on365 see trend emerging for Smart Meters
UK businesses are starting to take practical action to reduce their day-to-day energy consumption from operational plant such as general lighting through to complex data centres.
Cost reductions and looming green taxes are their primary drivers but they are finding the transparency of information required such as when, where and how much energy is used, difficult to achieve. They can easily see their billing meter readings but where does it all go from there? Increasingly, smaller business units are opting for a tendency known as the 'feedback effect'.
on365 is now seeing a trend towards smaller businesses or smaller business units using smart meters that encourage staff to see in real time their energy use. With smaller real estate it is often very easy to see exactly what is causing surges in power consumption or its reduction. Turn off unnecessary lighting and the meter instantly reduces. Increase air conditioning set-point but a degree or two and you get the same effect. This is because the devices provide a very clear real time display of energy being used at a given time.
Feedback effect is similar to people reducing their phone bill because, by its very transparency it clearly identifies which particular user has contributed to the total cost, when and by how much. This tendency has been identified by researchers such as Sarah Darby at Oxford University's Environmental Change Institute (ECI) as the "feedback effect'.
Chris Smith, on365 Sales and Marketing Director comments that: "With the ever increasing cost of energy all businesses are seeking ways to reduce their energy consumption. The new energy taxes due next year under the Carbon Reduction Commitment add even more incentives to the cost conscious. In larger organisations significant investments in sub metering and monitoring systems are being considered. The complexity of their real estate and business process force the larger firms down this route. However, we are seeing something that is equally influential - firms such as supermarkets and high street retailers using tactics like smart devices to highlight to their local managers the amount of electricity they are using in their daily operations. Managers compare the use of devices to looking at a phone bill. It's transparent because you see a breakdown in your costs and therefore, you are more likely to query it and to change your behaviour next time. It just takes a little bit of detective work to correlate changes to what is happening now."
Retailers such as Greggs the bakers, are also incentivising staff to power down equipment when its use is not necessary. However, it's clear that in general businesses have little real insight into their overall power usage. Joint research with Loughborough University into organisations' data centres found that 56% of IT personnel did not even see their electricity bill.
Chris Smith believes that most UK companies resemble the parent that receives an unpleasant surprise when they view household bills. He comments: "The situation is rather like the disgruntled parent viewing their teenager taking over the family phone bill. They are annoyed but the hidden cost of the young person's use of the immersion heater may be far more costly, but the exasperated parent doesn't have any idea of that problem at all!"
In much the same way, new monitoring/management systems are now available that can enable larger companies to get a better picture of their equipment and technology systems' energy uptake. These could be applied to companies' technology infrastructures which are increasingly becoming the biggest consumers of energy in the entire organisation. The costs for the average SMB range form £15-30k with an ROI of often less than 12 months.
It does not make commercial or ecological sense to continue to be lost in the muddy waters of your electricity bill. Furthermore, recently PwC noted that firms which have taken part in the government's Carbon Reduction Commitment (CRC) programme could be at risk of adding an extra five to 11 per cent on their energy bills if their reports are not submitted correctly and on time. The research noted that if people do not hand in their raw electricity and gas figures by July 31st then the regulator can fine them £5,000 and an extra £500 per day thereafter, until it receives the completed documents.
Henry Le Fleming, carbon reporting specialist at PwC, said: "Registration last year was the relatively easy part. Now the hard work begins. Many companies won't have stress tested their processes, systems and controls for gathering the data. "If they have large numbers of sites with shared responsibility for energy bills it could be more difficult than expected." Recently, the European Commission unveiled a report calling for all member nations to set smart meter targets by 2012. It highlighted that if existing grids are not updated then renewable energy opportunities could be compromised and electricity and gas saving chances could be missed. In Britain the government plans to start its smart meter roll-out to SMEs and large business by mid-2014 and nationwide by 2019.