As part of the Ministry of Environment’s (MOE’s) effort to promote a “Japanese model of information-based, CO2-reducing behavioral changes in the residential sector,” Oracle Japan will work with five Japanese utilities to leverage energy efficiency tools in residential markets. (This project was announced at a live press conference with the participants Nov. 13 in Tokyo.)
Francois Vazille, Vice President, Oracle Utilities, JAPAC, was on hand for the announcement and greeted the team, the crowd and the press that gathered for the event with a few words of wisdom. We sat down with him to elaborate a bit on those words and the truly global scope of this project.
Q: Why is this project so important to Japan?
Vazille: It will greatly help them meet their climate change countermeasure plan and Paris Agreement commitments to reduce greenhouse gas emissions by 26 percent by fiscal year 2030 (compared to fiscal year 2013 levels).
With nearly 70 percent of the average Japanese household’s carbon footprint stemming from energy use, Japan’s Ministry of Environment (MOE) commissioned a nationwide study to measure the potential of residential behavioral energy efficiency programs as a means of reaching Japan’s fiscal year 2030 CO2 emissions reduction goals—of which a 40-percent reduction is required in residential-sector emissions alone.
This project is part of that overall push to meet those goals.
Q: How does Oracle fit into the project?
Vazille: Oracle Utilities’ Opower Energy Efficiency Cloud Service will be utilized to provide personalized energy efficiency guidance to 300,000 selected households across the country.
But we’re certainly not in this alone.
We’re working closely with five major Japanese utilities including Hokkaido Gas, Ltd.; Tohoku Electric Power Co., Inc.; Hokuriki Electric Power Co., Inc.; Kansai Electric Power Co., Inc.; and Okinawa Electric Power, Co., Inc. to deliver home energy reports—personalized energy consumption communications—to 60,000 residents in each utility territory using our platform.
I think it’s also important to note that this is Year One of a planned five-year program. Going forward, there is an opportunity to increase the number of utilities participating, raise the number of sample households across the program, and add new capabilities as the Japanese market responds to this initiative.
Q: Would you elaborate a bit on how the reports will be used?
Vazille: Each resident will receive reports with personalized insights that are designed to raise energy efficiency awareness by making consumers’ energy consumption easy to understand.
One example: comparing each household’s gas or electricity usage with that of similar homes and providing tips tailored to each household on how they can reduce waste where it makes sense for them to do so.
Q: How do these reports contribute to energy efficiency?
Vazille: Opower first introduced the Home Energy Report nearly a decade ago. Since that time, the company has been a leader in using behavioral design to motivate people around the world to save energy.
We want to motivate people to use less energy. And not with incentives or devices, but instead with information—the basic facts about their energy use over time, contextualized in a way that motivates them to use less. What does that mean? Framing energy usage in a way that is both universal and personal, so anyone can understand it and it actually means something to them. So, we use data analytics to help utility customers understand how much energy they are using compared to their neighbors; how their energy use changes over time; how their home uses energy; or what energy saving tips are most important for them. By providing the right information to the customer at the right time, we provide meaningful insights at the moments that matter.
Oracle sends proactive home energy notifications to 16 million households around the world, and our web tools reach 60 million households.
This behavioral approach to energy efficiency has been very effective: Today, Oracle Utilities Opower Energy Efficiency Cloud Service saves more than 4 TWh of electricity every year. By the end of 2017, we will have saved a cumulative 17 TWh (equivalent to taking 1.5 million homes off the grid for an entire year), and saved customers more than $2 billion.
Q: Why use a cloud-driven behavioral energy efficiency program to help to reach Japan’s CO2 emissions reduction goals? What are the benefits?
Vazille: A cloud-based behavioral energy efficiency program can be scaled quickly, with no new R&D necessary by the utility, to show verifiable greenhouse gas reduction impacts in Japan’s residential sector. Home energy report programs also deliver significant customer engagement benefits beyond the energy and greenhouse gas reductions and are a powerful platform for building customer trust and energy engagement.
Q: How much do you anticipate the initial 300,000 homes contributing to Japan’s energy efficiency goals?
Vazille: In the customer experience and energy efficiency programs we have run over the past decade, customer energy efficiency efforts have yielded an average of 2% energy savings per household. While a 2% reduction may sound small, if just 2% can be achieved throughout all of Japan, it has the potential to reduce CO2 emissions by 3 million tons a year. This is equivalent to about half of the total CO2 emissions (5.62 million tons) that the Japanese Government plans to reduce via “national educational campaigns” by 2030—in just a single year.
Q: How do you track the CO2 emissions reductions?
Vazille: The energy usage of the 300,000 Japanese homes participating in the program this year will be compared to a “control group” of Japanese homes not participating in the program to determine energy usage reduction of the participating group. This is a unique, global best practices approach to ensuring that the estimated energy efficiency savings impacts are valid.
Q: So, Home Energy Reports are the first step. What’s next?
Vazille: Within Oracle Utilities, we are expanding our demand side management and energy efficiency footprint. We started with our Home Energy Report, and then expanded those insights to email Home Energy Reports and a full set of web energy management tools. From there, we further expanded our offerings into demand response, high bill alerts, smart meter engagement, and other types of communication with customers. Our goal for the future is to reach deeper into self-service. We want to help our utility clients throughout the entire breadth of the customer experience, using the same formula that we have used to date in our demand side management products to motivate customers and get them to save energy.
We have spent more than a decade talking to our utility clients, collecting data and feedback from customers and industry experts, and understanding what they expect from our products. In response, in the past year and a half, we have completed the migration of our utility clients over to a new visual design and user experience for our Home Energy Reports, and also a more flexible energy reports platform, to create a great user experience for their customers. We’ve also totally re-platformed our web to become mobile-responsive and flexibly integrated with a utility’s website.
And we’re moving forward to evolve the program from what it is today—an energy efficiency resource—to being a resource utilities can bake into their portfolios with their generation assets, so they can deploy energy efficiency and demand response more strategically, based on optimizing the load curve. As we continue to optimize the programs that we’re already running, we’re also planting seeds for innovation to help transform our programs for the future.
Q: Beyond Japan, what other utilities have you worked with on similar customer-facing utility projects?
Vazille: Our customer engagement programs have been run in more than 10 countries across North America, Europe, and the Asia-Pacific.
For example, we partnered with Tenaga Nasional Berhad (TNB), the largest electricity company in Malaysia, two years ago to launch a pilot customer engagement program to give customers greater insight into their energy usage, and empower them to control their usage and save money on their monthly electric bills. TNB serves 8.6 million customers in the Malaysian Peninsula and is the first utility in Southeast Asia to launch a program of this kind. The program pilot began initially with 200,000 households in Klang Valley, Negeri Sembilan and Malacca. Both personalized Home Energy Reports and an online portal provide clearly defined information including customized energy-saving tips based on past energy usage and household characteristics. Customers also receive targeted help saving energy.
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