Navigant Research Blog

Trends from Light + Building 2018

— March 29, 2018

When I registered to attend the infamous Light + Building trade show in Frankfurt months ago, I never could have imagined its massive scale. This colossal trade show hosted over 2,700 exhibitors and 220,000 attendees, and featured just about any company you can imagine with stakes in the digitization of lighting design, building management, and energy—from big building and lighting tech incumbents like Siemens, OSRAM, Schneider Electric, Philips Lighting, and Honeywell to smart home and Internet of Things (IoT) startups like ROCKETHOME, frogblue, and Ubie. During the many miles I walked between exhibition halls, I observed several noteworthy trends.

From Products to Solutions

Several of the vendors I spoke with that have traditionally invested in selling products and deploying hardware are transitioning their focus toward broader solutions based on software platforms and services. For example, Philips Lighting announced a new IoT platform called Interact, which allows the company to deliver new data-enabled services to professional customers through lighting. The company also announced the change of its brand name to Signify to highlight its strategic push toward IoT-enabled smart lighting systems (not just because it was required to as part of Philips Lighting’s split from Royal Philips in 2016). OSRAM made a similar announcement at the show with its Lightelligence IoT platform for developers, as did other lighting manufacturers like CREE and Zumtobel Group, each showcasing its own software solutions to support asset tracking, space utilization, and location-based services using data collected from connected lighting sources.

Li-Fi as an Emerging Technology Trend

Other technology trends featured at Light + Building include Light Fidelity (Li-Fi). At the trade show, Philips Lighting also announced that it is now offering Li-Fi-enabled luminaires, which provide broadband internet connection through light waves. Li-Fi is a wireless technology similar to Wi-Fi, though it uses lighting waves instead of radio waves to transmit data. The technology has the potential to bring additional connectivity to IoT devices. The company is piloting the technology with Icade, a French real estate investment company.

Connectivity through Partnerships

Another set of companies working to accelerate connectivity in buildings are Schneider Electric, Danfoss, and Somfy, which announced their partnership at Light + Building. The collaboration creates a connectivity ecosystem for homes, small commercial buildings, and hotels that allows each company’s products to integrate more easily with each other at the controller level or in the cloud through application programming interfaces, making the deployment and interoperability of IoT solutions for buildings less of a barrier. Initially, the ecosystem will manage lighting, heating, and window shutters on a single platform.

Implications

These technology trends, partnerships, and solutions ultimately highlight the importance of IoT and a shift toward platforms and solutions that bring together data and connectivity to increase efficiency and optimization. Whether it be in buildings and lighting or security, health, and energy, this is a trend Navigant Research sees across a variety of industries. This transformation is discussed in relation to the energy industry in Navigant’s latest white paper, Energy Cloud 4.0.

 

Integrated Ecosystem Partnerships Are Critical to Innovative Residential Customer Solutions

— March 29, 2018

My recent blog regarding Southern Company’s Smart Neighborhoods initiatives with Alabama Power and Georgia Power demonstrated that innovative customer solutions can have customer benefits as well as utility value. These types of customer-focused solutions in both the residential and commercial and industrial sectors are the focus of our new Utility Customer Solutions Research Service. Further, these Smart Neighborhoods initiatives are featured in my recently released Strategy Insight report titled Maximizing the Residential Energy Customer Experience with Emerging Solutions.

Smart Neighborhoods Initiative Taking Shape in Atlanta

Since that first blog release, Georgia Power has released details on the roles that individual technology providers are playing in the Atlanta initiative. These partner roles include:

  • Alarm.com focuses on smart home security solutions and can connect smart home devices to make them accessible through a smartphone app for homeowners.
  • GreenMarbles is a connected home systems integrator that is a channel provider for Alarm.com that specializing in home automation and energy management solutions that can manage homeowner’s thermostats, door locks, lights, garage doors, and water sensors.
  • Hannah Solar is a Georgia-based solar PV plus energy storage installer for residential, commercial, and agricultural sectors.
  • Mercedes-Benz Energy provides home energy solutions related to EV charging, solar PV and battery energy storage that can help provide resilient backup power.
  • Sunverge Energy has developed a distributed energy resources (DER) software and hardware controls platform that allows for the integration of solar PV, battery energy storage, and home energy management systems (HEMS) across multiple residences across a virtual power plant.

Sunverge Energy Helping to Find Savings for Customers

As part of the Atlanta Smart Neighborhoods program, Sunverge Energy’s platform will help customers by forecasting and scheduling residential activities to provide energy bill savings based on Georgia Power’s Smart Usage or Nights & Weekends energy rates. Further, Sunverge Energy’s platform will help Georgia Power and Southern Company understand how aggregated DER such as solar PV, battery energy storage, and HEMSs can interact across multiple residences to optimize the local grid.

Innovative Partnerships Will Transform the Role of the Home

Both regulated utilities and deregulated utility services companies are now exploring new energy-related solutions such as the DER optimization demonstrated by Georgia Power. Further, technology disruptors with smart home/home energy solutions are also looking to deploy their new solutions—either directly with customers or in partnerships with utilities—to make homes more safe, convenient, and comfortable. Navigant Research anticipates that an innovative ecosystem of partnerships between customers, utilities, and vendors will come together to expand the role a home can play in safety, convenience, comfort, and the transition of the grid from traditional, centralized generation to part of an Energy Cloud platform.

 

A Shifting Lighting Landscape Provides New Opportunities for Vendors

— March 29, 2018

The commercial lighting market is shifting focus from hardware and the production of light sources such as lamps and luminaires to a broader set of solutions that incorporate lighting controls and value-add features beyond illumination. The Internet of Things (IoT) is helping drive this change as the number of connected devices increases and as connectivity is brought to devices that were previously not connected. To address this shift, lighting manufacturers are repositioning themselves in the market to showcase their abilities beyond lighting and traditional lighting controls.

Deepening Capabilities Creates Broader Portfolio Offerings

In the emerging market of IoT lighting solutions, new and expanded technologies are providing a different way to view the capabilities of a lighting system. Vendors can use new use cases to address specific customer challenges beyond increased energy savings such as space utilization, increasing operational efficiencies, improved employee productivity, and enhanced retail customer experience, among others. Companies are leveraging a growing number of technologies to set themselves apart by providing solutions that use these different technologies.

Many companies see value in offering solutions with a breadth of protocols as these can assist a company’s aim to provide tailed solutions for each use case and to future-proof their portfolio. Philips Lighting recently announced the release of luminaires enabled with Light Fidelity (Li-Fi) technology. Li-Fi provides a two-way wireless communication traveling at high speeds, similar to how Wi-Fi uses radio waves to transmit data, but instead relies on light waves. Icade, the French real estate investment company, is piloting this technology in its office in Paris, France.

Navigant Research’s research brief, Visible Light Communication, discusses the origin of Li-Fi technology, which was first demonstrated by Professor Harald Haas during a TED Talk in July of 2011. The technology has not gained much traction in the commercial lighting market since then, but has potential to garner more attention with Philips Lighting’s bold decision to pioneer this technology with its office portfolio. Philips Lighting recently had several other announcements that are chronicled by my colleague Paige Leuschner in her recent blog, “Trends from Light + Building 2018.”

Expanding Capabilities through Acquisition

Acuity Brands, Inc., another leading lighting manufacturer, recently acquired building analytics company Lucid Design Group, Inc. The acquisition will help expand Acuity’s already robust IoT lighting solution portfolio that includes the company’s sensory network of luminaires, components, and edge devices that are enabled with Atrius and feature advanced sensing capabilities. Lucid’s data and analytics software as a service-based platform, BuildingOS, provides building owners, operators, and occupants the ability to gain insights into building operations in order to increase employee productivity and operational efficiency. Lucid’s capabilities will assist Acuity’s strategy of increasing IoT capabilities by connecting the company’s IoT solutions with broader integrated building data.

New Opportunities

These two lighting powerhouses have demonstrated the opportunities available in the market for new solution offerings to expand IoT capabilities with lighting at the center of an intelligent building’s infrastructure. Philips Lighting and Acuity are not alone in pushing the boundaries of lighting system capabilities. The lighting industry is seeing many incumbent lighting companies seize the opportunity to expand their portfolios to align with the shifting market and new startups looking to make a place for themselves in the growing IoT ecosystem.

 

Can Colorado Become the Next Big Energy Storage Market?

— March 29, 2018

Having covered the energy storage industry for several years it’s exciting to see my home state, Colorado, making headlines. Aside from a handful of older pumped hydro plants, the storage industry is nascent in Colorado due to a combination of cheap electricity, relatively low demand charges, and little regulatory support. The state has emerged as an attractive market for both wind and solar generation projects, and energy storage has entered the state’s energy planning in a big way. State-level policies and new storage projects are shaking up the market at all levels.

Policies Supporting Growth

Colorado’s first energy storage-specific legislation likely will go into effect this year thanks to Governor John Hickenlooper signing SB 18-009 into law. The bill concludes that customers have a right to interconnect and use batteries without restrictions. The uptake of residential energy storage has been slow in Colorado, partially due to the relatively high permitting and interconnections costs charged by utilities. The bill aims to reduce these barriers and allow customers to benefit from the resiliency and cost savings that can be provided by residential storage.

New Projects and Procurements Highlight Colorado’s Potential

While the prospects for residential storage are improving in the state, recently announced projects have shown that utility-scale energy storage is already viable. In late 2017, northern Colorado utility cooperative United Power announced it will build and own a 4 MW/16 MWh battery energy storage system. What’s unique about this project is the utility’s plan to share the benefits with its customers through an innovative community energy storage program. Commercial and industrial customers can buy into the project for a certain number of kilowatts, and have their peak demand and associated charges be reduced by that amount. For the utility, the real value lies in reducing its overall peak demand, and the charges it pays to the regional wholesale supplier. United Power estimates that its investment can be fully repaid in 7-8 years with a 10% return.

The most noteworthy and well-publicized development in Colorado’s storage market was the announcement from the state’s largest power provider, Xcel Energy, that it received record-breaking low bids for new solar, wind, and storage capacity. Through its all-source solicitation, Xcel received bids for projects offering some of the lowest prices ever seen for wind, wind plus storage, solar, solar plus storage, and all three resources combined in a single project. The following table shows the total bids and median prices received.

Xcel Energy 2017 All-Source Solicitation Bid Summary, Renewables and Energy Storage

(Source: Xcel Energy)

These record low prices highlight the growing maturity of combined renewables plus storage projects, and the relatively low cost to add storage to wind or solar projects as system integration expertise has improved. Although the specific proposed projects and the companies bidding have been kept confidential, the details provided by Xcel list standalone battery storage projects up to 150 MW capacity with a duration of 10 hours. These projects included a rumored bid by Tesla for a 75 MW/300 MWh battery plant—which would be its largest. This wave of recent action on policies and new projects has put Colorado on the map as one of the most attractive states for new storage developments.

 

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