“We were in a unique position to provide enormous value… we knew we needed to go beyond our business as usual approach”
That’s how Dr Helen Rogers described the Australian Bureau of Statistics’ effort in the immediate response to Covid-19 during the first webinar of our Foresighting Forum 21 series.
And to drive that response, what needed to happen?
“Enormous goodwill across sectors. Collaboration”
Above everything else in her engaging presentation this is what struck me the most.
Not just the idea we wanted to prosecute and open up for discussion: That in times of convulsive change it is critical to engage with consumers and their behaviours and social practices – paying close attention to how they use energy and how that use is changing.
But also something else. The sense that to rise to the challenges of a moment we need to first recognise the moment, then grasp our unique opportunity to do something valuable.
And then we need to come together with that intent in mind and find ways to collaborate and share.
We were thrilled at the uptake for the first webinar in our 2021 Foresighting Forum – more than 265 registrations. But even more exciting was the composition of that audience.
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A healthy attendance from academics and researchers across many of Australia’s leading universities. Representatives from market bodies and regulators, more than a dozen retailers and most of the nation’s largest network operators. A healthy number of public sector decision makers and people in government from jurisdictions across the country. Community organisations and consumer advocates.
Seeing this mix of people having this kind of conversation was inspiring to me. It speaks to a growing realisation that all actors across the energy system can and want to do better when it comes to engaging with the consumers who the system exists to serve.
Because we couldn’t find time to discuss all of the questions we received during the webinar, we’ve asked the Digital Energy Futures team to answer them in writing below. The results are well worth reading.
The presence of so many from across the energy sector shows us that there is a hunger to engage differently with consumer behaviours and social practices.
But the experience of the Digital Energy Futures team suggests we have a long way to go. Their project – unique in the world – started with a desktop survey of more than 60 reports that have hypothesised about future energy use and usage patterns.
Then, of course, the team spent time painstakingly interviewing a diverse range of energy consumers in their homes. They found trends, usage patterns, needs and expectations that were quite different from the assumptions still driving thinking about how the future energy system could be planned and operated.
What did we, at Energy Consumers Australia, get out of the discussion? I’ve laid out a few points below. Following that, you’ll find the questions you asked during the webinar, along with the newly provided responses from our generous panellists.
We’re casting too narrow a net when we look at energy behaviour
Shocks to the system can change behaviour and these changes can be temporary or permanent. This was the takeaway from Dr Helen Rogers’ presentation. It struck me how much the energy system intersects and overlaps with other complex systems when it comes to human behaviour and social practices.
Dr Rogers spoke about mental health changes during Covid. Was this relevant to the energy system? You bet! Tracking anxiety levels (as she outlined) is not something the energy sector commonly does. But it’s not hard, for example, to imagine how nervousness around returning to public transport (which the ABS recorded) feeds into a larger number of people working from home and therefore impacts on future usage patterns and loads.
Nor is it hard, as Dr Kari Dahlgren and Dr Yolande Strengers noted, to see how anxiety around air quality is a significant driver of uptake of air purifiers and dehumidifiers – smart devices that could potentially be part of spiking demand during a future fire event.
It’s important to stop looking back at historical trends when planning for the future energy system. But beyond just looking forward we also need to look wider.
As Dr Strengers said:
“To bring together energy sector visions and technologies with all these other changes that are going on in the home… the gig economy, the platform economy, meal delivery services … in the transport sector there’s massive changes going on there … there are all these other things going on, and finding a way of incorporating stuff that traditionally wasn’t in the purview of the energy industry into energy sector planning is the challenge.”
Knowledge doesn’t always guide behaviour
It’s a common refrain across the energy sector. If only consumers could be educated about what is in their interest, or conditioned to respond rationally to price signals or other sticks and carrots, then everything we believe about markets achieving the optimal outcome for consumers would be achieved. Unfortunately, while clear credible information is critical for consumers, markets in the real world don’t conform to economic textbooks and people have a range of motivations, capabilities and opportunities that can lead to behaviours that system planners or operators have not contemplated or factored in.
When the DEF team shared different load profiles with households they were surprised that they did not find deeper knowledge about, for example, in what circumstances solar production decreased.
“Even once learning that, they realised how difficult it would be to change their routines and kind of gave up,” Dr Dahlgren said of her research participants. “It was a good lesson that knowledge doesn’t necessarily translate into behaviour.”
There are many inputs that influence the decisions people make around energy, Dr Strengers noted. Air quality data, weather, or other cues. People aren’t always economically rational. Or consistent. Or compliant.
“How can the energy sector use these other inputs to achieve what the energy system needs?” she asked. It’s a great question.
Automation isn’t the whole answer
It’s tempting sometimes to believe that smart appliances and the internet of things will be the answer to all of our load-shifting questions and will help achieve a perfect balancing act between more volatile supply and flexible demand. But while increased automation does make things like load shifting, demand response and even curtailment more possible it’s not necessarily that simple.
Dr Dahlgren noted that in the Digital Energy Futures team’s research most people preferred manual load shifting to automated controls. They were happy to take advantage of working from home to do their laundry in the morning and let it dry in the afternoon but less interested in automatising those processes.
“People tended to prefer manual flexibility and manual shifting over automation,” she said.
And when appliances were “smart” – say air purifiers – their automation wasn’t always tuned towards balancing the energy system. On a hot smoky day, with a need to reduce demand, most of those air purifiers would be automatically activating, triggered by diminishing air quality.
So where is the gap? What new tools do we need?
It’s clear that, as leaders and decision makers in the energy system there is serious room for improvement and much incentive to get better at understanding consumer behaviour and social practices. So where to now? What might we work towards? At the start of the webinar we asked participants to consider where the gaps were when it comes to understanding of consumers and planning for the energy future.
In the Q&A that follows below, the Digital Energy Futures team give their answer.
Australia lacks a strategy to identify emerging issues and consumer concerns, and understand why some interventions are more productive than others. This gap undermines the potential of demand management to cost efficiently support the operation of the grid, and makes it harder to accurately forecast future demand … Tracking key emerging issues nationally and longitudinally would improve the efficiency and impact of consumer research. Building up a national body of research that is accessible to all energy system stakeholders could properly inform network, regulatory and policy approaches.
Or, as I put it during the webinar:
“What we know is that the past isn’t a good guide to the future. What you need is observation. You actually need to be collecting this information… You need observation of what consumers are thinking, saying and doing… Then we need to revisit our thinking about whether the available energy system infrastructure is fit for purpose … Judgements will need to be made and scenarios tested … when you have some idea about what the gaps are in how the energy system will function in a new normal then as a feedback loop you need to engage with consumers. How much are they willing to adapt and change or will the system also need to adapt and change?”
Your questions: Answered
Below are many of the questions, submitted during the webinar, that we didn’t find time to answer. The Digital Energy Futures team have kindly agreed to provide their responses in writing.
Audience Q: What is the biggest change we have seen to household energy behaviour during the pandemic?
Audience Q: As consumers were using more energy at home during the pandemic did you find in discussions increased concern or awareness about the impact this would have on bills?
A: Many households were at home more in winter during the pandemic and were concerned about higher energy bills. With multiple family members using multiple rooms at the same time, this could especially increase the use of heating and entertainment or study appliances. Extra food preparation and refrigeration appliances contributed in some homes. Some households were exploring ways to manage their energy use for heating, through more efficient appliances (if they could afford them) or using the home in ways that allowed them to heat a smaller area.
Other households found the complexities of life during lockdown (home schooling, work from home, keeping family members comfortable, stress etc) really needed their immediate attention and energy issues could not be a priority concern under these circumstances.
Audience Q: What does your work say about where people will charge EV’s in the future? At work or home?
A: During the COVID-19 pandemic, our research found that charging at home intensified for many devices. Many households envisage continuing to spend more time at home, and therefore charging electric vehicles at home in the future. Participants generally did not see it as viable to charge electric vehicles at work now or into the future, as a result of increased working from home, as well as concerns about the lack of charging infrastructure at their workplaces. For an elaboration of these findings, please refer to our Future Home Life report where we discuss 8 trends for ‘Charging and Mobility’ (pages 34-49).
Audience Q: How many participants had smart meters? and how many of them use real time functions to know their use cost?
A: All of our participants in Victoria had smart meters, whereas only some of our sample in New South Wales did. There was little use of real time functions – very few had coupled their smart meters with data displays but access to smart meter data did not necessarily translate to cost concerns or use of smart meter data for managing energy costs. Households interested in energy data still often prioritise comfort and lifestyle. Those households who prioritise saving energy rarely depend on smart meter data insights. For more information see page 128 of the Future Home Life report.
Audience Q: Is the project looking at when energy is consumed by time of day in addition to overall changes in consumption? Were the consumers who were practicing load shifting actions connected to time of use (ToU) tariffs?
A: As per our findings in previous research projects, most households remain uncertain about the structure of their electricity tariff, despite concern about rising energy bills. A few were aware they were on a ToU tariff and made minor shifts in response, but most households rejected ToU tariffs as something around which to organise their daily activities because they see only minimal savings and have other priorities. We saw greater interest in shifting activities in response to a desire to self-consume solar generation. For more information see pages 121-126 of our Future Home Life report.
Audience Q: Do we need to ensure some form of minimum set/standards to ensure we do not create inequity across the community?
A: It is crucial to take the diversity of energy consumers into account. There is and will continue to be a digital divide and disparities in access to energy technologies and initiatives to reduce bills and manage usage. These inequities are important considerations for energy policy and consumer-oriented initiatives. For further information, please refer to the Principles in our Future Home Life report. For instance, in Principle 9 we describe how “Policymaking, regulation and industry standards will need to accommodate a continuing and possibly widening divide between digitally-enabled households and those who cannot access increasingly digitised lifestyles or new energy technologies, or prefer to preserve less tech-dependent home lives.” (page 149).
Audience Q: What are some drivers for people swapping from gas to electricity?
A: Interest in converting away from gas appliances was a response to a desire to reduce overall energy costs (principally by cutting the daily gas supply charge), make greater use of solar PV production, reduce the use of carbon-intensive gas, and eliminate health risks associated with gas appliances. For more information, see page 127 of the Future Home Life report.
Audience Q: Do you believe the uptake and use of new appliances in households is a permanent shift in consumer behaviour or rather a short-term response to the pandemic?
A: Taking findings from energy-relevant research conducted at one point in time into longer term research is important to properly understand the trajectory of the trend.
Some smaller devices are likely being used for more short-term interests during the pandemic, like some specialised cooking appliances. However, we also see renovations and substantial investments (such as second kitchens, outdoor entertaining kitchens, freezers and fridges) that are likely to stick around and have longer-term impacts on energy use because they reflect larger trends towards increased investment in the home.
Audience Q: For those households that were responding to bushfires, do you think those behaviours will persist?
A: This is likely to depend on various factors including how directly each household was impacted by the bushfires, for how long, and their previous experiences and preparations for bushfires. Those who have been directly impacted by the threat of bushfire are more likely to implement lifestyle, housing and technology changes to reduce vulnerability in the future (e.g. to secure access to electricity during a crisis).
Although not directly threatened by bushfires, some households experiencing persistent bushfire smoke for the first time took up technology trends in persistent ways. For example, they adopted air purifiers to reduce smoke in their homes, then discovered other benefits that encouraged ongoing use throughout the year and, in some cases, purchase of additional purifiers for more rooms.
Other households looked into buying air purifiers but held off for a range of reasons including lack of availability, uncertainty about quality, and hopes that the severe bushfire season was a ‘one-off’ that would not impact them again. However, they intended to pursue air quality management strategies if their home is significantly impacted by smoke again in future years (see page 65 of Future Home Life report).
We also saw a trend around replacing evaporative cooling with split system air conditioning, partially in response to bushfires and increasing concerns about controlling indoor air. Households are unlikely to ‘go back’ once they’ve made this shift and investment (see page 66 of Future Home Life report).
Audience Q: The most striking thing for me is how little consumer research and insight is undertaken by regulators on many topics in energy. Where it exists, it often seems to be ad hoc rather than ongoing research programs. A more sustained, substantial approach could help to identify emerging issues, develop and test potential regulatory interventions, and then assess their effectiveness.
Audience Q: How can the energy sector better understand what is in consumers’ long-term interests and deliver services in line with this national electricity/gas objective? What approaches/methods can be used to break away from current practices?
A: There is definitely a need for national research to better understand a range of energy topics. Australia lacks a strategy to identify emerging issues and consumer concerns, and understand why some interventions are more productive than others. This gap undermines the potential of demand management to cost efficiently support the operation of the grid, and makes it harder to accurately forecast future demand.
There is much value in research conducted at the local or network level, and conducting research at key points of disruption. However, tracking key emerging issues nationally and longitudinally would improve the efficiency and impact of consumer research. Building up a national body of research that is accessible to all energy system stakeholders could properly inform network, regulatory and policy approaches.
Please look out for the forthcoming Digital Energy Futures report on Demand Management Opportunities as a coordinated national consumer research agenda is a key element.
Audience Q: What do consumers want and expect further into, or dare we bravely say on the other side of, energy transformation?
A: On the whole, households consider it logical to transition the energy system to renewables but they often don’t realise how quickly this transition is progressing.
There’s so much conflicting information in public debates around energy infrastructure and policy that households often perceive a lack of planning and action. As a result, it’s rare to find anyone who is already thinking about what may lie on the other side of the transformation. A public-facing plan for the energy system and the transformation would help build confidence that the energy sector is acting in the interests of consumers and the future.