Setting DSR up to succeed using consumer insight

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Published: 17th June 2020

Setting DSR up to succeed using consumer insight

One of the greatest challenges in decarbonising our energy system is managing supply and demand as we increase our use of the variable supply of renewable energy that literally changes with the weather. How do we continue to meet the needs of peak electricity demand when the supply of renewables is low or handle excess electricity when demand is low and supply is high?

Where it’s hard to manage the supply, one solution is to try to manage the demand, and that’s where Demand Side Response (DSR) comes in. Whilst this approach has huge potential, we’re not there yet, especially in introducing these solutions to the domestic energy market which has the 2nd largest demand for energy in the UK.  Storage of excess energy for release at peak times is being explored, making use of batteries, electric vehicles and hot water tanks. Energy tariffs which vary to reflect availability also have potential. These time-of-use-tariffs encourage consumers to shift their energy usage away from peak times and have been shown to save consumers between 2-39% on the cost of their electricity bills when they respond to it.

But what if consumers don’t engage with new energy services because they won’t or they can’t? Perhaps a new service doesn’t address their needs. Or it addresses their needs but doesn’t communicate that in a way that appeals. Unless new energy services appeal to the customer and are accessible to all, the movement to decarbonise the energy sector will be stifled and new technologies and the businesses behind them won’t flourish.

And what if customers do take up new energy services but behave in unexpected ways? The opportunity to decarbonise might not be realised. Similarly, the potential for businesses might not be met. In the example of time of use tariffs, customers might just use more expensive energy or create different peaks where costs are lower. Rather than smoothing energy demand, peaks could remain. Customer bills may go up, harming vulnerable consumers, and this negative experience may turn people away from the service.

So how can we make sure consumers are willing and able to engage with DSR technologies, and that they have a good experience when they do?

This is of course where consumer insight comes in. Broadly speaking, consumer insight involves using research to understand consumers and their energy behaviours better, and user-centred design to create services that fit into their lives.

This presents two benefits to the energy sector. Firstly, consumer research has the potential to drive innovation through understanding consumers, their needs and values better.   Secondly, research and design can ensure these innovations succeed, that products and services work, and that people use them in the ways that they were intended.

Driving innovation through understanding consumers

At a basic level, one way of enabling people to use something is to make sure it’s usable – if it’s not, people won’t use it. But ensuring it has real value for them is the key to making people want to use it. Consumer research helps us understand people better to get insight into their needs and values, driving innovation.

Familiar approaches might include conducting surveys and focus groups. These offer many benefits in understanding consumers. But, to truly understand them we need to go beyond what they say to understand what they really do, observing and exploring how customers actually behave in the real world. At the ESC we’ve been monitoring and observing people’s heating and travelling behaviour for over three years, gaining insight into how they get comfortable in their homes, move around, and why. We’ve begun to build up a picture of what people really value, for instance from their heating: things like wanting to feel the heat coming off a radiator, making sure the bathroom is warm in time for the kids’ bath-time or not wanting to ‘waste’ energy by heating empty rooms.

Understanding what people need and value enables us to design for these needs. Understanding the issues they face in achieving what they value opens the door for new solutions. Observing the way people actually use technologies (rather than what we expected or how they were intended to be used) gives insight into what doesn’t work with existing solutions. It also generates ideas for new products and services that people might really value.

Making Sure Energy Products and Services Work

We’ve already outlined some of the risks of not getting consumer energy services and products right: people won’t use them or use them as intended, and ultimately, they fail. This can be costly to the companies who develop and provide them. There is value in including consumer insight to make sure products and services work as intended, all the way through the development cycle, as ESC’s Method Map sets out.

Product and services can be co-created with consumers during development. What do people think of the ideas? Do they understand the concept? Can they see themselves buying and using it? Do they find early prototypes easy to use? What difficulties do they have?

Of course, the acid test is to see how consumers use working prototypes in real life. That’s why we’ve created a Living Lab at the ESC, a unique real-world trial facility of 100 connected homes, and why we’ve pioneered ways to overlay usage data with consumer feedback. This gives businesses deep insight they can use to optimise their product or service.

The point is to use consumer feedback to help products or services fly when they’re launched. It saves time and money to iron out problems early on in development when they are quick and easy to fix. Small-scale trials can show how things work in practice to guide course-correction in flight. The result is a far lower chance of a costly recall, redesign and relaunch.

Using Consumer Insight to get DSR into hot water

In the USER project, Energy Systems Catapult are working with participants trialling a smart hot water tank to help Levelise and Heatrae Sadia design their Smart Hub service. You can find out more about the consortium of organisations partnering on this project here.

Participants will tell us about their experiences of the AI-led hot water system using a mixture of blogs, diaries and interviews. This work is key to understanding what consumers expect from such a service, how they experience it, and how it works for them. All essential learnings to hone the customer experience and support the wide-scale uptake of DSR services in the UK.

This blog was written by Energy Systems Catapult.

Energy Systems Catapult is an organisation that has been set up to accelerate the transformation of the UK’s energy system and ensure UK businesses and consumers capture the opportunities of clean growth. The Catapult is an independent, not-for-profit centre of excellence that bridges the gap between industry, government, academia and research.