning that data into something meaningful and usable may not be an easy matter, and removing the barriers will almost certainly need the company-wide view and authority that comes with board-level backing. An obvious pitfall will be integrating the data into systems used by a company for financial reporting and analysis. “Kilowatt hours doesn't mean a lot to most people, so the data has to be converted into a simple, understandable format. But putting it into fiscal terms could be where things fall down,” says Steve Barlow, Principal at the London offices of Environ.

“The systems used by the finance director may be structured differently to those used to monitor smart meters, and a lot of these packages don't marry up very well with each other. A company's fiscal year may not be the same as its carbon year – which runs from April to April. If so, an obvious question will be – are your systems for the fiscal year able to cope with the split?”

There may also be “people issues” as well as “systems issues” to deal with, says Barlow. “You may find that at the local level if managers aren't on top of things the quality of the data can be patchy. And when that is fed up the line you haven't a chance of an accurate picture. You should look at this as a global issue, rather than leaving it to chance, hoping that people at the local level are doing the right things.”

Making the data relevant to everyday life can motivate significant changes in behaviour, says Neil Fright, Managing Director of Evolve Energy. “How do you integrate the data into management processes? Part of the problem is that no-one knows what 'good' looks like at the moment. The data has to be made relevant. We have seen how the CRC league table is motivating companies, so one thing you could do is set up your own league tables internally. You can get some behavioural change just through competition,” he says. Applying imagination to the way data is presented may also bring benefits. A striking example is provided by Nike, where initial lack of enthusiasm was overcome when energy data was combined with sales figures to produce a new metric that rewarded Nike staff for lower consumption as well as higher sales.

Decisions affect the whole business

Previously, the kind of information provided by smart metering systems would have fallen under the responsibilities of technical directors or facilities managers, or possibly directors leading the corporate social responsibility agenda, says Neil Fright. But increasingly it will be the finance director who takes an interest in this aspect of a company's performance. “We're starting to see this now. I think it's the impact of the Carbon Reduction Commitment – in many cases the chief executive will have picked up the latest annual report and looked at the page dealing with emissions or energy, thought it looked a bit woolly and said to the finance director 'Right. From now on that's your job.'”

Good quality information is vital for effective business decisions that will affect the whole company, says Steve Barlow of Environ. “All companies will have to think – how do I mitigate my carbon emissions? Do I install efficiency measures? Will I have to pay for my carbon?” But even putting aside issues such as reputation and regulatory compliance, the business benefits of having better quality data on energy consumption can be significant, he says. “There have been some spectacular billing mistakes from incorrect meter readings. For example, if you get a gas reading that mixes up cubic meters and cubic feet you will have a thirty five-fold error!”

Benefits of a strategic approach

Getting to grips with energy management can have longer-term strategic benefits too. An example is an approach being developed by BT, which will see its in-house system offered as a service to large customers such as government bodies. Its Building Energy Management System (BEMS) is being installed in the first BT sites and will be extended to some 2,000 buildings. BEMS will be used to remotely monitor and control heating, cooling and lighting, delivering at least 7% savings over time.

According to the company it has installed smart meters covering 99% of electric consumption and smart gas meters will cover 99% of its gas consumption by the end of 2010-11. Integrating the data from these into BEMS will enable the company to make significant improvements in energy efficiency. For example, during February this year, data analysis of 128 sites showed that 48 sites had boilers running outside normal office times, and 24/7 in some cases. In future, the control of sites will be managed through BEMS, with an automated control process and a dashboard of red-amber-green status reports for all buildings.

“There will be potential to expand this control network to provide outsourced energy management services to customer sites. We are in discussions to develop a partnership with Wipro to provide the control layer for BT and to jointly market energy management services to customers,” says the company.

Key questions:

 What plans have we made for integrating our reporting systems?
 What is the most effective way to engage staff on energy management?
 How can smart meters contribute to longer term strategic objectives?