Informing the Demand Side: Opening Data Warehouses to Collaborative Applications
As our populations grow in a world of limited resources governments and individuals seek ways to lighten our load on the planet. In the Smart Grid R&D Program, PNNL investigates how modernizing the electric grid can help the US meet its carbon management goals. In The Smart Grid: An Estimation of the Energy and CO2 Benefits, a team from PNNL identify nine mechanisms by which the Smart Grid will reduce carbon emissions by 442 million metric tons, or 12 per cent, by 2030. Making the grid smart will save the nation the equivalent of 66 coal power stations, or enough electricity to power 70 million of today's homes. PNNL’s Smart Grid is probably the largest consumer collaboration underway in the US and this collaboration - addressing the information needs of both supply and demand sides of electricity economics - contributes enormously to the success of the program. Consumers on the grid receive real-time pricing and these signals inform their decisions on how and when they consume electric power. PNNL’s report attributes a quarter of the total saving to the conservation effect of consumer information and feedback systems.
Two PhD students at University of Sydney are pursuing this principle of informing the demand-side to help Australian electricity consumers reduce their electricity consumption - possibly by as much as ten per cent. Technology plays its part: smart plugs record power consumed by individual appliances; GSM networks communicate these data to a point of integration; a web portal provides consumers with opportunities to drill in to their energy use and investigate how they can reduce their power bills. Congratulations to Mahboobeh Mogaddham and Waiho Wong for designing the MyPower Energy Platform and winning the inaugural NASSCOM IT Technical Innovation Award.
The idea of modifying consumer behavior is not new - consider the example of bottles and other beverage containers. Despite the availability of collection bins across much of Australia only 35 per cent of these containers are recycled - except in the state of South Australia. Advice printed on every can and bottle sold in SA notifies consumers they will receive ten cents for every container they recycle, and this combination of information and reward induces consumers to recycle 87 per cent of their containers.
As a discipline, marketing exists to modify consumer behaviour. Working with large consumer packaged goods companies, Catalina Marketing demonstrates the value available from deep analysis of consumers’ purchase histories. Catalina mines massive data managed within Netezza appliances to create online advertising powered by purchase-based targeting and on average lift sales by 22 per cent on each campaign. Building on this, what effects might we see if customers were given access to data warehouses and analytic applications running within our supply chains? New applications could offer customers opportunities to express their preferences, their likes, their dislikes, and this information matched with existing data could help customers to model new behaviors and identify opportunities for them to do the right thing - for our environment and future generations. By extending existing loyalty schemes, retailers could inform us of the food miles created by each shopping basket, offer incentives to buy products using sustainable packaging materials, compare our consumption patterns with others and offer advice on reducing waste. Many of us wish to be ethical consumers and existing data warehouses augmented with a new class of collaborative applications – similar to PNNL’s Smart Grid and University of Sydney’s MyPower Energy Platform – can connect the supply and demand sides of our economies to create long-term value.