Big Data Means Big Energy Savings
By Jim Madej
In the past few months, Tesla has announced to great acclaim the sale of a new home battery as well as a microgrid in a box. At the same time, the cost of photovoltaics – the guts of solar panels – has dropped precipitously and is trending in that direction well into the future. In other words, what is driving energy headlines is the hardware that will drive our nascent energy revolution.
What isn’t garnering as many headlines is the software and the information that will help drive the hardware. That’s big data. Less shiny and tangible perhaps, big data – collections of information so large that only advanced analytical systems can make sense of them – has of course gained traction in a growing number of industries in recent years, including the energy sector.
Information and analytics will be critical to achieving our shared economic and environmental goals, especially given the urgency of climate change. Bringing American energy into the 21st century is imperative – and an incredible opportunity.
How big is the opportunity? Consider this – the U.S. is dead last among developed nations when it comes to energy productivity. Shockingly, the U.S. wastes more energy than it uses. A whopping 57 percent of the energy flowing into our economy is simply wasted as heat, noise, or leaks. Even China, a so-called developing nation, ranks ahead of the U.S. Analyzing and understanding where, why, and how this waste occurs and finding ways to fix the problem is – you guessed it – a job for big data.
To encourage the types of data-driven insights and behaviors needed to achieve meaningful economic and environmental advancement, the Commission on National Energy Efficiency Policy – formed through the Alliance to Save Energy – has called for a doubling of U.S. energy productivity and efficiency by 2030.
Of course, the cost of doing this will be significant, but the return on investment will be enormous. According to the Utility Analytics Institute,[1] the industry is poised to invest more than $2 billion on its data infrastructure over the next 12 months. And that is in addition to the more than $2.5 trillion the International Energy Agency estimates the industry needs to invest by 2035, most of it to replace aging equipment.[2]
Achieving this 2030 goal would add 1.3 million jobs to our economy, boost GDP by 2 percent, and reduce carbon emissions, as well as oil and gas imports, by more than 30 percent. All in, that would free up more than $130 billion in savings that could be dedicated to other societal needs.
Achieving these goals will not be easy. With the help of big data, here’s how we will get there.
First, we must outfit and update our energy infrastructure with the steel and software necessary to collect and analyze the required data. This calls for a greater level of sophistication around data collection and analysis, as well as a broader set of information than might have been considered in the past. We need not only performance and consumption statistics, but also behavioral and demographic information – and with them the ability to ensure customer privacy and data protection.
Second, we must invest in the capabilities needed so every customer – whether they‘re large or small, residential or commercial – understands how they can support energy savings and provide an environmental upside.
The goal is to provide customers with the right information and present it in ways so it can be used immediately to make smarter energy consumption decisions. Using big data to improve energy choice, applications, and management will be a game-changer in terms of energy efficiency and economic growth.
Last, energy companies should shoulder increasing responsibility for conserving energy and addressing climate change. To support the necessary investment, an innovative regulatory framework is needed – one that rewards companies for providing economic and environmental benefits and penalizing them for falling short.
Measures such as the Energy Savings and Industrial Competitiveness Act of 2015, sponsored by U.S. Senators Rob Portman (R-Oh.) and Jeanne Shaheen (D-N.H.), passed in April, and signed by President Obama, will aid this effort.
Energy’s use of big data may seem abstract and future-focused. However, real progress is being made at a number of companies across the U.S. These investments are improving operational efficiency, reducing the cost of energy for our customers and helping protect the environment.
At National Grid, here are a few ways we’re bringing the advantages of big data to work for our customers and communities:
- Our “smart grid” pilot program, recently launched in Massachusetts for 15,000 customers, will employ web-based thermostats and meters connected to the grid to provide customers with real-time data on energy use, as well as price signals to encourage conservation.
- Our participation in the U.S. Department of Energy’s Green Button initiative provides customers with energy consumption data in a new, nationally standardized format. Customers can access data showing how and when they use electricity, compare their use with that of others in their area, and better understand how they can reduce their consumption.
- Our Home Energy Reports partnership with Opower, a cloud-based software company, has helped National Grid’s 3.5 million customers save enough electricity to power a city of 200,000 for a year.
These measures, of course, are just the beginning. We’ve demonstrated in the last decade that our energy efficiency programs – smart, effective policy – work with time, focus, and of course, large doses of information. We now need to capture the full potential of information to help deliver our energy future sooner rather than later.
James Madej is senior vice president and chief customer officer for National Grid in the US..
[1]Source: “Utility Grid Barons Warm to Big Data’s Power,” by Jonathan Berr, special to CNBC.com, July 14, 2014: http://www.cnbc.com/id/101823030
[2] Source: International Energy Agency, World Energy Outlook 2012 (in 2012 dollars)
