SAVE (Solent Achieving Value from Efficiency) Report 1 - Lessons learnt on Energy Efficiency & Behavioural Change Document Ownership Approved by: Andrew Perry Head of Section, Market & Policy Development DNV GL - Energy Approved by: Nigel Bessant Project Delivery Manager, Future Networks Scottish and Southern Energy Power Distribution Version Control 1.1 Public version 1.0 Published 0.1 Final draft SDRC Report Specification Produce report on UK and international efficiency project findings and the Criterion impact on the SAVE project, including recommendations and key suggestions to improve the project design and implementation Evidence Present findings in the form of a written report to Ofgem Date June 2014 Lessons Learnt on Energy Efficiency & Behavioural Change For Southern Electric Power Distribution (SEPD) as part of the SAVE (Solent Achieving Value through Efficiency) project Report No.: 1.0, Public Rev. 1.1 Date: 25/09/2014 Project name: SAVE DNV GL Energy Report title: Lessons learnt on Energy Efficiency & Behavioural Energy Advisory Change Palace House Customer: SEPD 3 Cathedral Street Contact person: Andrew Perry SE19DE Date of issue: 25/09/2014 London UK Project No.: 16011042 Organisation unit: Energy Advisory Report No.: 1.0, Rev. 1.1 Document No.: 1.0 Reference to part of this report which may lead to misinterpretation is not permissible. 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No. Date Reason for Issue Prepared by Verified by Approved by 0.1 23/05/2014 First issue PC, AP, SB, SK, AP AP DH,TL, AP, AK 1.0 27/06/2014 Final submission to Ofgem PC, AP, SB, SK, AP AP DH,TL, AP, AK 1.1 25/09/2014 Public version PC, AP, SB, SK, AP AP DH,TL, AP, AK Table of contents 1 EXECUTIVE SUMMARY ..................................................................................................... 1 2 INTRODUCTION .............................................................................................................. 3 2.1 The SAVE project, Energy Efficiency and Behavioural Change 3 2.2 The 6Es Framework adapted 3 2.3 Methodology 5 2.4 Limitations 6 2.5 How to read this report 7 3 KEY BEHAVIOURAL CHANGE LESSONS FOR THE SAVE PROJECT ........................................... 8 4 REVIEW OF UK AND INTERNATIONAL LEARNING ON ENERGY EFFICIENCY AND BEHAVIOURAL CHANGE ................................................................................................. 16 4.1 Explore 16 4.2 Enable 20 4.3 Encourage 21 4.4 Engage 39 4.5 Exemplify 40 4.6 Evaluate 41 5 APPENDIX I - FOCUS ON NON ENERGY RELATED PROJECTS/CAMPAIGNS ............................ 44 5.1 Messenger 44 5.2 Incentives 45 5.3 Norms 45 5.4 Defaults 46 5.5 Salience 47 5.6 Priming 47 5.7 Affect 47 5.8 Commitment 48 5.9 Ego 48 6 APPENDIX II - FOCUS ON LOW CARBON NETWORK FUND PROJECTS .................................. 50 6.1 Introduction 50 6.2 LCNF Projects with relevant learning for SAVE 50 6.3 LCNF projects viewed through the 6Es and MINDSPACE framework 51 7 APPENDIX III - PROJECT TEMPLATES .............................................................................. 56 7.1 UK 56 7.2 US 94 7.3 Rest of the world 102 8 REFERENCES .............................................................................................................. 111 DNV GL – Report No. 1.0, Rev. 1.1 – www.dnvgl.com Page i Table of figures Figure 1: The 6Es framework adapted ............................................................................................ 3 Figure 2: Overview of the categories of the projects reviewed and the methods used ........................... 5 Figure 3: Customer recruitment and installation journey ................................................................. 52 Table of tables Table 1: Basis of customers’ segmentation for different programmes ............................................... 16 128 Table 2: Total programme budgets, saving goals and achieved savings reported ............................ 42 Table 3: CSE for the Electricity Programmes.................................................................................. 42 DNV GL – Report No. 1.0, Rev. 1.1 – www.dnvgl.com Page ii 1 EXECUTIVE SUMMARY Solent Achieving Value from Efficiency (SAVE) is a Low Carbon Network Fund (LCNF) project that aims to robustly trial and establish to what extent energy efficiency measures can be considered as a cost effective, predictable and sustainable tool for managing peak demand as an alternative to network reinforcement. Given the project’s focus on customer behaviour change, it has commenced with a thorough review of customer engagement in both the energy sector and wider industries, in the UK and internationally, to evaluate which measures have been most effective in terms of motivating behavioural change and which have worked less well. This should ensure that the project can build on previous learning in the field and not repeat previous mistakes. The findings from projects reviewed have been analysed through the Cabinet Office ‘MINDSPACE’ framework that provides a guideline for policies that aim to change behaviour. The project has adapted this framework to use it as a guidline to analyse lessons learned from past reasearch. The trial design for the SAVE project will also use the MINDSPACE framework to help structure the measures it takes. This report begins by explaining the MINDSPACE framework and the methodology for this project review.` Although findings from the projects reviewed are at times contradictory, and the great variety of trial approaches and contexts often makes it difficult to compare their different results, some trends have emerged. These trends are summarised in section 3 into eleven key findings as follows: 1. Customer segmentations should actively assist in targeting campaigns effectively by focusing on differences in energy use, personal values and preferred methods of communication. Customers connected to the electricity distribution network cannot be engaged with as one group; the way in which people react to attempts to change their energy behaviour differs and engagement needs to be tailored appropriately without resulting in prohibitative costs. 2. Customers need to understand how they can reduce their energy usage and be educated appropriately. These can be through a combination of physical equipment, information and advice. 3. Parties delivering messages to customers need to be seen and recognised as both trustworthy and authorities in the subject matter. These attributes are not necessarily found in one entity and partnership between energy companies and trusted groups such as local organisations and community groups can be a way of overcoming this difficulty. Also effective is to allow multiple organisations to deliver messages that are consistent on a theme yet approached from their different perspectives. 4. Financial incentives can be effective but potentially need to be relatively large and impacts are often not sustainable over time; non-financial incentives should also be considered. 5. Normative comparisons between households have been shown to be very successful when based on intelligent like-for-like comparisons and combined with effective messaging. 6. Opt-out designs should be applied where possible as they are typically more effective than opt-in approaches, for example if offering energy advice visits or competitions. 7. Novel and creative techniques for sharing information can be used to effectively capture customer attention. 8. There is a delicate balance to be struck between using negative concepts such as ‘waste’ or ‘loss’ while also making customers feel good about themselves. 9. Customer commitments through setting goals and targets can be very effective to achieve longer-term behaviour change, but often need strong incentives to give them meaning. 10. Leading by example in promoting energy efficiency improves the perception of customers and increases the credibility of the project and its communications. 11. Energy efficiency results need to be analysed within the context of wider factors such as the wider economic and regional context, the number of participants and the level of focus on peak demand. DNV GL – Report No. 1.0, Rev. 1.1 – www.dnvgl.com Page 1 The report goes on to describe the projects reviewed through the MINDSPACE framework describing how projects have used different aspects of the framework and the levels of success they have demonstrated. This includes specific reviews of projects from non-energy sectors, in particular focusing on particularly interesting and creative ways that behaviour change has been successfully achieved, as well as those LCNF projects where domestic customer engagement has taken place. Through creating this report we have found that although many energy efficiency projects have been carried out and have delivered some interesting findings, there is still much more to do to achieve a comprehensive understanding of how different measures affect different types of consumers in different ways and in different scenarios. Many trials have found a core group or customer segment whose behaviour is very difficult to change. Successful ways of engaging with this segment, which tends to be the largest single group, would add significantly to the knowledge base in this area. In order to be effective, approaches will need to draw on successful approaches, perhaps outside the energy sector and trial novel ways of encouraging change. The SAVE project will use the findings from this report to design trials that will add to the knowledge base on energy behavioural change and push existing knowledge further.