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Nudging energy saving behaviours

Gianluca Dotti

The theory of nudges comes from behavioural science and was pioneered by Nobel-winning Richard Thaler. It is now being studied as an alternative strategy to help reduce household energy waste


Traditionally, policies and initiatives aimed at convincing people to be more energy efficient, stake a lot on awareness campaigns that show how much money can be saved. However, studies around the world have proved that motivation to be more virtuous than one's neighbour may be even greater than the prospect of lower bills. That's the power of nudges, a theory from behavioural science.

A famous example in this sense is the OPower case, defined in 2011 by the World Economic Forum as a "technology pioneer", thanks to the incorporation of behavioural economic techniques into software. Alex Laskey, cofounder of the company, told in a TED speech that everything started from some surveys suggesting that moral suasion and financial incentives don't do much to motivate people to consume less energy. "But social pressure, that's powerful stuff," he explained: in other words, learning what your neighbour pays.

"We built software and partnered with utilities companies who wanted to help their customers save energy," delivering "personalised home energy reports to show people how their consumption compares to their neighbours in similar-sized homes", and giving "everyone targeted recommendations to help them save. We started with paper, we moved to a mobile application, web and then a controllable thermostat." And it worked, becoming a successful business model that was praised by the former US president Barack Obama.

The nudge theory—the idea that soft and indirect suggestions can influence behaviour with the same effectiveness as laws, commands or forced fulfilment—had the definitive crowning in 2017. The American economist Richard Thaler received the Nobel Prize as his "contributions have built a bridge between the economic and psychological analyses of individual decision-making". His ground-breaking research wasn't limited to economics, as he included climate change challenges in the list of nudge applications.


To investigate further applications, we had a chat with expert Sumedha Malaviya, a manager in the energy programme of the World Resources Institute (WRI) in India. She shared the results of a research conducted in collaboration with Sumathy Krishnan, executive director of the Bangalore-based NGO Technology Informatics Design Endeavour (TIDE).

Sumedna Malaviya Credits: World Resources Institute, India


How has interest in nudging increased over recent years?

Nudge theory can be applied to many areas, from environmental conservation to health care, from education to commercial markets. According to Thaler, to count as a mere nudge, the light touch—seen from the user's point of view—should be cheap and easy to avoid or to ignore.

Thaler's work has provided momentum and created acceptance. However, more validation is required to understand the influence of nudge in the context of energy, especially when applied to a large developing economy. This is why in India we have now initiated feedback research, and are trying to scale up to a larger population in order to make quantitative studies on the influence of nudges.

Could you make an example?

An example is our ongoing work known as VidyutRakshaka (VR), which means 'save electricity'. It is a citizen engagement initiative led by the NGO TIDE and the WRI India. We first ran a pilot in 2015 providing home electricity reports to about 500 consumers in Bangalore, the India's IT hub. Encouraged by the results of the pilot, where average energy savings of 17% were observed for 48% of the participants, the program was scaled up.

VidyutRakshaka was then re-conceptualised to its current stage of expansion, once again in Bangalore and in two other Indian cities. As of 2019, it has reached a total of over 4,000 households, of which more than 3,000 consumers in Bangalore and about 500 each in Mysore and Chennai. Civil society organisations manage the programme with citizens who are interested in understanding their energy use habits signing off for it.

Perhaps the most important nudge we provided in our energy digests was neighbourhood benchmarking, where consumers found out how they performed with respect to their neighbours.

We characterised households into three groups: champions (those using less than the average for the neighbourhood), energy savers (those around the neighbourhood average) and future champions (those who were using more than neighbourhood average). This was the first time they could compare their energy use.

Just being aware of your energy consumption is a big step. Many who sign up for energy-saving applications have no clue about their previous consumption trends or seasonal changes. Being compared to their peers and neighbours adds a certain social pressure. After all, we are all social beings and competing comes naturally to all humans. In a developing country like India, an increase in per-capita consumption is to be expected and programmes like VR are needed to instil and reinforce energy saving behaviours in the long-term.

How much could such an approach reasonably reduce energy consumption and therefore pollution?

Evaluating behaviour-based energy programmes is not easy. Few utilities have invested in the kind of data and procedures needed to measure impact on energy savings. For VidyutRakshaka, using the consumption data pre and post programme for the extended-size project, we have estimated cumulative energy savings of 30 MWh per annum (about 1.3% of daily peak demand in Bangalore) and an average of 25% energy savings with the top 40% of participants. As the aspirations of Indian households continue to grow, their energy consumption and emissions do too. Therefore waste prevention should be a priority.


How do you evaluate the proliferation of apps to monitor energy consumption, and what should the ideal features be to nudge users' behaviour?
We understand that, globally, several IoT platforms (Internet-of-Things) have been created and there are many companies dealing with consumers' power use data from smart devices. These provide real-time insights into consumption patterns and recommendations for saving energy. There is real consumer interest in such apps because power tariffs are high and also there is an ever-higher penetration of smart devices and smart metering. In India, however, both these conditions have not been created yet. For the VidyutRakshaka (VR) android application, launched in 2017, we did not see much uptake due to limited interest in Indian smartphone users in tracking their energy consumption. We are confident that with the advent of smart metering and appliances, and tariff inflation will generate new interest.

A feature that could possibly tweak user behaviour could be gamification, especially if coupled with rewards that can be shared on social media. This could result in long-term habits driven by peer competition. An additional idea is to load the platform with several extra features, such as one where the user can pay electricity bills or purchase energy efficient appliances through the platform.


The European Parliament has recently approved the so-called Green Deal project, where the energy efficiency of buildings is crucial. What do you make of this decision, in particular from the perspective of India?

Buildings are responsible for a third of energy-related CO2 emissions and yet they are the most cost-effective mitigation option as well, as we highlight in a WRI report. The EU decision to take stricter measures, not only for new buildings but also for existing ones, is very welcome and much needed. This reflects a strong political will. We understand that in Europe, where each country has its own pace of taking action and their unique building stock, the EU stands at the pinnacle of technological advancements, particularly low to zero carbon technologies.

In India we do not yet have a roadmap to decarbonise our building stock or to reduce emissions in this sector. We only have the Energy Conservation Building Code (ECBC) - a first step towards promoting energy efficiency in buildings, which was developed in 2007 and revised in 2017 by an expert committee set up by India's Bureau of Energy Efficiency—which has not been fully implemented in most Indian states.

Given that my country is growing so rapidly, we have an urgent need to prevent lock-in of inefficiencies and also to lower the carbon footprint of building materials. Unfortunately, under the current situation, we are unable to do this, mainly because of lack of political will to make tough decisions for a fragmented buildings sector. There has been rapid progress made on the renewable energy front in India, but energy efficiency in buildings needs to be prioritised urgently.

Between technological innovation and social culture, what do you think will be the real decisive element?

As the modern-day philosopher and historian Yuval Noah Harari has stated in his book "21 lessons for the 21st century", technological disruption is one of the three top challenges facing mankind (the other two being climate change and nuclear war). Given that we will continue to seek technological innovations, we need to be careful about the social norms, the practices and the cultural models we create along with this transition. A technocentric approach alone to fighting air pollution won't be long lasting nor sustainable.

To take an example, 20 years ago New Delhi saw the introduction of Compressed Natural Gas (CNG), a cleaner fuel for public transport (buses), which drastically brought down air pollution. However, CNG was promoted excessively by the government through reduced prices and supply infrastructure. Technology improvements kept adding more roads and metro to New Delhi but, over the course of time, the impact of CNG on the city's air has been offset by the proliferation of vehicles. The government did not work on changing driving behaviour, such as encouraging use of public or shared modes of transport. Even with new technology, long-term changes towards environmental conservation or reducing pollution cannot be achieved if people's practices don't change.

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