Electricity supply contract for households in multi-apartment buidlings

Sala-Heby Energi is a small local distribution system operator in the county of Västmanland in Sweden. Since 2003, the company has carried out a phased installation of smart meters and as part of its effort to explore the added values, the utility has collaborated with Mälardalen University and later Uppsala University to investigate the possibility of reducing system peak loads by means of a demand charge in the residential sector. 

In 2003, Sala-Heby Energi introduced a demand-based time-of-use distribution tariff to households in their distribution area. After a step-wise implementation process, the demand-based tariff had been introduced to all households above apartment size in the distribution area in 2009. A research team from the Uppsala University has been following the project since the introduction of the tariff and has published articles on the effects of its introduction. In early 2014, the research team received funding to start a new research project related to Sala-Heby Energi, named "Market-based policy instruments in the residential sector”. The project will for instance include testing new offers for apartment customers and visualization of energy use. The project is funded by the Swedish Energy Agency, three local DSOs and two companies dealing with energy data and energy feedback, respectively. 

S3C has fed into the project by providing a theoretical background, inspiration and good examples on for instance competitions, games, incentives and target components in electricity supply contracts. The research team used compiled knowledge from S3C as a starting point in the design process of the new intervention. S3C researchers have also been part of the research project’s reference group.

Picture: Local energy company building relations with customers

The users involved in the research project conducted by Uppsala University are all customers of Sala-Heby Energi. The organisational vision and business concept are to work locally with sustainable energy issues, creating large and local change through customer understanding and establishing relations to customers. To Sala-Heby Energi, the long-term relation to customers is crucial and the company has many activities aiming to interact with its customers, such as clubs for people interested in locally produced electricity, social events and information meetings. They also arrange theme days for their customers where they are invited to visit other households with innovative energy solutions. 
Ten years ago, Sala-Heby Energi introduced a demand-based time-of-use distribution tariff for households in single-family houses. As this tariff only applies to some of the company’s customers, the step was to develop an offer for households in multi-apartment buildings. Sala-Heby Energi in collaboration with Uppsala University has therefore initiated a research project aiming to support the development and evaluate the offer. The user has a central role in the project, both by being a customer to an energy company with a strong focus on customer relations and also by being the receiver of a new offer to be studied through a research project. To capture ideas and experiences of the customers, focus group meetings will be arranged. 

Collaboration with S3C

The relation between S3C and the research project was initiated in early 2013, when SP staff contacted the leader of the research team at Uppsala University. Their research on the demand-based time-of-use distribution tariff of Sala-Heby Energi was highly relevant to S3C in terms of representing a successful Smart Energy project. Contacts with the energy company itself resulted in Sala-Heby Energi being included as a supporting project to the S3C project. Thus, the initial contact between the research team, Sala-Heby Energi and S3C focused on collecting information through interviews. 

Further, the Sala-Heby project became an S3C trial project in order to receive support in their task of creating and studying a new contract to households in multi-apartment buildings. A background study and recommendations on the design of the contract were to be conducted by Uppsala University.

In the early stages of the collaboration process with S3C, it was established that support and information from S3C would be most useful in the initial background studies on incentives and contracts, supporting the research team from Uppsala University. Since then, there has been continuous contact between SP staff and the research team at Uppsala University to pinpoint which specific aspects the S3C project could contribute with. These discussions eventually resulted in the identification of a number of guidelines that could be useful as background information to the research team in the contract design process:
  • Guideline: Bonus & malus – changing behaviour with rewards and penalties
  • Guideline: Motivating consumers with social comparison and competition
  • Guideline: Gamification - making energy fun
  • Guideline: How personal goals can motivate behavioural change
  • Guideline and tool: Using segmentation to better target user groups
  • Guideline: Designing a dynamic tariff
  • Guideline: Choosing and combining monetary and non-monetary incentives
  • Guideline: Choosing from different types of monetary incentives
  • Guideline: Choosing from different types of non-monetary incentives
The guidelines have been used as input to an initial background study on incentives by the research team and as inspiration for the development of a new offer to Sala-Heby Energi’s customers. The guidelines have primarily contributed to the project by providing information on the status of research in relevant topics, as well as good examples from other countries. 

Further information

For more information on the Sala-Heby project, please visit the Sala-Heby Energi website at: (Swedish)

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