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Ofgem has proposed bringing in real-time software architecture. Image: Getty.
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How real-time data can lower UK energy bills

Ofgem has proposed bringing in real-time software architecture. Image: Getty.

Surging energy prices are sparking outrage. An increase in the UK’s energy price cap will see a £693 average increase in bills that are set to be swallowed up by the consumer. But how did we get here? And more importantly, what can be done to reduce people’s energy bills and the impact on one’s finances?

The rising price of energy can be attributed in part to the economic comeback following the early struggles due to the pandemic. Soaring demand has unfortunately been paired with windless summers in Europe, droughts in Brazil and issues with Russian gas giant Gazprom. Any form of loan or windfall tax, while encouraging, is merely a short term fix.

Smarter meters

For nearly 10 years, there has been a focused push by the UK government on smart meters. Their belief is that the benefits of introducing them to households across the UK will outweigh the costs of delivery and installation.

However, there has been an increasing amount of criticism, which does not lay on the device itself, but on its execution. A smart meter revolution is needed. ‘Non-smart’ meters do not do enough to fully contextualise one’s energy consumption. Consumers will see a number continually rising when looking at their meter, without understanding what it specifically refers to as usage in pounds and pence. This data is therefore of little value, hindering the potential to make positive changes in everyday energy consumption.

The cornerstone of the issue is to solve people’s understanding of how they consume energy throughout the day. This will only be possible with an overhaul at both consumer and company level. If a consumer is better informed on how much energy they are consuming and how much it costs, they can bring an increased understanding as to how their daily habits impact this consumption.

By presenting the data collated by smart meters, say through an interactive display or through a website or mobile app portal, it puts one on notice of their own consumption habits at a much more granular level. If a household can see the varying prices for energy as part of a smart tariff, they can adjust their behaviour accordingly to take advantage, such as deferring the washing machine from one day to another, or charging your car earlier in the day if costs are low before the evening. This example of nudge economics will not only reduce one’s energy bill long term, whilst also allowing for environmental initiatives to be pushed forward.

But how can they have the level of accuracy needed? The answer is real-time data.

Government action

The MHHS Programme is a key enabler to support the transition to net zero, contributing to a more cost-effective electricity system, encouraging more flexible use of energy and helping consumers to lower their bills. The proposal mandates that energy companies provide half-hourly updates from providers on one’s energy consumption. With this directive in place, smart meters will see a boom in efficiency’s sake, allowing consumers and businesses to consume less energy, pushing towards a greener Britain.

However, to feasibly provide this level of insight, it will require the seamless movement of mountains of data between both providers and consumers. Currently, data is given in, typically, daily updates, which means a 48x increase in data volume will be needed when moving to half-hourly. This is an extraordinary bump in total data volume from what is currently handled and existing IT infrastructures are not built to cope with this. And they must deal with the issue sooner, rather than later.

Working in real-time

Real-time data is what happens when a piece of information travels almost immediately the moment the event happens, from the publisher to the consumer. The benefit of this ranges across a plethora of usages; from instantaneously updating the price of a stock to monitoring the flow of air traffic, keeping the skies safe. This is all done in real-time.

As there is no delay in the transmission of this data, it can act as a ‘nudge’ to consumers and businesses to positively adapt their usage towards lower consumption, or even to detect wastage such as a heater being left on in a room longer than intended. In terms of efficiency, this decreases total usage, benefitting both one’s bills and the environment.

Event-driven energy

This is why Ofgem proposes embracing the real-time software architecture paradigm known as event-driven architecture (EDA). This technology is already used in many industries like retail, pharmaceutical/life sciences and aviation to achieve seamless real-time flows of information. Many recognise the need for real-time in order to drive greater value out of their data, with a reported 71% seeing the benefits outweighing the costs of implementing EDA. Thankfully, energy providers have recognised the need for this in lowering prices and powering the race to net zero.

EDA will be the key differentiator for the successful implementation of MHHS. It will allow energy companies to react in real-time to the production, detection and consumption of events, meaning any significant change in the state of energy will be recognised by the software.

From an environmental viewpoint, the race to net zero can be powered by real-time data in a number of ways. Ofgem could then introduce ‘smart tariffs’, to act as an incentive for lower energy usage. When prices are cheaper during certain hours, customers will be made aware in real-time and be encouraged to take advantage of this by shifting their consumption levels. Taking it a step further, this can be applied to connected appliances as well, altering usage patterns to optimise lower costs based on the data fed into the smart meter.

Ultimately, the proposal of encompassing EDA into the energy sector is a welcomed and necessary one. This will be the key driver, long term, for reducing costs on both sides of the coin.

Contributer

Jamil Ahmed Distinguished engineer, Solace

Jamil Ahmed, is a distinguished engineer at data company Solace.

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