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CBI energy conference 2011 - Jon Bentley
 

CBI energy conference 2011 - Jon Bentley

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Presentation by Jon Bentley,

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    CBI energy conference 2011 - Jon Bentley CBI energy conference 2011 - Jon Bentley Presentation Transcript

    • Jon Bentley – Smart Energy Lead, IBM United Kingdom Limited14th June 2011How can we encourage smarter energydemand? © 2011 IBM Corporation
    • IBM | Smarter PlanetSmarter Energy Demand:What do we mean by it?Why do we need it?How do we get it?2 © 2011 IBM Corporation
    • IBM | Smarter PlanetWhat do we mean by “Smarter Energy Demand”?Savvy: More sensible use of a scarce and expensive resource Cut usage, waste, cost … and the need to build more capacityIntelligent: Usage choices better matched to supply challenges Emissions, peak, variability … reduced need for excess capacitySmart: Dynamic responses to supply availability and mix Time of use shift, foregone demand … resilience and balanceAll of the above3 © 2011 IBM Corporation
    • IBM | Smarter PlanetA period of extraordinary change … 32% 2016 47 GW of UK electricity to come from UK electricity demand will exceed of new generating capacity renewable sources in 2020 to the capacity of present power required by 2020 to meet demand meet climate change targets(1) up stations, delayed only until 2020 and renewable targets with only from 7% in 2010.(2) by plants under construction.(3) 9 GW under construction.(4) 9% 18% £233.5bn of people are correctly aware of Increase in electricity required for required by 2025 to upgrade plans to introduce smart meters, 1/3 of Britain’s passenger cars to Britain’s power infrastructure 14% incorrectly state there are no be EVs, requiring equivalent of 8 equating to £8,977 for every plans, and 77% don’t know. (5) new nuclear reactors.(6) household in the UK(7). Sources: (1) DECC renewable energy consultation; (2) Renewables International: UK energy statistics for 2010-2011 (3)(4) BERR Energy Markets Outlook; (5) IBM UK Consumer Survey 2010; 473 respondents; (6) IBM analysis; (7) Ernst & Young Study / IBM Analysis4 © 2011 IBM Corporation
    • IBM | Smarter Planet… bringing complex and inter-related challenges Integrating Maintaining Limiting more variable security of increases in supply supply cost of supply Increasing Curbing Meeting customer demand peaks emissions engagement and growth commitments5 © 2011 IBM Corporation
    • IBM | Smarter PlanetWhy do we need Smarter Energy Demand?Increasing supply – building more plants and burning more fuel –to meet unconstrained demand is no longer sustainableMarginal changes in demand – waste avoidance, voluntaryefficiency measures and consumption cuts – to reduce the need fornew supply will not be enoughSmart solutions to managing demand – dynamic and time-of-daypricing and active demand management - will be neededThese will require market reform, smart technology, customerengagement and collaboration6 © 2011 IBM Corporation
    • IBM | Smarter PlanetWe must use all the levers we have to meet a challenge of this scaleSecurity of electricity supplyParliamentary Group for Energy Studies – February 2011 2010 2020 2050 Demand growth: ~345 TWh ~400 TWh ~555 TWhAverage increase over 2010 Demand: +16% +61%Typical information driven change: 6-10% reduction – before tail-offafter 6(?) monthsOlympic Peninsular Automating Home Power Usage Trial (2006,IBM / PNNL) – 10% reduction in bills, 15% reduction in averagepeak and 50% reduction in critical peaks7 © 2011 IBM Corporation
    • IBM | Smarter Planet How do we get Smarter Energy Demand?8 © 2011 IBM Corporation
    • IBM | Smarter PlanetSenior UK energy company executives clearly believe they shouldbe doing more to influence customer behaviour Qu 8A: Should energy companies be doing more to shape consumer behaviours? 2% 11% Yes, a lot more Yes, a little more 55% No, doing enough now 32% Dont know Source: April 2011 Utility Week Survey commissioned by IBM. Web interviews with 47 managers, senior managers and directors of energy companies, 65% with > 10 years in the industry9 © 2011 IBM Corporation
    • IBM | Smarter PlanetEnergy company executives favour price / tariff mechanisms andeducation programmes Qu 8B: If yes, then what should they be doing? Limit energy available to individuals 10 Fine over use of energy 20 Encouraging micro generation 44 Subsidies and incentives for insulation 46 School and community programmes 54 Encouraging switching to green tariff 63 Widescale education programmes 66 Price incentives for energy reduction 76 Source: April 2011 Utility Week Survey commissioned by IBM. Web interviews with 47 managers, senior managers and directors of energy companies, 65% with > 10 years in the industry10 © 2011 IBM Corporation
    • IBM | Smarter PlanetGlobally, energy customers respond to cost outcomes more thancost drivers and significantly more than environmental issues Percent of respondents that would be likely to change their energy usage patterns based on specific influences To save money 62% To decrease dependence on 55% imported energy NB: Impact of To strengthen the countrys US, China 51% economic future and Japan To reduce the consumption 51% of natural resources To reduce new oil and gas 43% exploration To reduce environmental 43% impact To forestall future power 36% plant construction Influence of family 32% Influence of friends 18% ! 0% 10% 20% 30% 40% 50% 60% 70% Source: IBM 2011 Global Utility Consumer Survey. 17 countries 8118 individuals; Sample Size = 6045 (Group I and Group II only).11 © 2011 IBM Corporation
    • IBM | Smarter PlanetThe young care more about the environment and what friends aredoing whilst the economic and financial concerns increase with age Differences in likelihood of changing energy usage patterns based on specific influences, compared to that for the 18-24 year old age group 45% Achieving national energy independence 38% 18% 36% Saving money Economic, financial, 28% and resource concerns 11% become rapidly more 27% Improving economic future for nation important with age 19% -2% 21% Reducing consumption of natural resources 20% 9% 4% Avoid new power plant construction 3% 0% -2% Family is doing it 7% 2% -5% Friends doing it -6% Influence of environmental concern -3% is much higher among younger -31% consumers, and friends play a Reducing environmental impact -31% -28% slightly bigger role in what matters -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% Percent deviation from responses of 18-24 year olds 25 - 44 45-64 65 or older Source: IBM 2011 Global Utility Consumer Survey12 © 2011 IBM Corporation
    • IBM | Smarter PlanetMore understanding and awareness of energy topics is stronglycorrelated with willingness to adopt new behaviours … Percent of respondents expressing their likelihood of taking on specific behaviours or behavioural changes Knowledge of energy topics 80% 75% No or Minimal 67% 69% Knowledge 70% Moderate 58% Knowledge 60% 52% 52% 48% Strong Knowledge 50% 43% 42% 40% 30% 20% 10% 0% Willing to share Likely to change energy Likely to actively information on energy usage patterns to leverage new usage achieve goals information about consumption Source: IBM 2011 Global Utility Consumer Surveyc Source: IBM 2011 Global Utility Consumer Survey Sample Size = 6045 (Group I and Group II only); population-weighted.13 © 2011 IBM Corporation
    • IBM | Smarter Planet… but customer knowledge is poor across all behavioural profiles,with little variation across age groups High Decision-Making Initiative Taken Frugal Goal-Seeker (FG) Energy Stalwart (ES) Percent of respondents that did not know the 22% 20% answer to the specified question or statement 80% Passive Energy 77% Ratepayer (PR) Epicure (EE) 33% 24% 72% Passive 70% 64% Ratepayers Disposable Income Available for Energy Choices High 58% 60% What hope for 55% Energy 50% time-of-use pricing? 48% 45% Epicures 44% 41% 40% 37% 34% 29% 31% Frugal Goal- 30% 27% seekers 21% 20% 18% Energy 10% Stalwarts 0% Meaning of $/€ per kWh What "renewable What a "time of use What a "smart meter" is (or equivalent) energy" is pricing" is Source: IBM 2011 Global Utility Consumer Survey Source: IBM 2011 Global Utility Consumer Survey Sample Size = 6045 (Group I and Group II only).14 © 2011 IBM Corporation
    • IBM | Smarter PlanetCustomer views of energy companies are not an ideal platformfor the collaboration and innovation required … Understands me and offers Treats me like an individual and Approaches me with innovativeproducts / services that are aligned delivers a personalized products or services with my needs experience Banks 21% Banks 26% Telecom 23% Providers Grocery Grocery Online 20% 16% 21% Retailers Retailers Retailers Online Telecom 17% 16% Banks 16% Retailers Providers Telecom Insurance Grocery 16% 14% 14% Providers Providers Retailers Insurance Online Pay TV 10% 13% 12% Providers Retailers Providers PayTV Pay TV Insurance 9% 9% 9% Providers Providers Providers Utility Utility Utility 6% 7% 6% Providers Providers Providers …levels of trust and service satisfaction must be increased15 © 2011 IBM Corporation
    • IBM | Smarter PlanetHow do we get Smarter Energy Demand?Individual provide information to inform choiceSociety create mass pressure for behaviour changeCollaboration change the relationship between utility and customerMarket use price signals and incentivesSystem automate via smart grid and appliances Building trust is key to all of these actions16 © 2011 IBM Corporation
    • IBM | Smarter Planet Thank you www.ibm.com/think/uk17 © 2011 IBM Corporation