providing consumers with the help they need - airah | home

Power Shift

Providing consumers with the help they need – consumer behavioural insights

What I’ll cover

• What consumers are experiencing in the market now• What the evidence base is telling us about consumer needs and

preferences• Key findings of Power Shift• The frameworks we’ve built to help government and industry

Interim Report Launch October 2016 2

How consumers are faring in the energy market

ACOSS Energy Stressed in Australia 2017

6

Energy Consumers Australia Energy Consumer Sentiment Survey June 2019

7

Energy Consumers Australia Energy Consumer Sentiment Survey June 2019

8

And the market is transforming

Source: The 4 Levels of Autonomous Home Energy Management published on Smart Electric Power Alliance www.sepapower.org 11 April 2019 9

http://www.sepapower.org/

Source: AusIndustrypresentation to IREE, 2017

The impact – households can’t afford the energy they need

Case Study: Mission Australia Get Bill Smart Hobart, TAS

Building our understanding of household decision-making

Interim Report Launch October 2016 11

Power Shift assists energy companies and government to deliver services and programs that help consumers manage their energy use, in particular low income and vulnerable consumers.

Our Power Shift work builds on the data and findings of the Low-Income Energy Efficiency Program, our Energy Consumer Sentiment Surveys and the work we do under our ongoing four research priorities.• Supporting vulnerable households

‐ Including supporting GEER Australia• Capturing efficiency benefits• Making energy easy• Enabling behaviour change.

12

https://energyconsumersaustralia.com.au/projects/consumer-sentiment-survey/

SUPPORTING VULNERABLE HOUSEHOLDS Helping consumers manage their energy usage

Energy affordability critical issue –disconnections / debt are high, andnew solutions are required.Driving Change, the meta-analysisof $56m LIEEP program, identifies effective ways

to help low-income households, including • Most effective interventions• motivations and barriers to energy management • segmentation framework laying out a pathway on

how to design more effective program. 13

Resource Man (Strengers, 2014)

14

Insights• Smart energy technologies embody a rational,

individual and masculine image of the energy consumer: Resource Man

• Reimagining Resource Man might involve embracing and supporting ‘mess’, ‘designing for “slow time’ or designing for other humans and non-humans in the home

Recognising customersHouseholds have a style CITYSMART 2017

Consumer Services in Electricity Markets: A Scoping StudyEnergy management is an urgent need. So why isn’t the market offering it?Findings• System inertia – in incumbents and institutionally• No clear value to companies• No common standards driving interoperabilityRecommendations• Innovation sandbox• Mandated national targets for energy savings and

management• Accelerated implementation of consistent standards

for energy management devicesInterim Report Launch October 2016 16

Power ShiftKey Findings

Effective initiatives = individualized, affordable

• There is no one size fits all solution to encouraging consumers to change their energy consumption behaviour

• Programs and products must be fit-for-purpose, and tailored to meet the varied needs of households

• Where information is provided to consumers in a format and through a communication channel that suits their lives, they will respond positively

• We need to meet consumers where they are18

Consumers are willing to respond, but need tools and information that suits their needs

Evidence base supports action‐ LIEEP participants responsive

to messaging that reflected their needs, and delivered through trusted networks

‐ ECA Energy Consumer Sentiment Survey –consumers are trying to manage their energy, but not confident they have right information and tools

19

In a transforming market, re-building consumer trust is critical

• Consumers are not confident they have the ability to make good decisions‐ Using a trusted voice helped make communications more effective

• New technologies and services have potential to simplify consumer experience, giving them more effective, tailored information and tools - but there are two emerging challenges

1. To ensure new technologies and services reduce complexity, including ensuring interoperability between devices and technologies

2. Ensuring no-one left behind. The elderly, tenants, low-income households and those in rural and regional communities are at risk if they can’t access or afford these services.

20

Energy is critical to health and wellbeing

Poor energy performing homes result in ‐ Higher energy bills for the household‐ Increased mortality rates – more people die in Australia from

cold than do in Sweden‐ Increased allergies and respiratory diseases‐ Higher public health spending

21

Helping government and industry operationalise those learnings

CAPTURING EFFICIENCY BENEFITSBeyond energy and emissions savings

Business case traditionally focuses on energy/emissions where cost-benefit may not encourage actionMultiple Impacts of Household Energy Efficiency : An Assessment Framework enables• Accurate measure of ALL the

benefits of enabling consumers to better manage their energy

• Energy and emissions savings just the start – significant individual and public benefits from improving health and wellbeing 23

Energy system impacts

24

Energy

system

Health &

wellbeing

Other participant

benefits

The overall econo

my

Energy efficien

cy impact

s

Energy system

Utility costs from reduced energy

consumption

Lower retailer costs from reduced

arrears & disconnections

Avoided generation costs

Deferred network investment

Reduced household energy consumption & bill

savings

Health & wellbeing

Avoided health costs related to air pollution from

electricity generation

Reduced CO2 emissions from

energy generation

Health and wellbeing impacts

25

Energy system

Health &

wellbeing

Other participant

benefits

The overall econo

my

Energy efficien

cy impact

s

Health & wellbeing

Improved thermal comfort

Energy system

Reduced damp & mouldReduced household

energy consumption & bill savings

Reduced financial stress

Reduced family tensions & social

isolation

Improved physical healthReduced mortality

Reduced disconnection

costsImproved diet

Reduced private health

spending

Fewer days off work/school

Improved mental

wellbeing

• The number of robust studies from which to draw estimates

Summary of impact framework components

26

Robust methodology

Robust estimates

• Degree to which well established research protocols exist

• The theoretical foundation for the impact and the strength of the supporting empirical evidence

Evidence of causal link

• Relative magnitude of the impact (in programs where impact is expected to occur)

Materiality of impact

• Whether existing estimates are transferable to an Australian context

Transferability of estimates

Use of multiple impacts assessments

27

Input into ex-post cost-benefit analysis

Input into outcomes evaluations Policy

development & design

Input into business cases for energy efficiency programs

To support corporate social responsibility programs

Input into ex-ante or ex-post cost-benefit analysis

To guide policy development and design

Program evaluation

Industry program

assessment

MAKING ENERGY EASYBuilding confidence and trust through information and tools

Evidence base (LIEEP, CitySmart, RMIT et al) point to value of tailoring information and assistance to consumers lifestyle and circumstancesSupporting Households to Manage their Energy Bills: A Strategic Framework provides govt with • Range of actions all households can take to

manage their bills• Groups households with similar needs/constraints• Recommends effective tools and assistance

28

Elements of the strategic framework

29

Choices available to

households to manage energy

bills

Tools and services to

support households

Types of households

(diverse motivations, abilities and opportunities)

Presenter

Presentation Notes

The strategic framework comprises three elements: the range of choices available to households to manage their energy bills the different types of Australian households and their diverse motivations, abilities and opportunities to manage their energy bills the range of tools and services that could support different types of Australian households to make different choices to manage their energy bills. We will discuss each of these elements in turn.

CHOICES AVAILABLE TO HOUSEHOLDS TO MANAGE THEIR ENERGY BILLS

30

Presenter

Presentation Notes

There are six types of choices available to households to manage their energy bills. 1. Choose a better energy deal The retail energy market is now competitive in most Australian jurisdictions. In those jurisdictions, there are a range of energy deals on offer by retailers. Households may be able to better manage their energy bill by choosing a better energy deal. The energy deal may have lower rates, a different structure or different payment arrangements. 2. Choose alternative energy sources Households are increasingly moving away from buying all their energy through their retailer, to generating their own energy through, for example, solar panels on their rooftop and using batteries to store that energy for later use. While the upfront costs are relatively significant, the ongoing costs are relatively low, and the household is able to lower their energy bill from the retailer. 3. Choose to improve the building fabric and fixed appliances Households can reduce the amount of energy that is needed to heat their home in winter and cool their home in summer by improving the building fabric and fixed appliances. Alternatively, households can improve their level of comfort, and their health and wellbeing, by making these improvements and using the same amount of energy. 4. Choose more efficient plug in appliances Similarly, households can replace their plug in appliances with more energy efficient models and reduce the amount of energy that is needed. Alternatively, they can improve their level of comfort, and their health and wellbeing, by making these changes and using the same amount of energy. 5. Choose to change the way energy is used Households can manage their energy bills by changing the way they use energy. For example, they may choose to hang up wet clothes to dry rather than use a clothes dryer, to put on warmer clothes and turn down space heating, or use window coverings to keep the home cooler rather than turn on an air conditioner. 6. Choose to use less energy at peak times If the household is on a retail energy deal where the cost of electricity is higher at certain times of day or has a separate component for the maximum amount of electricity used during peak times, the household can manage their energy bills by using less energy at those times of day. For example, the household could run the dishwasher or washing machine overnight, run only one of the dishwasher, washing machine and air conditioner at the same time in the middle of the day, or set the air conditioner at a higher temperature.

Different types of Australian households

31

MOTIVATION OPPORTUNITYABILITYTYPE OF

HOUSEHOLD

Enthusiasts

Completers

Dependent

Stuck

Middle Australia

Complacent

Competent

Cautious

Hard to help

High- Medium Medium Low - Medium

Presenter

Presentation Notes

We have categorised households based on three dimensions – their motivation, ability and opportunity to manage their energy bills – to identify nine different types of Australian households. The factors that influence motivation include: Attitude towards the behaviour, for example, the perceived costs and benefits, the importance of energy, and cultural considerations Alignment with choices made within the household’s circle of influence Likelihood of success Unwillingness to create disharmony/conflict. The factors that influence ability include: Literacy, numeracy, problem solving and research skills Language barriers Ability to self-advocate, negotiate Belief in the ability to succeed Trust in others Ability to influence behaviour of all household members General interest in, and capability using, technology. The factors that influence opportunity include: Type of housing Home ownership status Scope to manage the energy bill – for example, to choose a better energy deal, to improve the building fabric, to install more energy efficient appliances, to change the way energy is used Access to liquid funds. The factors that are relevant vary by the type of choice that can be made. For example, whether a household lives in rental accommodation is relevant to improving the building fabric but not to changing to the best energy deal. The factors that influence a particular household’s motivation and opportunity to manage their energy bills will vary: for each of the six choices that are available over time. For example, a particular household may be motivated to choose a better energy deal but may not be motivated to choose to improve the building fabric of their home because of the perceived cost. A household may have the opportunity to choose more energy efficient equipment but may not have the opportunity to choose alternative energy sources because they rent their home. For example, a household may have the opportunity to choose a better energy deal, but once they have chosen the best energy deal, they will not have the opportunity to choose a better energy deal, at least in the short term. A household may not be motivated to turn off the air conditioner while teenage children are living at home, to maintain family harmony, but they may be motivated to do so when the children leave home. The factors that influence a household’s ability to manage their energy bills is less likely to vary over time.

32

Tools and services to support households to manage their energy bills

33

INITIATIVES THAT ARE THE MOST APPROPRIATE TO SUPPORT DIFFERENT TYPES OF HOUSEHOLDS

TYPE OF HOUSEHOLD

MO

TIVA

TIO

N

ABIL

ITY

OPP

OR

TUN

ITY

Information, advice and non-financial support Incentives

ENTHUSIASTS

Awareness campaigns; general information; word of mouth communication (technology-based); tools and services

General feedback; incentivise desired outcomes

COMPLETERS

Awareness campaigns, general information, word of mouth communication (technology-based), tools and services

General feedback; incentivise desired outcomes; penalise undesired outcomes

DEPENDENT

Tailored information, word of mouth communication (traditional); access to information by trusted source

Specific feedback; control of devices by third party

STUCK Tailored information, word of mouth communication (traditional); access to information by trusted source

Specific feedback, penalise undesired outcomes; control of devices by third party

MIDDLE AUSTRALIA

Awareness campaign, tailored information; word of mouth communication (technology based and traditional); market based tools and services


COMPLACENT

Tailored information; word of mouth communication (technology based); market based tools and services

Specific feedback, incentivise desired outcomes; penalise undesired outcomes; control of devices by third party

COMPETENT

Tailored information; word of mouth communication (technology based); market based tools and services

Specific feedback, incentivise desired outcomes; penalise undesired outcomes; control of devices by third party

CAUTIOUS Personalised information; word of mouth communication (traditional); access to information by trusted source


HARD TO HELP

Personalised information; word of mouth communication (traditional); access to information by trusted source

Specific feedback, penalise undesired outcomes; control of devices by third party

34

TYPE OF HOUSEHOLD

MO

TIVA

TIO

N

ABIL

ITY

OPP

OR

TUN

ITY Financial support Regulation Support

services

ENTHUSIASTS Schemes; remove barriers

COMPLETERS EPCS; loans Schemes

DEPENDENTMin. performance standards; information provision; technologies; remove barriers

STUCKGrants; subsidies; government investment in public housing upgrades

Min. performance standards; information provision; technologies

MIDDLE AUSTRALIA

Min. performance standards; information provision; technologies; remove barriers

COMPLACENT Information provision; schemes

COMPETENTEPCs; loans; fund community organisations to provide support

Min. performance standards; information provision; schemes; technologies

CAUTIOUS Min. performance standards; technologies; remove barriers

HARD TO HELP

Grants; subsidies; govt. investment in public housing upgrades; fund community organisations to provide support

Min. performance standards; technologies

INITIATIVES THAT ARE THE MOST APPROPRIATE TO SUPPORT DIFFERENT TYPES OF HOUSEHOLDS

Example of a household

35

Presenter

Presentation Notes

The strategic framework comprises three elements: the six different types of choices that households have to manage their energy bills the nine different types of Australian households and their diverse motivations, abilities and opportunities to manage their energy bills the range of tools and services that are appropriate to support each of the nine different types of Australian households to make each of the six different choices to manage their energy bills. The motivations, abilities and opportunities of a household will vary by choice type and over time. This slide and the next provide an example of a household with two young children which illustrates the way in which the characterisation of the household varies by the type of choice that could be made to manage their energy bill. They also identify the types of tools and services that are appropriate to support this household in making each type of choice. Additional examples of household profiles are provided in the report.

Example of a household (2)

36

Theory into action –demonstrating practical solutions

Advocating for better energy performance standards in housing

38

Housing Summit,Sep 2018

Call to Action to COAG Energy

Council, Dec 2018

Consumer Coalition for Healthy and

Affordable HomesFeb 2018

Australian Building

Code Board

Building Ministers

Forum

COAG Energy Council

Trajectory for Low Carbon Homes

Developing effective information and assistance – using the research • Stakeholder consultation: Workshops in Sydney, Melbourne,

Brisbane, Hobart, and two online; as well as tailored consultations in Bathurst and Cairns

• Exemplar products for four target types of consumers (low-income homeowners, first-time renters, indigenous consumers in remote communities, and older people)‐ Delivered through a trusted voice‐ Information on how to reduce your energy usage/bills tailored to

their needs• Tool for policy-makers to guide them through the process

39

Our vision for the market

40

Energy Consumers Australia promotes these three advocacy principles as the basis for better consumer outcomes.

Affordable

Optimised

Individualilsed

Better consumeroutcomes

More information

www.energyconsumersaustralia.com.au/projects/power-shift/

Contact:

Kerry Connors, 02 9220 5511 / 0407 848 572

[email protected]

providing consumers with the help they need - airah | home

Documents