Non-network solutions are increasingly used to ensure reliability during peak demand events, requiring network distribution businesses to engage with customers to reduce load. By understanding consumer household decision-making and electricity use, CitiPower Powercor created insights to engage customers with messaging, solutions and tactics to maximise participation in peak demand events.

CitiPower supplies power to a 157 kilometre square area across the Melbourne CBD and inner suburbs.

Electricity is distributed in the region via a network comprising over 7,500km of wires, supported by more than 58,123 poles and associated infrastructure.

Residential households account for 83 per cent of CitiPower’s 343,000 customer connections. Its network also supports a diversity of commercial and industrial customers, including 51,000 small businesses.

Powercor distributes electricity to 835,000 customers across the western suburbs of Melbourne and through central and western Victoria to the South Australian and New South Wales borders.

Electricity is distributed in the region via a network comprising over 88,400km of wires, supported by more than 577,420 poles and associated infrastructure.

Residential households account for 86 per cent of connections. Its network also supports 11,200 medium, commercial and industrial businesses, and 106,500 small businesses.

From April 2018-February 2019, CitiPower Powercor embarked on its Energy Partner project, with the goal of increasing registration and participation in network-initiated demand response (DR) programs.

A CitiPower Powercor spokesperson said that non-network solutions are about managing the ‘peaks’ in the most efficient way possible.

“Historically, to manage such high energy loads on constrained parts of the network, major infrastructure like zone substations would need to be upgraded at great cost to consumers – all to manage just a few hours of high demand.

“Instead, programs such as Energy Partner allow us to manage those demand peaks much more efficiently and help avoid those costly upgrades that will go underutilised 99.9 per cent of the year.

“By identifying high-usage customers in the areas of potential network constraints, we can then optimise our outreach to households, further reducing the cost of customer acquisition for our programs.”

A personalised approach

Customer engagement strategies are considered immature in the electricity sector, with communication channels and messaging broadly targeted without tailored value propositions or segmentation to maximise event participation.

The Energy Partner project team engaged CitySmart to examine household personas within its service areas and overlay those personas with electricity load profiles.

“CitySmart is a social enterprise that works with Energy Consumers Australia and helped them develop household energy personas for tariff research in 2016,” the spokesperson said.

“CitySmart partnered with Queensland University of Technology (QUT) to provide statistical analysis and deep insights using behavioural econometrics.”

QUT qualitatively surveyed customers to identify persona alignment, subsequently overlaying these personas with customer load profiles to apply load profile archetypes.

QUT also administered quantitative surveys and undertook a statistical analysis of results – descriptive analysis of measures, reliability and validity testing of self-report scales, significance testing and segmentation analysis using two-step cluster analysis.

The networks engaged with the Royal Automotive Club of Victoria (RACV) as a channel partner to help support the mixed methods research conducted by QUT.

Collaboration with RACV was sought to leverage the member organisation’s brand reputation and awareness to drive customer outreach and engagement in the research.

“QUT provided the technical and academic acumen to ensure robust research outcomes. RACV supported this project in customer outreach to survey on both quantitative and qualitative assessments,” the spokesperson said.

This analysis was then tested through focus groups and customer outreach to determine the most effective messaging and channels to drive DR event performance among different household types.

Making the messaging count

The research provided CitiPower Powercor with a number of insights around consumer household decision-making and electricity use -information that is all crucial in enlisting the help of customers during peak demand events.

“We broke down the total kilowatt-hours used by 70,000 customers and compared it to their time of use. This provided us with some great insights into where our marketing efforts should be targeted,” the spokesperson said.

“We can also break down customers into lifestyle segments, to which we can tailor messages and increase uptake and performance.

“By correlating load profile ‘types’ with lifestyle segments, we were able to demonstrate clearly how attitudes lead to behaviour in relation to electricity choices.

“In one striking example, we found that 30 per cent of usage at a certain point in time comes from just 0.3 per cent of households – so a fantastic group to target with specific messaging.”

The spokesperson also commented that having an established relationship with customers is critical to achieving marketing cut through.

“Once customers hear about the benefits, the conversion rates are quite high. The primary barrier is the initial communications and conversion in the marketing funnel.

“For utilities this is particularly challenging as we do not, historically, have a strong relationship with end-use residential energy consumers.”

A positive result

Energy Partner received funding through the Australian Energy Regulator’s (AER) Demand Management Innovation Allowance mechanism, which provides distributors with funding for research and development in demand management projects that have the potential to reduce long-term network costs.

The mechanism also incentivises distributors to share their knowledge and understanding of innovative demand management projects.

The program has delivered the following outcomes, all of which have the potential to benefit the wider industry:

  • Detailed understanding of customer motivations, preferred communications channels, drivers and barriers to uptake for demand response/demand management programs
  • Segmentation of energy consumers by communication channel, energy use and messaging will drive registrations and event participation
  • A methodology for prioritising “high value” households for both controlled load and behavioural demand response programs to reduce the cost of customer acquisition

The CitiPower Powercor spokesperson said that application of the research has been extremely successful.

“Energy Partner is just one of a number of demand response programs where we applied the learnings from the CitySmart/QUT research.

“For example, after segmenting households into five usage types, based on load profiles, we were able to determine what percentage of our customers fitted each ‘type’ –and which households were the best target to reduce peak demand.

“Forty per cent of households fitted into a category we determined to have a high evening peak use, making them an attractive group of customers to target for any demand response program.”

Charlotte Pordage is Editor of Utility magazine, a position she has held since November 2018. She joined the team as an Associate Editor in October 2017, after sharpening her writing and editing skills across a range of print and digital publications. Charlotte graduated from Royal Holloway, University of London, in 2011 with joint honours in English and Latin. When she's not putting together Australia's only dedicated utility magazine, she can usually be found riding her horse or curled up with a good book.

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