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CUSTOMER ENGAGEMENT Smart billing Enhancing energy efficiency through awareness While smart meters provide granular information which is very useful for the provision of detailed energy consumption reporting, smart billing can be effectively implemented without smart meters being installed. Key examples of this have been demonstrated in Chile, Abu Dhabi and South Africa. Because residential consumers make up an important portion of a utility’s consumption (between 20% and 39%), they are also an essential part of any energy efficiency strategy. However, this is a market that is also perceived as being difficult to reach and engage with. Research, however, would indicate that enhancing utility bills may be an effective and low cost way of increasing awareness of consumption and conservation. As the cost of electricity continues to rise, consumers have been badly hit by price increases – in Europe, but also in places such as South Africa, where electricity prices are set to double, after already having increased by 180% over the past six years. In Chile, prices have gone up by 75% since 2006. Research has indicated that in areas where smarter billing has been implemented, electricity consumption has dropped by 1-2.2% and gas consumption by 2-2.8%. Awareness is an important step toward creating sustainable behaviour, and decreasing cost. However, a smarter bill is not effective in isolation and supporting the initiative must be adequate regulation or on-going education and feedback forums – naturally, countries that support both enhanced technology (smart meter programmes for instance) and regulatory support have exhibited the best overall results in the implementation of smart billing. income on electricity, despite having one the world’s highest consumption levels. Average consumption stands at 71,000 kWh per year (ten times the world average) while foreign households consume a third of this bringing the national average to 41,000 kWh31. The Water and Electricity Authority (ADWEC) forecasts that peak demand will keep increasing by 11% each year until 2015 and between 7% and 8% over the period 2015-2020. Public authorities and the energy industry are trying to find solutions to curb excess electricity consumption. Although the authorities have not mandated smart meters for residential customers, Abu Dhabi’s two distribution companies, Abu Dhabi Distribution Company and Al Ain Distribution Company, are actively deploying them. In addition Powerwise, an energy management agency, was launched in 2011 with the task of raising awareness of energy consumption and promoting electricity conservation among the population. The bill A revamped electricity bill was launched in March 2012 based on traditional meter data and sent to residential customers on a monthly basis. Innovative features of the new bill include normative consumption feedback and the amount of electricity subsidy for the bill. Normative feedback allows customers to realize how much electricity they are expected to use for their property type, and how much above or below this guideline they are. The second feature of the new bill is that it shows the actual cost of electricity as well as the portion of this paid by the government through the subsidy A few key points before moving onto the specific case studies: 1. Billing becomes more effective if bills are received monthly as this keeps awareness of energy consumption high. In Europe, for instance, bills can received quarterly, or even yearly. 2. Key components of smart bills are: a. normative energy consumption; b. tips on how to reduce energy consumption; c. tips on benefiting from TOU or other dynamic tariffs; d. historical consumption; clarity on subsidies (where applicable); e. real cost if the subsidies were not in place; f. an indication of the various elements of the bill and who is responsible; and d. pollution/emissions from billed energy use. Illustrating the benefits of smart billing Abu Dhabi Background With only 20 000 household customers, Abu Dhabi has a small electricity market. What makes this a uniquely interesting and challenging case for promoting energy conservation is that prices are heavily subsidised by the government, effectively eliminating financial incentives for households to reduce usage. Subsidies can be as high as 16% of the real cost of electricity for locals, while expatriates paid less than half that cost. Typically, inhabitants of Abu Dhabi spend only around 0.5% of their annual disposable 40 METERING INTERNATIONAL ISSUE - 4 | 2013