19 June 2024 Energy Data, Innovation, Smart Meter Rollout

AI in the energy sector: The transformative role of smart meter data and half-hourly settlement

Artificial intelligence (AI) is here. And it is today already reshaping industries and economies worldwide, helping to drive efficiency, innovation, and new opportunities. From healthcare to finance, AI’s ability to analyse vast datasets and derive actionable insights is completely revolutionising traditional practices and processes. The energy industry is no exception.

As the UK energy sector begins to embrace and adopt this technology, smart meters have emerged as a critical enabler of AI-driven solutions, providing the mass of data needed to optimise energy consumption and enhance operational efficiency at scale.

Meanwhile, the Market-Wide Half-Hourly Settlement (MHHS) reform mandated by Ofgem – the UK’s energy market regulator – marks a further significant step in this direction.

In this blog, we explore the fundamental role of smart meter data in this ongoing transformation, and how energy suppliers and market innovators must seize the opportunity to collaborate with data experts like SMS in order to transition smoothly to MHHS and develop innovative, AI-driven energy services.

AI: Transforming industries through data

AI’s transformative power lies in its fundamental capacity to process and analyse large volumes of data, uncovering patterns and insights that human analysis might miss. In manufacturing, AI optimises supply chains and predicts equipment failures. In healthcare, it aids in diagnosing diseases and personalising treatment plans. In finance, AI enhances fraud detection and improves customer service through chatbots. These examples illustrate AI’s potential to drive significant improvements in efficiency and decision-making.

AI is already making significant strides in the energy sector, too, driving innovation and sustainability. Some of its most notable applications include:

    • Grid management
      AI helps balance supply and demand on the electricity grid, optimising power distribution and integrating renewable energy sources.
    • Predictive maintenance
      AI algorithms analyse sensor data to predict equipment failures before they occur, reducing downtime and maintenance costs.
    • Energy optimisation
      AI-driven platforms, like Google’s DeepMind, optimise energy consumption in data centres, achieving significant energy savings.
    • Consumer engagement
      AI-powered apps provide personalised energy-saving tips, helping consumers reduce their energy bills and carbon footprint.

Smart meter data: The foundation of energy AI

In the energy sector, smart meters are increasingly becoming foundational to AI applications, particularly in the realm of grid management and consumer engagement.

Providing detailed, real-time data on energy consumption – offering consumers, suppliers, and grid operators a comprehensive view of how energy is used across homes and businesses – the data that these digital devices provide is crucial for developing AI-driven solutions that can better optimise energy usage, reduce costs, and support the transition to a low-carbon economy.

A prime example of smart meter data in action is the SMS-led smart homes project in Oxfordshire. Supported by the UK Government’s Alternative Energy Markets Innovation Programme, this initiative aims to explore smarter, more flexible energy usage. By involving up to 50,000 homes and small businesses, the project provides participants with detailed consumption data via an app, along with personalised energy efficiency advice (based on the intelligent analysis of each property’s data patterns by AI).

Additionally, time-of-use tariffs and energy smart appliances (ESAs) such as batteries and heat pumps are being offered to help consumers optimise their energy consumption (through automation) when it is cheaper and greener, showcasing how AI can drive smarter and more flexible energy consumption for the overall benefit of the grid.

Half hourly settlement: Further unlocking AI potential in energy

The introduction of Ofgem’s Market-wide Half Hourly Settlement (MHHS) reform is a pivotal development for the energy sector.

By mandating the collection and settlement of smart meter data every half hour, the reform will ensure that energy suppliers have access to a continuous stream of granular data. This level of detail will be essential for developing sophisticated (AI-driven) models that can better predict energy demand, optimise distribution, and enhance grid stability.

With deeper insights into consumer behaviours, energy suppliers will also have much improved ability to innovate in product and service offerings, leading to increased customer engagement and satisfaction.

AI, automation, and smart tech integration

As one of the UK’s largest collectors, processors, and aggregators of energy data – managing, owning and operating over 4.5 million IoT energy assets – SMS is at the forefront of enabling new and innovative applications and products in the energy sector through its heritage in meter data.

Significant expertise in meter testing, particularly the interoperability and interchangeability with other smart devices, also positions the company as a key player in developing the foundations for AI-driven energy solutions.

The Interoperable Demand Side Response (IDSR) project, part of the UK Government’s Flexibility Innovation Programme, is a testament to SMS’s leadership on this front. This initiative is currently testing ESAs in domestic settings to unlock the fully potential of the domestic demand-side response market. By enabling homes to contribute to grid flexibility in a highly intelligent and automated way, these efforts aim to support the UK’s decarbonisation goals and pave the way for a more sustainable energy future.

Seizing the data opportunity: The role of energy suppliers

As the UK advances towards its target of 100% renewable electricity by 2035, the relationship between smart meter data, AI and automation will become increasingly important.

By providing the data necessary for AI applications, smart meters are enabling energy market regulators and participants to create more efficient, flexible, and sustainable energy systems. The benefits are manifold: reduced costs, improved operational efficiency, enhanced customer satisfaction, and significant reductions in carbon emissions.

Energy suppliers are crucial to this transformation. The implementation of MHHS and the deployment of smart meters present opportunities to innovate and lead in the energy sector. To fully harness the potential of AI, suppliers must collaborate with smart meter and data experts like SMS.

Leveraging SMS’s expertise in energy data, interoperability and interchangeability, and smart technology integration, energy suppliers can smoothly transition to MHHS and develop AI-driven energy-as-a-service applications that benefit customers and support a greener future.

By embracing the data revolution, harnessing the transformative power of AI, and driving the UK towards a smarter, more sustainable energy landscape, together we can achieve our net zero targets and create a better world for future generations.

Supporting suppliers with smart obligations

We support energy suppliers across the entire spectrum of their smart meter rollout and Market-wide Half Hourly Settlement (MHHS) obligations. Discover our range of solutions: