Presentation to RSS Local Group at University of Reading 12th November 2007

1. energy made better Presentation to RSS Local Group at University of Reading 12th November 2007 Dr Richard Westoby (SSE)

2. Background Scottish and Southern Energy plc Supply: 8 million customers gas, electricity, telephone Distribution: electricity and gas Generation: 2nd largest generation business in UK Largest generator of renewable energy

3. Background Scottish and Southern Energy plc • Range of green products for customers including RSPB Energy • Energy efficiency measures saving customers 7.1GWh • 220,000 homes insulated with grants from SSE • 560,000 low energy lamps subsidised • Energy Efficiency advice line 0845 777 6633

4. Background Government Policy “..put the UK on a path to cut CO2 emissions by at least 60% by 2050” EU Members have signed up for a 20% cut by 2020 (on 1990 levels) Energy conservation plays an important role • Energy Efficiency Commitment & Carbon Emission Reduction Target • European Directive 2006/32/EC More understanding is required of behavioural impacts • Advice and billing information • Tariffs • Metering

5. Trial Overview Programme Scope 1 Information • Additional information on bills including graphs • Energy efficiency information • Monthly energy usage statements • Metering data provided over the web Price Incentives • A Time of Use Tariff which will offer price incentives to shift energy usage away from peak periods • An Incentive to reduce energy consumption

6. Trial Overview Programme Scope 2 Metering • Smart Metering - with and without Customer Display Units • Remote reading from gas meters via the electric meter • Current Cost customer feedback devices • Token free ‘Pay as You Go’ for electricity prepayment customers • A range of remote meter communication systems

7. Trial Overview Involved Parties Government Agencies BERR - project sponsors Ofgem - project administrator External Advisers Centre for Sustainable Energy - Ofgem Advisers SSC at Reading University - SSE Statistical Advisers CARBs Team at Reading University IBM – SSE Project Management Questionnaires (Face to Face) Natcen Meter and Display Manufacturers / Comms providers Ampy Horstmann / Technolog GE Energy / Nuri Telecom Current Cost Vodafone Orange Metering Data Management and Web Hosting Accenture Pay As You Go Ampy / Logica / Paypoint

8. Trial Overview Perth and Alyth (Community) Newport and St Athan (Community) Basingstoke and North Leigh (Community)

9. energy made better Surveys, Sample Groups & Experimental Design

10. SCALE OF THE PROJECT • Total number of customers involved in the project = 28,000 • The project is split between 79 trial groups • An energy advice leaflet and three versions of additional energy advice • tariff variations available for over 4,000 customers • 400 in depth face to face surveys (before intervention and after one year) • Over 4,000 self-completion surveys (before intervention and after one year) • Control groups comprise 5,500 customers • approximately 8,000 to get smart meter installation • approximately 5,000 to receive real time “Current Cost” display • 1,430 in community trials

11. CUSTOMER GROUPS • Sub-divisions within each intervention • High, Medium & Low Usage • Mosaic Classifications (11 Groups) • Payment Methods (Direct Debit, Cash/Cheque, Pay-as-you-go) • Fuel type (Electricity only or Electricity & Gas) • Different levels of trial awareness & commitment

12. energy made better Smart Meters

13. Smart Meters

14. Smart Meters

15. Smart Meters

16. Smart Meters

17. Smart Meters

18. energy made better Real Time Display Pilot

19. Real Time Display Pilot

20. Real Time Display Pilot

21. Additional Information energy made better

24. energy made better Time of Use Tariffs and Efficiency Incentives

25. Tariff Incentives in General • Customer response to more sophisticated price messages are a key economic benefit. • International experience in customer trials is encouraging. • Technology allows very complex tariff structures but customers require simplicity. • Time of use tariffs should shift demand patterns reducing costs (particularly network costs). • Time of use tariffs may also help reduce the overall level of demand. • A separate efficiency incentive to reduce overall demand will also be tested.

26. Tariff Incentives in the SSE Pilot • Alternative tariff is designed to be revenue neutral for typical usage pattern. • Customer will get benefit of savings but will not be required to pay more on alternative bill. • Weekday and Weekend rates will vary. • Charges will be set at a higher rate in “Winter” (Nov, Dec, Jan & Feb). • Charges will be highest in the hours around tea time and lowest at night • A sample of customers will be able to claim a refund for a reduction in consumption. • The impact of the different types of tariff intervention will be decomposed.

27. energy made better Community Trials

28. The communities • Three communities • One in each of our areas • North Leigh - Witney Oxfordshire North Leigh Energy Efficiency Project • Alyth – Perthshire Climate Action Town Project • St Athan - Welsh community

32. CONCLUDING COMMENTS WHAT NEXT ? • Complete delivery of the programme • Collection of survey and usage data • Analysis of data • Policy implications from results

33. energy made better ANY QUESTIONS ?