Project Summary

The project addresses Challenge 1 'Supporting a Just Transition' by working with low-income households and those in vulnerable circumstances to ensure they are not left behind in the energy transition, as well as UK Power Networks' RIIO-ED2 commitments to better identify and support financially vulnerable consumers. It will result in energy network innovation associated with:

• The connections process and how DNOs could use this to improve asset performance and widen consumer participation; and
• The development of mechanisms to identify poor Low Carbon Technology (LCT) performance that risk financial penalties to households and dis-benefits to the network.

The partners bring the following experience:

• UK Power Networks has delivered multiple initiatives to better identify, understand, and support consumers in vulnerable circumstances, and recently made the strategic decision to locate the Consumer Vulnerability team within the innovation function, to drive more innovative projects.
• The Centre for Sustainable Energy (CSE) supports low-income households with their energy needs and low carbon retrofit; and delivers digital innovation tools to help consumers engage with the energy market.
• The Sustainable Energy Research Group's (University of Southampton) work uses integrated engineering and social research approaches to unravel the socio-technical factors affecting home energy system outcomes.
• Sedgemoor District Council has set-up Somerset Independent Plus, a vehicle to accelerate housing improvements and has delivered programmes installing LCTs for low-income and fuel-poor residents.
• Portsmouth City Council has some of the highest rates of fuel poverty in the South of England. Their own monitoring suggests that some LCT installations achieve sub-optimal performance, potentially increasing both network load and customer/council energy costs.
• Hackney Council is an inner-city borough seeking innovate solutions for smart local energy including a local Green Homes Programme and Community Energy Fund.

The project meets potential user needs as follows:​

• DNOs could develop innovative solutions/propositions to identify and reduce the performance gap for grant-funded LCTs, enabling delivery of energy demand reduction and demand flexibility solutions.
• Suppliers, aggregators and tech providers will have insight into how the socio-technical performance gap affects customer uptake and use, enabling development of new consumer offerings.
• LAs/housing providers will achieve more effective use of grants guiding householders towards smarter energy use, reducing bills.
• Low-income and vulnerable customers will gain better access to the different LCTs available, insight into their smart capabilities, understand how to effectively use assets, increase comfort and reduce energy bills. They will see better availability of smart products that help them optimise their LCTs.

Innovation Justification

Investment in grant-funded LCTs is ramping up at pace. These schemes target vulnerable consumers (e.g. HUGS, LADS) reducing some financial barriers to participating in the energy transition. However, these households are less likely to adopt time of use tariffs or use digital technologies to optimise their energy use. Without support and guidance to become smart energy users, low-income and vulnerable households may be financially penalised for their participation in the energy transition, resulting in them adding to network constraints rather than mitigate them. This project delivers the social and digital innovation needed to enable asset optimisation and deliver value to households and the energy system.

CSE has developed the Smart Energy Capability Lens which captures the range of non-technical factors that affect asset performance, such as a household's digital confidence, their energy social capital, domestic routines, tenure, ability to bear financial risk. However, this conceptual framework needs to be proven empirically and demonstrate how these factors combine to affect asset performance. This project aims to quantify the socio-technical potential and reduce the socio-technical performance gap, which requires the following innovations:

*Novel methods to capture households' experiences and expectations and link these to asset performance;

*Novel interventions that build smart capabilities to reduce the socio-technical performance gap;

*Novel approaches to monitoring and modelling that account for socio-technical potential and improve network planning; and

*Novel approaches for unlocking energy flexibility from these households through existing or novel flexibility services.

Rich data on households' understanding and use of LCTs is scant, and we lack insight into specific experiences and expectations these households have of the technologies being installed in their homes. Therefore, we do not know whether LCTs are performing as engineered and if the consumers or the network are as expected. Our limited knowledge is because of the challenges conducting the required research with these households. The project partners have experience with and routes to grant-funded schemes installing LCTs as part of retrofit works. This will enable us to pilot engagement and monitoring techniques with hard-to-reach households.

Closing the socio-technical performance gap means more cost-effective deployment of LCTs and networks will be better able to innovate forms of support for low income and vulnerable households.

This project cannot be funded elsewhere due to the need for collaboration across various sectors, the sensitivities with working with vulnerable households and the need for interventions to be easily scaled nationally across all networks.

Project Benefits

Financial -- future reductions in the cost of operating the network

• Target output: Reduction in the cost of network reinforcement
• Metric: Model showing what reinforcement would be required if interventions were not applied.
• Justification for target output: Better management of domestic LCTs will reduce the net impact of them on the grid, and drive consumption away from peak load, thus preventing or deferring the need for reinforcement.
• Achieve by: end of beta phase.

Financial -- cost savings per annum on energy bills for consumers

• Target output: A reduction of consumers' bills
• Metric: Households annual energy bills
• Justification for target output: through appropriate interventions we expect to see improvements in the coefficient of performance (COP) for air source heat pumps, kWh of solar PV output used on site, battery storage, and engagement with tariff switching and domestic flexibility services
• Achieve by: end of beta Phase

Revenues -- improved access to revenues for users of network services

• Target output: An increase in low-income households participating in flexibility services and offerings
• Metric: Number of households participating in the flexibility services after trialling the interventions compared to the number participating prior to the interventions.
• Justification for target output: Project will aim to provide consumers with the ability to better access existing services and help create new services more targeted for their needs, thus increasing participation.
• Achieve by: End of beta phase

New to market -- products, processes, and services

• The project will track how the innovations and open access framework lead to new processes and products that target or include low-income households and consumers in vulnerable circumstances.

Additional metrics

• Social inclusion -- we will document the diversity of households engaged
• Smart Energy Capabilities -- we will develop a metric for assessing Smart Energy Capabilities and tracking improvements per household

In addition, the project will quantify:

• The socio-technical performance gap of grant funded LCTs
• The impact on the socio-technical performance gap of the innovations (i.e. social innovations during install and hand over to tenant, digital and social innovation to monitor performance gap and deliver actionable insight to the appropriate party (e.g. landlord, tenant, DNO).