Big Data Means Big Energy Savings

By: James Madej

The idea of big data – collections of information so large that only advanced analytical systems can make sense of them – has gained traction in a growing number of industries over the past few years.

The energy sector, its customers – and the environment – can also benefit from the use of big data. The appropriate use of information and analytics will be critical to achieving our shared economic and environmental goals, especially given the urgency of climate change. Bringing American energy into the 21st century is imperative – and an incredible opportunity.

How big is the opportunity? Consider this, the U.S. is dead last among developed nations when it comes to energy productivity. Shockingly, the U.S. wastes more energy than it uses. A whopping 57 percent of the energy flowing into our economy is simply wasted as heat, noise, or through leaks. Even China, a so-called developing nation, ranks ahead of the U.S. in terms of the efficiency of its energy infrastructure. Analyzing and understanding where, why and how this waste occurs and finding ways to fix the problem is – you guessed it – a job for big data.
To encourage the types of data-driven insights needed to achieve meaningful economic and environmental advancement, the Commission on National Energy Efficiency Policy – formed through the Alliance to Save Energy – has called for a doubling of U.S. energy productivity and efficiency by 2030. Achieving this goal could add 1.3 million jobs to our economy, boost GDP by 2 percent, and reduce carbon emissions, as well as oil and gas imports, by more than 30 percent.

Even with renewed attention and support from policy-makers and politicians, achieving these goals will not be easy. It is important that everyone recognize that getting there will be a marathon rather than a sprint. Here is how we will get there – and how data will help – especially as it relates to our use of electricity:

• The first step is to outfit and update our energy infrastructure with the steel and software necessary to collect and analyze the required data.

  This calls for a greater level of sophistication around data collection and analysis, as well as a broader set of information than might have been considered in the past. We need not only performance and consumption statistics, but also behavioral and demographic information – and with them the ability to ensure customer privacy and data protection.

• Lay out the potential of big data so every customer – whether they are large or small, residential or commercial – understands how it can support energy savings and provide an environmental upside.

  The goal is to provide customers with the right information in simple formats that can be used immediately to make smarter energy consumption decisions. Using big data to improve energy choice, applications and management will be a game-changer in terms of energy efficiency and economic growth.

• Put big data – and the insights it provides – to work to improve operations and shape public policy for the benefit of our business, our customers, our communities and our environment.

The cost of doing this will not be trivial. According to the Utility Analytics Institute the industry is poised to invest more than $2 billion on its data infrastructure over the next 12 months. And that is in addition to the more than $2.5 trillion the International Energy Agency estimates the industry needs to invest by 2035, most of it to replace aged equipment.

Energy companies will shoulder an increasing responsibility for conserving energy and addressing climate change. To support the necessary investment, an innovative regulatory framework is needed; one that rewards companies for providing economic and environmental benefits and penalizing them for falling short. Measures such as the Energy Savings and Industrial Competitiveness Act of 2015 – introduced by Sens. Rob Portman (R-Ohio) and Jeanne Shaheen (D-N.H.), passed Congress and was signed into law by President Obama on April 30, 2015 – are a step forward.

The energy industry’s use of big data may seem abstract and future-focused. However, real progress is being made at a number of companies across the U.S. These investments are improving operational efficiency, reducing the cost of energy for our customers and helping protect the environment.

Madej is senior vice president and chief customer officer for National Grid.

Original article online at: http://thehill.com/blogs/congress-blog/energy-environment/247559-big-data-means-big-energy-savings

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