Presentation to RSS LocalGroup at University of Reading12th November 2007

Dr Richard Westoby (SSE)

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Supply:8 million customersgas, electricity, telephone

Distribution: electricity and gas

Generation:2nd largest generation business in UKLargest generator of renewable energy

BackgroundScottish and Southern Energy plc

BackgroundScottish and Southern Energy plc

• Range of green products for customers

including RSPB Energy • Energy efficiency measures saving

customers 7.1GWh• 220,000 homes insulated with grants from

SSE• 560,000 low energy lamps subsidised• Energy Efficiency advice line 0845 777

6633

“..put the UK on a path to cut CO2 emissions by at least 60% by 2050”EU Members have signed up for a 20% cut by 2020 (on 1990 levels)

Energy conservation plays an important role

Energy Efficiency Commitment & Carbon Emission Reduction Target European Directive 2006/32/EC

More understanding is required of behavioural impacts

Advice and billing information Tariffs Metering

BackgroundGovernment Policy

InformationAdditional information on bills including graphs Energy efficiency information Monthly energy usage statements Metering data provided over the web

Price Incentives A Time of Use Tariff which will offer price incentives to shift energy usage away from peak periods An Incentive to reduce energy consumption

Trial OverviewProgramme Scope 1

Metering Smart Metering - with and without Customer Display Units Remote reading from gas meters via the electric meter Current Cost customer feedback devices Token free ‘Pay as You Go’ for electricity prepayment customers

A range of remote meter communication systems

Trial Overview

Programme Scope 2

Government AgenciesBERR - project sponsors Ofgem - project administrator

External AdvisersCentre for Sustainable Energy - Ofgem AdvisersSSC at Reading University - SSE Statistical AdvisersCARBs Team at Reading University IBM – SSE Project Management

Questionnaires (Face to Face)Natcen

Meter and Display Manufacturers / Comms providers Ampy Horstmann / Technolog GE Energy / Nuri TelecomCurrent Cost Vodafone Orange

Metering Data Management and Web Hosting Accenture

Pay As You GoAmpy / Logica / Paypoint

Trial Overview Involved Parties

Trial Overview

Perth andAlyth (Community)

Newport andSt Athan (Community)

Basingstoke andNorth Leigh (Community)

Surveys, Sample Groups&Experimental Design

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Total number of customers involved in the project = 28,000

The project is split between 79 trial groups

An energy advice leaflet and three versions of additional energy advice

tariff variations available for over 4,000 customers

400 in depth face to face surveys (before intervention and after one year)

Over 4,000 self-completion surveys (before intervention and after one year)

Control groups comprise 5,500 customers

approximately 8,000 to get smart meter installation

approximately 5,000 to receive real time “Current Cost” display

1,430 in community trials

SCALE OF THE PROJECT

Sub-divisions within each intervention

High, Medium & Low Usage

Mosaic Classifications (11 Groups)

Payment Methods (Direct Debit, Cash/Cheque, Pay-as-you-go)

Fuel type (Electricity only or Electricity & Gas)

Different levels of trial awareness & commitment

CUSTOMER GROUPS

Smart Metersenergymadebetter

Smart Meters

Smart Meters

Smart Meters

Smart Meters

Smart Meters

Real Time Display Pilotenergymadebetter

Real Time Display Pilot

Real Time Display Pilot

Additional Information

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Time of Use Tariffs and Efficiency Incentives

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Customer response to more sophisticated price messages are a key economic benefit.

International experience in customer trials is encouraging.

Technology allows very complex tariff structures but customers require simplicity.

Time of use tariffs should shift demand patterns reducing costs (particularly network costs).

Time of use tariffs may also help reduce the overall level of demand.

A separate efficiency incentive to reduce overall demand will also be tested.

Tariff Incentives in General

Alternative tariff is designed to be revenue neutral for typical usage pattern.

Customer will get benefit of savings but will not be required to pay more on alternative bill.

Weekday and Weekend rates will vary.

Charges will be set at a higher rate in “Winter” (Nov, Dec, Jan & Feb).

Charges will be highest in the hours around tea time and lowest at night

A sample of customers will be able to claim a refund for a reduction in consumption.

The impact of the different types of tariff intervention will be decomposed.

Tariff Incentives in the SSE Pilot

Community Trialsenergymadebetter

The communities

Three communities

One in each of our areas

North Leigh - Witney Oxfordshire

North Leigh Energy Efficiency Project

Alyth – Perthshire

Climate Action Town Project

St Athan - Welsh community

CONCLUDING COMMENTS

WHAT NEXT ?

Complete delivery of the programme

Collection of survey and usage data

Analysis of data

Policy implications from results

ANY QUESTIONS ?

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