Smart Meters and the Race to Understand Customer Usage
The recent announcement from British Gas in its plans for offering free power on Saturdays to some of its customers with smart meters received a warm welcome, especially after figures compiled by Labour have shown UK’s largest energy groups’ annual profits have increased 73% in the last three years. With wages failing to keep up with the inflation and the cost of living rising, the use of smart meters and money-saving packages offered by the utilities companies may help households cut their costs.
Offering the “Free Power” plan on Saturdays to 600 homes nationwide with the new devices as a trial, British Gas’ intentions are to encourage its customers to use more electricity on the weekends. The energy company has also revealed that it was trialling the “time of use” tariff in parts of the northeast of England as it prepares to launch smart metering packages early next year. British Gas has already installed a million smart meters in the UK, claiming that this number is more than the rest of its competitors has achieved together until this moment.
A smart meter is a new kind of energy meter which will replace the existing ones and send electronic readings to the energy supplier automatically. The roll-out is at an early stage in the UK, but it must reach 53 million homes in England, Wales and Scotland by 2020. This number is far beyond the European directive that asks for 80 per cent of coverage by this date.
However, energy companies should see beyond the numbers and technology and consider all aspects involved in this shift in their operations. The increased focus in new technology deployment might impact their availability to perform maintenance work and repairs at customer’s homes. It is crucial for these companies to learn how to strike a balance with its service level for both types of consumers – the ones with smart meters and the ones without.
Companies should see their smart metering projects as more than a technology deployment, but a customer service exercise. At each deployment, the energy company will need to interact with the customer – book an appointment, show up on time, and explain the new technology and how they can monitor their consumption. This will require investment in training their workforce, making the right resources available to them, and effectively managing their time in the field.
But the advantages of the new device are numerous, both to consumers and to providers. As a smart meter communicates directly with the energy supplier, the energy reading is always accurate and can be more easily monitored, which means that the user will be able to control its own usage. Consequently, it is expected that people will better plan their energy consumption in order to get the best deals and make a more conscientious usage.
On the other hand, the data received by the energy companies can be integrated in their Big Data projects, which will allow them to manage the demand and run more efficiently. As they will now know in real time how much energy is being consumed and at which times they can automatically input this data into their systems to optimize their storage and production.
The adoption of smart meters will also lead to the creation of innovative energy tariffs or tailored plans to fit the consumer’s lifestyle, which British Gas has just started to do. In the race to deploy smart meters to all UK households, the energy groups that can better understand their customers’ usage will hold the competitive advantage.