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FEATURE6 April 2016

Energy policy turns to technology and ‘nudge’

Behavioural economics Energy Features UK

How the campaign for smart meter roll-out, Smart Energy GB, has used behavioural science to encourage householders to adopt smart meters as part of their energy use. 

Using science to inform policy and influence human action isn’t a new idea. It’s arguably been going on since the dawn of civilisation and the invention of government. What is new, however, is the interaction of computer technology, data and behaviour. Here, we are only just beginning to unlock incredible potential. And nowhere is this potential greater, perhaps, than in the field of energy. 

Smart Energy GB, the campaign for smart meter roll-out, recently held a behavioural change summit Energising Consumers which brought together leading experts BIT’s David Halpern and economist and journalist Tim Harford, with a contribution from President Obama’s behavioural science team at the White House.

Changing behaviour around home energy use has been a thorny policy challenge for as long as any of us can remember. As a nation, we certainly need to make more efficient use of the power we generate and reduce emissions. Households need to be empowered to save gas and electricity to cut their energy bills.

But standard economic incentives (cost and price) have less effect than we might imagine when it comes to switching to a cheaper supplier or reducing kilowatt hours. Energy isn’t a consumer product in the conventional sense. We don’t buy energy for its own sake but for what it can deliver: heat, light, TV, video games and transport.

Energy always seems to be one step removed from the things we actually care about and enjoy. In itself, energy isn’t particularly interesting or fun. Technology is now available, however, to encourage us all to engage a little more and, crucially, to act.

Over the coming years, every home in Britain will be offered a smart meter. These meters will come with displays which show household energy use in pounds and pence. Smart Energy GB has been investigating what form smart ‘nudges’ could take in empowering people.

David Halpern, head of the Behavioural Insights Team, told us that policy sometimes uses the E.A.S.T. formula for successful interventions: easy, attractive, social & timing.

  • EASY – smart meters must make energy use easy to understand showing an accurate and up to date bill in pounds and pence.
  • ATTRACTIVE – the design of the smart meter displays can be attractive (and will evolve over time). The data from smart meters could even be used playfully and turned into games that can involve the whole family in energy use.
  • SOCIAL – we know that social norms can change behaviour around energy use. If we’re told that people in our town or street are saving up to £X on energy, we are much more likely to act to change our own use. Smart meter data open up this potential.
  • TIMING – behaviour change policy works best when the timing is right at the correct moment in an individual’s life. When moving house or doing up your home, you’ll be much more receptive to energy saving messages. 

Eventually, the technology will be clever enough to understand better what makes people tick and how we live our lives in our diverse nation.

But in the meantime, the smart meter roll-out gives us the opportunity to test and refine many different theories – bringing us ever closer to a world where consumers are truly energised.

Claire Maugham is director of policy and communications at Smart Energy GB

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