Navigant Research Blog

Electricity Landscape: Expanding Demand

— January 30, 2018

On January 16, 2018, I attended the US launch of the International Energy Agency (IEA)’s World Energy Outlook (WEO) 2017 at the Center for Strategic and International Studies. Dr. Fatih Birol, Executive Director of the IEA, presented findings from the WEO and highlighted four megatrends in the global energy system:

  • Rapid deployment and falling costs of clean energy technologies
  • Growth in electrification of energy
  • China’s shift to a more services-based economy and a clean energy mix
  • The US’s position as the biggest oil & gas producer globally

Taking these megatrends into account, as well as projections on where existing policies and announced intentions may lead the energy systems, WEO’s New Policies Scenario expects global energy needs to increase by 30% between 2018 and 2040. This growth is mainly driven by India, whose share of global energy use is expected to rise to 11% by 2040. Southeast Asia also contributes immensely to overall growing demand. Developing countries in Asia Pacific are expected to account for two-thirds of global energy growth.

Growing Demand for Electricity

With a rising standard of living in many developing countries, more people will want to buy appliances and electronic devices powered by electricity. Innovative transportation technologies are gaining momentum and are projected to increase electricity demand as well. For example, China will need to add the equivalent of today’s US power system to its infrastructure by 2040 to meet rising electricity demand; India needs to add a power system the size of the current European Union. In fact, global investment in electricity overtook that of oil & gas for the first time in 2016. Dr. Birol emphasized the importance of China and India’s future energy decisions. Their decisions will play a huge role in determining global trends due to the scale of investment and deployment.

WEO Electricity Demand Projections to 2040

(Source: International Energy Agency)

Heating and Cooling Demand Ramping Up

The growing demand for heating and cooling is among various drivers for electrification of energy. In particular, consumers in warmer regions will increasingly install cooling systems. There is great potential for energy savings with energy efficient HVAC products, but that market remains largely untapped at present. According to the recent Navigant Research report, Market Data: Energy Efficient Buildings – Asia Pacific, the energy efficient HVAC market in Asia Pacific is expected to reach $25.6 billion in 2026. Specifically, China’s market is expected to grow at a 10.5% CAGR between 2017 and 2026; and 11.4% in India. Today, heating and cooling in buildings account for approximately 40% of energy consumption.

In addition to demand for heating and cooling, the EV market is expected to grow rapidly. EVs can lead to a major low-carbon pathway for the transportation sector. Notably, Europe and China are aggressively promoting EV deployments. Navigant Research projects global plug-in EV sales to reach 8.3 million by 2026.

Increasing Electricity Demands

Overall, end-use electrification is expanding. The IEA expects the share of electricity in final energy demand to increase from 18% today to 26% in by 2060. So, what does the growing electrification of energy mean? Electrification creates environmental benefits by shifting many end uses of electricity away from fossil fuel sources. It also creates opportunities for boosting energy efficiency.

While there are still many challenges to overcome, such as enforcing energy efficiency regulations and developing EV infrastructure, the electrification of large sectors of the economy holds great growth potential. This growth will be driven by rapidly evolving technologies, emerging innovative business models, and shifting regulatory environment. Together, these are referred to as the Energy Cloud, disrupting the traditional electricity landscape. To learn more about how industry stakeholders can prepare and manage their organization to maneuver through the Energy Cloud disruption and position themselves for long-term success, see Navigant Research’s white paper, Navigating the Energy Transformation.

 

The Door to Sharing EV Charging Data Is Now Open

— January 30, 2018

Industry players agree that understanding the interaction between plug-in EVs (PEVs) and the grid is critical to growing the PEV market. Utilities are interested in the analysis of charging behaviors and their impact on the daily load cycles so that they can plan for the additional load. In the US, with the exception of government-funded enterprises such as the EV Project, charging data collected by utilities, automakers, and charging service providers (CSPs) has remained proprietary to their organizations.

Electrify America Leading the Way

However, in the foreseeable future, investments by the likely largest funder of EV charging infrastructure in the US will spur greater openness by CSPs on charging data. Electrify America, the Volkswagen (VW) company that was created to comply with the terms of the diesel settlement with the Environmental Protection Agency, has been selecting CSPs that support open standards to enable the sharing of charging data.

On January 23, Electrify America, which will spend $2 billion over 10 years on charging infrastructure, awarded a contract to Greenlots to be the operating platform for an upcoming network of high power DC fast chargers. According to the press release, “Greenlots’ technology will enable Electrify America to effectively build, operate, and manage its high power charging network by providing real-time charger health status, utilization data, dynamic pricing capabilities, and predictive analytics.” In addition, Greenlots’ CEO Brett Hauser said that the company’s SKY platform will roll up data from all of the charging hardware, regardless of the vendor.

Installing Chargers

In December 2017, Electrify America announced that it would install 2,800 Level 2 chargers in workplace and residential locations in 17 of the biggest metropolitan areas across the US. For the project, which also includes multifamily and designated low income and disadvantaged community areas, Electrify America selected Greenlots, EV Connect, and SemaConnect as its CSP partners.

Both Greenlots and SemaConnect are participants in the Alliance for Transportation Electrification, a group that launched in November 2017 to promote open standards, help shape state policies and rate structures, and facilitate expansion of EV infrastructure. The open standard that the group supports is the open charge point protocol (OCPP), an international standard with origins in Europe that is gaining momentum in the US. OCPP is supported by Greenlots, EV Connect, and many of the largest global CSPs, as well as BMW.

Observing Results and Driving Adoption

By selecting vendors focused on storing and sharing data in a standard format, Electrify America will be able to see what is happening across its network, regardless of which vendor’s equipment is being used or which CSP is managing the equipment. For example, it will be able to track patterns of how electricity consumption from PEVs is influenced by weather, how the hourly load impact differs by region, or how charger utilization in different geographies can inform future investments in charging infrastructure.

While not all EV CSPs have embraced the notion of standardizing and sharing data, the size of Electrify America’s investment will likely encourage greater adoption of this notion from charging companies looking to get in on the action of VW’s substantial investments. The next formidable hurdle is for automotive manufacturers to also embrace open charging data. It is an encouraging step that Britta Gross of GM is among the participants in the Alliance for Transportation Electrification. Industry observers will be watching to see who joins this movement next.

 

Hidden Nuggets among the CES Glitz

— January 30, 2018

Sometimes surprises hit you slowly—hidden nuggets overlooked at first glance but demonstrating some hidden or potential value upon further reflection. Such was the case for several companies I met with at the recent CES trade show in Las Vegas. My colleague, Paige Leuschner, covered the major themes at CES in a recent blog: artificial intelligence, home healthcare, and Google everywhere. By contrast, the following firms captured my mind not for hogging the spotlight, but for showing real promise in several technology areas:

iotaBEAM

This startup aims to solve one of the difficult challenges in the Internet of Things (IoT) world—how to secure sensing devices that have limited processing power and run on batteries. Think of a sensor on a remote area of a plant that monitors heat or temperature. Most solutions protect the gateways that gather sensor data, but miss that first hop from the sensor to the gateway. The company’s patent-pending StarDust offering secures that first hop from the sensor with a patented technology that fits into tiny sensors and uses a fraction of battery power. The solution should appeal to many firms deploying IoT technologies, from utilities to manufacturers to healthcare providers.

Kerlink

This French company is no startup. It has been around since 2004, toiling away in the geeky machine to machine space. Lately, however, the company has been riding the strong interest in LoRa technology (also mentioned in a previous blog). Kerlink offers a suite of networking equipment for low power wide area networks (WANs), the type of systems that enable IoT connections at scale. The company announced a nice win during CES, a deal for an additional 800 base stations to be supplied to Proximus, a Belgian telecom company building out its own LoRaWAN IoT network. Kerlink appears poised to take advantage of several IoT use cases, including smart cities, smart buildings, smart health, advanced transportation solutions, and connected agriculture.

Royole

With a larger booth area, Royole was not nearly as subdued at CES compared to the two above. Nonetheless, it could be overlooked among the hundreds of other showy vendors. What caught my eye was Royole’s flexible display and flexible sensor technologies. Royole’s displays are as thin as 0.01 mm, which is about one-fifth the thickness of a human hair; and the company claims its displays are the thinnest in the world. The ultra-slim sensors can be embedded in furniture or the console of a car for controlling a chair or the dashboard electronics. One can imagine other applications for these sensors in an IoT-connected world, such as in clothing, walls, or medical gear. Founded in 2012, the company is poised for growth with the recent completion of its $1.7 billion production facility in Shenzhen, China.

To be sure, these three represent only a handful of the many companies not hogging the spotlight at CES. Competitors could surely surface and outmaneuver them, or the market could simply go sour on their products. The point is that CES is not only a place for the latest gadgets or products from the big brands, but also a place where the wallflowers can take the floor and show off their potential diamonds in the rough.

 

DERMS Is the Word at DistribuTECH

— January 30, 2018

After attending DistribuTECH in years 2014 through 2016, I took 2017 off because it seemed like there was less emphasis on demand-side management (DSM) and behind-the-meter distributed energy resources (DER) like demand response, energy efficiency, and energy storage. The biggest standalone public companies in the space at the time, Opower and EnerNOC, had seriously pulled back or ended their presence at the show. Acquisitions added additional doubt of direction in the industry; in 2016, Opower was bought by Oracle—putting into question its future focus on the space—and in 2017, EnerNOC was acquired by Enel.

DSM and DER Back in Focus

With that backdrop, I did decide to make the return trip to San Antonio in 2018 to see if anything had changed. I can’t speak to whether last year’s conference was any kind of transition, but I was floored with the level of attention given to DSM and DER topics by both DistribuTECH stalwart companies and startups alike.

From the big boys, like GE, Siemens, and Schneider, a common theme emerged of connecting advanced distribution management systems with DER management systems (DERMS). I alluded to this trend in Navigant Research’s 2016 report, Demand Response Management Systems, and my experience at DistribuTECH solidified the notion. Those vendors had intricate displays showing how the systems integrate, but there is still little real-world experience with such cases. The Smart Electric Power Alliance (SEPA) held a concurrent session aimed at standardizing DERMS requirements and terminology since it means something different to every vendor and utility.

On the startup side, a plethora of newbies were hawking their technologies for energy efficiency, and in particular, customer engagement. The majority of these applications are based purely on software, analyzing meters and other forms of data, as opposed to any new hardware that the utility or its customers would need to install. Companies like Grid4C, Powerley, Mach Energy, and Bidgely—along with more-established players like Oracle, Itron, Landis+Gyr, Honeywell, Lockheed Martin, and AutoGrid—touted their algorithms, segmentation tools, and disaggregation capabilities designed to help utilities and end-use customers save energy, detect anomalies, and engage in more meaningful ways. The Smart Energy Consumer Collaborative held its annual Consumer Symposium onsite to highlight these technologies and strategies.

DistribuTECH or ConsumerTECH?

Of course, the majority of the show floor was dominated by the usual suspects with transmission and distribution equipment and operational systems, but I was more interested in what was bubbling up around the edges. If things keep progressing in these directions, the show might have to change its name to CustomerTECH!

 

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