Consumer awareness and engagement. for energy efficiency solutions. Introduction. Gary Fragidis, Cleopa GmbH. Detlef Olschewski, Cleopa GmbH

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1 Consumer awareness and engagement for energy efficiency solutions Gary Fragidis, Cleopa GmbH Detlef Olschewski, Cleopa GmbH Cite this work as: Gary Fragidis and Detlef Olschewski, Consumer awareness and engagement for energy efficiency solutions, Cleopa White Paper Series, Berlin, May Introduction The EU has set itself a 20% energy savings target by Energy efficiency has to be increased at all stages of the energy chain, from generation to final consumption. The EU underlines the importance of raising awareness about energy efficiency and helping people to change their behaviour. Energy consumers awareness is a first step in adopting energy saving behaviours. Energy consumers need to know, first of all, how much energy they use in their everyday life practices, as well as learn the results of their saving efforts. It seems rational to assume that increasing consumers awareness about their energy consumption may influence (reduce) their consumption behaviour. However, a change of the energy consumption behaviour will not come automatically through awareness. Awareness is a necessary, but not sufficient condition for energy saving. Behavioural change depends on the motivation of the consumers and their engagement, that is the conscious adoption of energy saving practices, which is developed as a result of understanding the importance of energy efficiency and being motivated to begin and continue saving energy. The distinction between energy awareness and engagement can be explained by the adverse behaviour that consumer may have when they reduce their energy consumption, which is known in the literature as rebound effect or boomerang effect. Usually energy consumption awareness is adequate to motivate people to reduce consumption when they consume more than their peers. However, when their own consumption goes below average, consumers very often think they have done enough so far and they do not need save more - or even that they are now allowed to consume more. In this case, energy consumption awareness is not only inadequate to motivate these people, but it may also provide contrary motivation.

2 Understanding what energy consumers want to know, how they perceive and realize energy efficiency and how they can be motivated to improve their energy saving behaviour is very important for the development of energy efficiency behaviours. This paper provides the background for the design and development of services for user awareness and engagement that will be used on the DAREED project. The proposed services will use visualization techniques and social networking. We focus on two major target groups of DAREED project that act as final energy consumers: household consumers and commercial consumers. A household is the smallest organic energy system in a residential area that consumes energy. Commercial consumers are small companies, usually of commercial style or the service sector, that are located and operate in the domestic district and they have in general high energy consumption - comparable in volume to households or even bigger. According to a European Commission report (2007), the biggest cost-effective savings potential lies in residential and commercial buildings. The full savings potential in these areas is estimated to be around 27 % and 30 % of energy use respectively. Energy awareness Energy awareness is related to the knowledge about how much energy is consumed. Without energy awareness, consumers do not know if they need reduce their energy consumption and how to do it. In general, consumers need to know how much electricity they use, when they use it, and how much it costs in time to appropriately impact their monthly bill. As a general rule, the more knowledgeable they are, the more interested they are in adopting energy saving practices and in participating in energy saving policies and programmes. Energy awareness can be developed by the delivery of information and feedback to the energy consumers. The terms information and feedback are often used as synonyms interchangeably in the literature. Typically, information is a general term that is used to describe the transmission or communication of some kind of knowledge concerning a particular fact, event or circumstance, while feedback refers to the return of information about the result of a process or activity that is usually used for the evaluation purposes. Energy awareness systems provide feedback to the consumer for the energy consumption with the objective to encourage energy efficient behaviour, reduce energy consumption and bring economic and environmental benefits to the consumers and the societies.

3 We can distinguish two basic types of feedback: direct feedback and indirect feedback: Direct feedback mechanisms provide energy use information at the time of consumption (or shortly after consumption) and include: real-time feedback, appliance-specific real-time feedback, and simple automation. Indirect feedback refers basically to energy consumption bills. Bills may provide some kind of analysis on the consumption, such as comparative or historical reports, and possibly advice for energy saving; they can use statistical modelling techniques to estimate (and potentially disaggregate) total household energy usage based on a variety of parameters, such as the household type, appliance information and billing data. Indirect feedback can be monthly or weekly (or even daily) and is based on real energy use measures gathered by a utility or third party. Representation to the customer can take place with mailed reports (e.g. monthly bills) or via the web or (especially for shorter period feedback). Major issues with regard to the awareness of the energy consumer are related to the following: Strategies: they are general methods how to provide feedback to persuade users to change behavior. Comparisons: they can take place with historic standards or normative standards Measures of energy savings: they can be related to energy units, monetary units or environmental impacts. Frequency of feedback: yearly, monthly, weekly, daily, hourly basis or on real-time. Representation of feedback: graphical, numeric and textual representations. Disaggregation of feedback: drill down of energy consumption by appliance or space Feedback strategies Antecedent strategies: aim to induce or to restrict user behavior. They include information, goal setting, commitment and modelling. Consequent strategies: inform the user after the behaviour has occurred. They include feedback, reward and criticism. Comparisons A common way of presenting energy feedback is the use of comparisons. Comparisons provide a frame of reference for energy consumption levels. The assumption is that consumers will be motivated to save energy if they can compare their consumption to their own prior consumption or to the consumption of others.

4 There are two basic types of comparisons for energy efficiency: temporal and social comparisons. Temporal comparisons refer to consumption reported relative to the consumption of the same household from a similar period in a past time (e.g. previous week, previous month, etc.). Social comparisons refer to the comparison to some other similar group of households. Comparing the consumption of one household to that of others is said to elicit social pressure to understand why consumption levels differ and to stimulate competition and mutual improvement. Measures of energy savings Feedback on energy use and savings can be provided by the use of different measurement units, such as energy consumption (e.g. in kwh and seldom in kj), cost (in monetary units, such as euro) and environmental impact (e.g. in carbon dioxide emissions in kg, equivalence of trees, etc.). The type of measurement to be used is largely related to the objective pursued or the motivation of the consumer. If the objective is to save energy, then the consumer should become aware of his energy consumption; if the objective or the motivation is to reduce the energy bill, then the critical information is the cost of energy used; if the objective or the motivation is to implement green policies for the improvement of the environment (e.g. reduce greenhouse gas emissions), then the relevant information is the environmental impact. Frequency of feedback Energy consumption feedback can be provided on yearly, monthly, weekly, daily, hourly basis or in real-time. Preferably, the consumer should be able to change and choose the display of energy consumption for the time period of interest. According to Fischer (2008), quick feedback would improve the link between action and effect, and therefore, increase consciousness about the action s consequences. Real-time presentation of energy consumption can give consumers inimitable insight into their energy use, as they can switch appliances on and off and see the effect this has on the total power Representation of feedback The method used to demonstrate household energy consumption feedback affects the way that this feedback is understood. For detailed comparison of ordered sets of data, a tabular format for data

5 display should be used. Graphics, rather than text description or tabulation, have better results to show trends (i.e. relations in time). Vertical bar charts are preferred for comparisons with previous periods. Disaggregation of feedback Disaggregation of energy consumption allows analysing the total/ aggregate household energy consumption into appliance or space specific consumption data. The main methods for doing it are the use of smart meters and sensors or the use of statistical methods. Such a breakdown may give consumers a deeper insight into household energy use. An appliance-specific breakdown has the potential to deliver valuable information to aid understanding of the relevance of individual actions. Energy savings engagement Energy consumer engagement is a broad term that involves consumer interest, motivation, comprehension, evaluation, reflection and personal characteristics. It refers to the environmentally responsible behavior of the energy consumers and the motivation for this. Behaviours related to energy savings can be divided into two categories: efficiency and curtailment behaviours. Efficiency behaviours are typically performed by replacing obsolete appliances with new ones that are more energy efficient or by investing in more energy efficient methods and technologies (e.g. insulation). Curtailment refers to reducing energy consumption, e.g. by turning off lights or appliances when nobody uses them or by lowering thermostat settings. Even though the energy-saving potential of efficiency behaviours is considered greater than that of curtailment behaviours, they may suffer from the so-called rebound effect, i.e. using the new appliance much more than the older one, due to its higher efficiency, which may cancel the saving in energy usage. Goals and objectives for energy savings Consumers may be motivated to save energy if they have a specific goal to attain. For example, a household may have a goal to reduce electricity consumption by 10% compared to the previous month. The goal provides motivation as well as a clear target for the consumers to focus their

6 efforts. Energy saving goals can be set from the consumers themselves or from outside the household (e.g. the energy provider, the building administrator, etc.). A goal should not be too ambitious, to cause frustration, or too easy to be fulfilled, to fail to provide motivation and engagement. When consumers are given an energy saving goal, they should also be given direction, guidelines and advice on how to change their behaviour in order to reach this goal in the most effective way. In addition, households should receive feedback, so that they learn the effect of their efforts, as well as positive feedback that will stimulate their efforts and possibly rewards for improving their energyrelated behaviour. Incentives and rewards for energy savings An incentive is something that motivates an individual to perform an action. The incentive is related to the benefit/ reward or the penalty the consumer expects to gain or to avoid as a result of behaving in a certain way, respectively. Rewards and penalties are a special kind of feedback that does not mean to transmit information/ knowledge, but aims to encourage or discourage certain behaviour. Incentives, awards and penalties can be financial and non-financial. According to the rational choice models, people get in energy savings because they have an incentive for this and they expect to gain a benefit out of this. The European guidelines for energy awareness and engagement The Directive 2012/27/EU for Energy Efficiency suggests metering systems must provide final customers with information on actual time of use. In addition, final customers must have the possibility of easy access to complementary information on their own historical consumption. This must include at least the following information: Cumulative consumption data corresponding to the intervals for which frequent billing information based on actual consumption has been produced. Such data should be made available for at least the three previous years or the period since the start of the supply contract, if this is shorter. Detailed consumption data according to the time of use for any day, week, month and year. Such data should be made available to the final customer for the period of at least 24 months or the period since the start of the supply contract if this is shorter.

7 Conclusions Energy awareness and engagement are complementary concepts in the effort to induce energy saving behaviours. Understanding what energy consumers want to know, how they perceive and realize energy efficiency and how they can be motivated to improve their energy saving behaviour is very important for the development of energy efficiency behaviours. In this report we analysed energy awareness and engagement from a theoretical and a practical point of view in order to gain a better understanding and recognize the requirements, the challenges and the success factors in the development of energy awareness and engagement. Energy awareness is the first step, as energy consumers need to know, first of all, how much energy they use in their everyday life practices, as well as learn the results of their saving efforts. Without precise and detailed feedback on their energy consumption, consumers cannot understand in the first place how much energy they consume in their daily activities and subsequently they do not receive motivation to increase energy savings. Awareness is a necessary, but not sufficient condition for energy saving. Behavioural change depends on the motivation of the consumers and their engagement, that is the conscious adoption of energy saving practices, which is developed as a result of understanding the importance of energy efficiency and being motivated to begin and continue saving energy. Energy consumer engagement is a broad term that involves consumer interest, motivation, comprehension, evaluation, reflection and personal characteristics. It refers to the environmentally responsible behavior of the energy consumers and the motivation for this. This report has been developed as a part of the project DAREED: Decision support Advisor for innovative business models and user engagement for smart Energy Efficient Districts, FP (Collaborative Project) Further information: The Cleopa department of resources and sustainability (CIRUNA) is an active partner in research and innovation projects on national and international level. Your contact partner: Nino Lipinski Further information: