Consumers can save money on their electricity bills and negotiate better deals by joining forces
Consumers can save money on their electricity bills and negotiate better deals by joining forces with similar groups of customers to switch energy suppliers according to new research.
Collective switching or group buying schemes, where thousands of consumers join forces to negotiate cheaper electricity tariffs, are becoming more popular in the UK as bills continue to rise putting increasing pressure on household budgets. Initiatives like Which?'s Big Switch, People Power or the Big Deal have helped thousands of consumers to save, on average, up to a third of their yearly electricity bills.
Now research from Heriot-Watt University and the University of Southampton proves these schemes work and proposes a model to help consumers form more efficient buying groups and minimize switching risks.
A common problem with existing schemes is that one tariff may not be efficient for every consumer. Often they may have been financially better off not switching, or as the research now shows creating a new sub-group which chooses a different tariff.
Speaking at the AAAI Artificial Intelligence conference in Canada this week Dr. Valentin Robu from Heriot-Watt University explains, "Electricity suppliers buy from the wholesale market where electricity prices are considerably lower. There are a number of ways they sell this onto consumers but typically they predict the amount of electricity required and pass on premium prices to consumers to cover any risk associated with over or under buying, allowing them to make profits.
"Crucially, this is where group buying is important. While everyone has potentially some uncertainty about their future consumption, our work shows that, by grouping together, consumers can gain size and market power and reduce their risk and access better prices."
In the new group buying models consumers start with a 'prediction-of-use tariff' which predicts their future consumption using their past data. Based on these patterns, they can then choose to join one of many different types of buyer groups with different tariffs, ranging from:
The research has been tested using consumption data from 3,000 UK domestic consumers and techniques from the fields of artificial intelligence and coalition theory to help find the best solution for each household.
Dr. Robu added, "While we now know how to efficiently form buyer groups to reduce each customer's electricity bill, previous research and practice shows customers are often reluctant to switch providers. Even if we can calculate what the most efficient decision would be consumers worry about loss of convenience and uncertainty of the future benefits.
"Our next challenge is to design smarter systems that not only propose the efficient tariff groups, but also "nudge" people towards making the optimal choice for them."
The ultimate aim of the research is to use artificial intelligence to design tools that enable consumers to choose their optimal tariff and allow them to identify other consumers to group with that have an efficient match in terms of their consumption patterns.
For more information please contact:
0131 556 0770 or email Lynne.email@example.com
Notes for editors
About Heriot-Watt University
Heriot-Watt University specialises in science, technology, engineering, business and design, with a particular focus on developing solutions to critical global issues, such as climate change and energy.
Established in 1821, the university has campuses in Edinburgh, the Scottish Borders, Orkney and Dubai, and is investing £35 million in a new campus in Malaysia. http://www.hw.ac.uk
Lynne Veitch | Eurek Alert!
How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung
Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT
Physicists of the University of Würzburg have made an astonishing discovery in a specific type of topological insulators. The effect is due to the structure of the materials used. The researchers have now published their work in the journal Science.
Topological insulators are currently the hot topic in physics according to the newspaper Neue Zürcher Zeitung. Only a few weeks ago, their importance was...
In recent years, lasers with ultrashort pulses (USP) down to the femtosecond range have become established on an industrial scale. They could advance some applications with the much-lauded “cold ablation” – if that meant they would then achieve more throughput. A new generation of process engineering that will address this issue in particular will be discussed at the “4th UKP Workshop – Ultrafast Laser Technology” in April 2017.
Even back in the 1990s, scientists were comparing materials processing with nanosecond, picosecond and femtosesecond pulses. The result was surprising:...
Have you ever wondered how you see the world? Vision is about photons of light, which are packets of energy, interacting with the atoms or molecules in what...
A multi-institutional research collaboration has created a novel approach for fabricating three-dimensional micro-optics through the shape-defined formation of porous silicon (PSi), with broad impacts in integrated optoelectronics, imaging, and photovoltaics.
Working with colleagues at Stanford and The Dow Chemical Company, researchers at the University of Illinois at Urbana-Champaign fabricated 3-D birefringent...
In experiments with magnetic atoms conducted at extremely low temperatures, scientists have demonstrated a unique phase of matter: The atoms form a new type of quantum liquid or quantum droplet state. These so called quantum droplets may preserve their form in absence of external confinement because of quantum effects. The joint team of experimental physicists from Innsbruck and theoretical physicists from Hannover report on their findings in the journal Physical Review X.
“Our Quantum droplets are in the gas phase but they still drop like a rock,” explains experimental physicist Francesca Ferlaino when talking about the...
16.11.2016 | Event News
01.11.2016 | Event News
14.10.2016 | Event News
09.12.2016 | Life Sciences
09.12.2016 | Ecology, The Environment and Conservation
09.12.2016 | Health and Medicine