In a previous post on advanced metering infrastructure (AMI), I looked at how distribution network operators (DNOs) can unleash new value from their AMI networks by reimaging their capabilities. In this post, I want to shift the focus to energy retailers, for whom the opportunities from AMI could be even larger.
When it comes to driving value from smart meters, energy retailers are in the pole position. In most geographies, smart meter deployments are carried out by the DNOs, yet many of the resulting benefits flow to the retailers. In a handful of markets—such as the UK—retailers are undertaking the deployment themselves, putting them in an even stronger position to secure value.
As with DNOs, the key for retailers to fully realize the potential opportunities is in the ability to make smart use of the data generated. Equipped with this capability, a retailer can tap into a wide and expanding array of use cases.
Perhaps the most obvious of these use cases is helping to improve energy efficiency by enabling customers to understand their power usage. Customers find this a highly attractive offering—it helps them reduce their carbon footprint while also saving them money on their energy bills.
For the energy supplier, the benefits go even further. Providing customers with usage information derived from AMI enables retailers to engage with them in a regular, positive and proactive way. Historically, customers have often engaged with their energy suppliers only to resolve issues—a problem with a bill or because they’re switching to a different energy provider.
However, providing customers with insights that help them to improve their lifestyles, feel better about themselves and save money elevates the relationship to a whole new level. What’s more, there’s a genuine reason for regular interactions and touchpoints between retailer and customer, and a real way of providing a differentiated offering for customers.
Many energy retailers are moving to maximize the resulting business benefits, such as by providing apps and portals through which customers can compare their usage with peers and track it over time. Also, by combining data on weather patterns and customers’ consumption at a granular level, the energy supplier can see when customers are using more energy and alert them to issues; for example, perhaps they’ve inadvertently been leaving their water immersion heater on overnight.
Get usage data under a 30-minute level, and the possibilities continue to increase. Aside from opportunities to advise customers on reducing energy usage, there are also implications in areas like healthcare. For example, a trial is currently underway in the UK that’s using smart meter data to monitor the behavioral patterns of older people and detect early warning signs of dementia.
A further hot spot of opportunity from AMI data is the growing adoption of electric vehicles (EVs). Smart meter networks can be instrumental in managing and optimizing EV charging infrastructure; for example, EV manufacturers could bundle the lifetime cost of vehicle recharging so it isn’t included in the customer’s general power bill. EVs also open new revenue streams for energy retailers, such as by partnering with EV automakers to supply all power for their vehicles.
And then there are the potential benefits in operational efficiency and effectiveness for retailers. Having granular smart meter data makes it easier to detect theft and reduce non-technical losses. It also opens the way to customer prepayment models akin to those used with mobile telecoms and transport, enabling customers to check and top up credit on their smart meter remotely at any time.
All these opportunities from AMI are available to energy retailers today. But they’re just the start. As digital infrastructure improves and expands, and technologies outside the industry such as the Internet of Things (IoT) become increasingly pervasive, the potential use cases for AMI data will continue to proliferate. The results will include ever greater benefits for customers—and ongoing transformation for energy retailers, as they move to an ever more central role in their customers’ lives.