Data Quality in the Energy Industry

The energy sector is dynamic, with data playing a crucial role in driving innovation, shaping key decisions, and advancing sustainable energy solutions. Despite its pivotal role, the quality of data in the energy sector is often overlooked. Trustworthy data is indispensable, and its low quality can significantly impact an energy company's revenue.

In this article, we’ll help you understand the importance of data quality in the energy industry, ensuring you safeguard your bottom line.

What is data quality and why is it important?

Data quality is the degree to which data performs for its specific purpose. This means that the data must serve the outcomes that it is intended for. Data quality is measured by the accuracy, completeness, and consistency of datasets and their values. It’s important for all organisations to have high-quality data that can be trusted when making important business decisions.

When data quality is compromised or overlooked, it hinders decision-making processes, leading to missed opportunities and significant financial implications. For instance, inaccurate data on a customer’s energy consumption can result in wrongly issued billing and operational inefficiencies.

Data quality is not the same as data governance, although they both are closely related.

Measuring data quality

Data quality can be measured by the following dimensions:

Accuracy: Trustworthy insights stem from data that is precise and free from errors. Inaccuracies can diminish the value of the data, leading to a loss of trust and hindering effective decision-making processes.
Completeness: For data to be useful, it must be thorough and include all necessary information, such as dates and contact details. Incomplete data can disrupt processes and make communication challenging, impacting overall efficiency.
Consistency: Consistency in formatting across datasets is essential for ensuring trustworthiness. By maintaining uniformity, confusion and errors can be minimised, leading to more accurate decision-making.
Timeliness: Access to data in a timely manner is crucial, especially in industries like energy where quick decisions need to be made. Delayed access can lead to inefficiencies and hinder effective resource management.
Uniqueness: Data integrity relies on the absence of duplicates. Eliminating redundant entries for customers or contacts is essential for maintaining accuracy and reliability in decision-making processes.

What are the benefits of data quality in the energy sector?

Data quality plays a pivotal role in various aspects of the energy sector, from managing overdue payments and minimising bad debt, to providing customer support and meeting regulatory requirements.

Accurate and complete data enables energy providers to:

Manage overdue payments efficiently, ensuring timely collections and reducing financial risks associated with bad debt.
Provide quality customer support by accessing accurate customer information promptly, leading to enhanced customer satisfaction.
Meet regulatory requirements such as Ofgem ODIs (Outcomes Delivery Incentives) and obligations more effectively, ensuring compliance and avoiding penalties.
Ensure data compliance by maintaining accurate and up-to-date records, mitigating GDPR and other regulatory risks.
Better understand your customer base, identifying vulnerable customers or provider switchers, allowing for targeted support and tailored services to meet specific needs and preferences.

By prioritising data quality across these critical areas, energy providers can enhance operational efficiency, mitigate risks, and foster long-term growth.

How can poor data quality affect the energy sector?

Poor quality data can have a hugely negative impact on energy providers. If data is incomplete, it could result in energy providers underestimating the energy demands of customers which could lead to supply shortages or excess amounts of energy being produced.

Inaccurate data can result in incorrect billing. If you’re under billing a customer for what they’ve used, this hurts your bottom line. Revenue leakage costs utility suppliers £3.3 billion in annual revenue. We offer Revenue Assurance solutions to help you identify areas of weakness and leakage in your billing and operational processes, delivering fixes and ongoing governance to improve the bottom line.

Data also needed to be consistent. Energy suppliers have customers from different regions and on a variety of tariffs. Data can also be collected from a number of different sources including smart meters, standard meters, grid systems and weather stations. All these different factors need to be considered when collecting data.

If data is collected and stored in inconsistent formats and systems, it makes it difficult to analyse effectively which can impact operations and result in missed opportunities.

How can energy companies improve data quality management?

We offer business and data solutions for the energy sector to help energy companies reduce risks and improve their decision making. Here are some helpful tips to improve data quality:

Always ensure your data is clean

It’s vital that energy suppliers always have clean data. This can be difficult to achieve for businesses working with large amounts of customers so it’s best to seek expert help in these situations. We provide data cleansing solutions that can help you improve the quality of your data so there are no inconsistencies, errors or missing data.

Use consistent data formatting

When collecting data, it’s important to keep it consistent when inputting it into a database. The formatting for each field should be the same. Examples of consistent data input include postcodes being formatted in one way whether it’s ‘AB1 2CD’, ‘AB12CD’ or ‘AB 12CD’. It doesn’t matter which style is used as long as the same one is used throughout all your data. Swapping between different formats can cause complications later on when analysing data.

Check that address details are up to date

It would be easy if people always lived at the same address but we know that’s not the case. When people move home, they don’t always notify their energy supplier. This can cause billing issues which can result in the accrual of bad debt and resulting debt recovery in order to collect missing payments.

Our Property Moves solution can help find out if named bill payers still occupy the supply address or if they have moved out. If they have moved, we can find out when they left and who the new bill payer should be.

Identify billable occupiers

Unknown occupiers and validating residency are also critical for energy suppliers. An unnamed bill will often go ignored and knowing who a new billable occupier is often results in lost revenue.

Our Occupier ID solution can help you quickly and accurately identify who is occupying an address so you can send a named bill to that customer and update your records. This saves you time sending unnamed bills and trying to get in touch with an occupier who may no longer live at a given address.

Conclusion

It’s vital that all energy companies have data they can trust. Data quality is essential for suppliers to ensure they can accurately bill customers, predict energy demands to avoid shortages or overproduction of energy, schedule maintenance at convenient times and ensure they are maximising profitability. To learn more about the broader challenges the energy sector faces and how data quality can address them, see our guide on challenges facing the energy sector.

Get in touch with our team to see how we can help improve your data quality.