Effective Data Management Helps Demand Response Programs

Data startup helps US utility boost participation in its energy management program.
Published: Thu 03 Apr 2014

The installation of millions of smart meters in recent years has seen a major influx of data and utilities are still struggling to harness its potential value.

The “big data” that smart meters are providing is only valuable when it is used to its full potential otherwise it is largely useless.

Data overwhelms utilities

It seems that the ability to collect and analyse data effectively has overwhelmed utilities and regulators worldwide. Processes that were designed for a business run on paper billing and planned excess capacity are no longer useful as they lose their effectiveness. Today, new business processes are required for increased interactive usage and distributed generation.

Data analysts and data start-ups find themselves competing with established business service providers that are rushing to gain a better understanding of raw data and how it can be properly used through effective analysis.

Companies across all sectors are beginning to understand how best to leverage the heavy volume of data that may be available. It is becoming an increasingly important factor of production like labor and capital, and companies must know how to use it effectively. According to McKinsey & Co, by 2018, the US could face a shortage of 1.5 million managers that know how to use big data analysis to make decisions.

Gaining data-driven insights

Pacific Gas & Energy (PG&E) is one company that is taking action. They have recently partnered with a data startup, Gridium, to gain data-driven insights. The startup is taking the insight it has into customer priorities and matching that to generator priorities as market rules and operating realities transform. The startup has recently partnered with one of the largest US utilities, PG&E. Based on an analytical overview of the California energy provider’s customers, the company developed a targeted marketing campaign for the utility which saw an improved participation in a major energy management program.

According to Gridium co-founder and CEO Tom Arnold, demand-side management program marketing is often “felt to be wasted” but he points out that analytics and segmentation can greatly enhance these programs.

Changing consumer behaviour

California power tariffs enable customers to save money by limiting use during certain peak energy use events. These kinds of initiatives have been in place around the country for years, but adoption has always been rather limited. Mr Arnold explains that is because the conversation about tariffs at commissions and in utilities is far-removed from the reality on the ground-that is, consumers want to know how much they can save. If consumers are not going to change their behavior, then the program will not have as much an impact. Gridium has access to information which will impact consumer buying decisions – costs. By connecting the dots between costs and energy usage, Gridium and PG&E could potentially change consumer energy consumption behaviour.

Now that the number of demand side management program participants have increased, Gridium’s next step is to assist PG&E’s customers through peak energy use events.

The installation of smart meters is set to accelerate and provide ever more detailed information to a wide variety of firms and customers in energy and beyond. Companies like Gridium will be providing the next level of analysis and engagement based on that data to help companies and regulators move forward with segmenting, prioritizing and putting into action their plans and objectives based on data-driven insights.

In our article, Data Analysis is Providing New Efficiencies, we discussed how data analysis is also helping utilities to create a more holistic picture of their business-it reveals trends when it comes to asset management, predicts asset health, manages manpower requirements and provides real-time and future predictions.

Data analytics is playing a significant role in how utilities move their businesses forward in the future.