Navigant Research Blog

Utilities Need an Innovation Reset

— November 28, 2016

SmartCityUtilities should take a cue from customers: Go ahead and innovate. That is the clear conclusion from a recent study that says consumers want their utilities to be more innovative and expand offerings into the home.

The study, a SmartEnergy IP survey of 1,500 US customers, finds 32% of respondents expect their utilities to adopt technologies that automate energy savings and 20% expect their utilities to build smarter communities. There is a downside in the data, however; nearly 40% of respondents do not view their utilities as innovative, meaning there is room for improvement.

Not all utilities lack for innovation. At Navigant Research, we have chronicled the efforts of utilities willing to pioneer new technologies for customers. For example, Green Mountain Power in Vermont has led the charge with its eHome program, a holistic approach to home energy management that leverages technologies such as heat pumps, solar PV, storage, and EV charging, as noted in our IoT Enabled Managed Services report. Other utilities like Sacramento Municipal Utility District, Oklahoma Gas & Electric, and Kansas City Power & Light are promoting the adoption of smart thermostats as a way of helping customers reduce their bills and promote overall grid efficiency.

Among utilities innovating within their communities, San Diego Gas & Electric stands out for its efforts to create smarter cities from an energy perspective. The Southern California utility, a subsidiary of Sempra Energy, has been collaborating with local city governments on projects that leverage smart meters, demand management, and energy efficiency to lessen the impact of changing load patterns. By working together, the utility and local cities have forged an integrated approach for smarter energy use. Similarly, Duke Energy and ComEd are two other broad-thinking utilities that are leveraging ties with the cities of Charlotte, North Carolina and Chicago, Illinois to foster the same type of smarter community.

While these examples are encouraging, the SmartEnergy IP survey indicates customers in many locations have not seen much innovation from their utilities. Nearly a third are saying that it’s okay to step beyond the normal bounds and offer new products and services that help customers save money and use energy more wisely. There is a message here for regulators as well: customers are ready for innovation, and new rules that enable utilities to expand their product and service offerings would be welcome. It’s time for an innovation reset for utilities.

 

Hacks Lead to Frustration, Doubt in IoT Security Schemes

— November 2, 2016

Enough with the security breaches that leverage Internet of Things (IoT) devices and home Wi-Fi routers. The latest attacks on major websites clearly shows that the current schemes for locking down these connected devices are broken.

A quick recap of what happened on October 21 illustrates the problem. A double-dip distributed denial-of-service (DDoS) attack caused outages for some of the leading Internet destinations such as Twitter, Amazon, Tumblr, Reddit, Spotify, and Netflix. The attacks were pinned on a cyber criminal, or criminals, who used the Mirai malware, the same malware that took down sites in September. This malicious botnet searches the Web for IoT devices such as CCTV video cameras, digital video recorders, or Wi-Fi routers that still have factory-default usernames and passwords in use for protection. Such vulnerable devices are then organized to send junk traffic to online websites that eventually crash from the huge volume of traffic coming from multiple devices, sometimes in the hundreds of thousands or millions.

Outages Caused by Mirai Malware on October 21, 2016

neil iot hack

(Source: Downdetector.com)

This latest attack caused the US Department of Homeland Security (DHS) to hold a conference call with 18 major communication service providers to develop a new strategy for securing IoT devices. DHS officials said its National Cybersecurity and Communications Integration Center is coordinating with police, private firms, and researchers to better fend off future attacks that exploit the mushrooming number of IoT devices.

Two of the hardware manufacturers involved in the attacks have said they would take steps to reduce the risks from such attacks. Chinese firm Hangzhou Xiongmai Technology, which makes surveillance camera components, said it was recalling some of its products sold in the United States. Dahua Technology, also a Chinese company, said some of its older cameras and video recorders are vulnerable to attacks when a user has not changed default passwords. Dahua is now offering firmware updates from its website to fix the problem, and is offering a discount to customers who want to exchange their device.

These are positive, after-the-attack steps, but the damage done still leaves a cloud hanging over the IoT trend, particularly among consumers. A new survey finds 40% of respondents saying they have no confidence in the safety, security, or privacy of connected devices such as web-enabled thermostats or appliances, according to IT security firm ESET. Moreover, more than half of respondents indicate they are discouraged from buying IoT devices because of cybersecurity concerns.

Success Hinges on Promise of Security

I still count myself among the many proponents of the IoT. The world of connected devices, systems, and services promises many helpful applications and use-cases that benefit users, particularly in terms of energy efficiency and convenience. However, the constant drip of hacks and the misuse of connected devices needs to stop. The vendors involved need to do a better job of securing the devices and helping end users to do the same. Otherwise, the promise of an IoT market will not be met, and the lost opportunity could mount to millions or billions of dollars. Security needs to come front and center for all parties. If the IoT trend is of interest, Navigant Research has just launched a new IoT research service that is worth checking out.

 

IoT Standards Groups Merge, Paving Way for Increased Device and System Interoperability

— October 18, 2016

AnalyticsOne of the key barriers hampering wider adoption of Internet of Things (IoT) technologies is now on course to come down. Two leading IoT standards groups, Open Connectivity Foundation (OCF) and AllSeen Alliance, have merged, setting up the next steps toward standardization.

The two organizations issued similar statements about their plans on October 10, saying the combined groups will now operate under the Open Connectivity Foundation name. For now, though, work will continue in parallel for both the open-source OCF IoTivity project and AllSeen Alliance’s AllJoyn software framework. Eventually the two efforts will merge into a single IoTivity standard.

By joining forces, the enhanced OCF is on track to make interoperability among IoT devices and systems more seamless and secure for all stakeholders, including developers, hardware vendors, and end users. This means a smart thermostat should be able to work well and securely with a smart plug, a smart appliance, or a connected door lock.

Other Standards Being Developed

There are other industry players also working on standards, meaning a true standard is still elusive and the market is still fragmented. For example, Thread Group, backed originally by Google, is another entity working to create IoT interoperability standards. Google engineers are also developing a communications language for devices called Weave, a part of the company’s Brillo project, which aims to create an embedded OS for devices.

Nonetheless, the OCF and Thread Group should be credited for working toward a more harmonious market. Last July, OCF and Thread said they plan to cooperate even though they have different aims: Thread is developing a low-power mesh network layer, while OCF is focusing on an application layer that would run on top of the network. OCF is also working in partnership with two other groups, the Industrial Internet Consortium and the European IoT EEBus initiative. In addition, Thread Group has agreed to work with the ZigBee Alliance on a program to ensure interoperability.

A Market in Flux

The trend is moving toward IoT standards, but right now the market is in flux, and the uncertainty has a dampening effect on adoption. While the merger of OCF and AllSeen is a significant step forward, more work is needed among many technologies or groups in this space, like the LoRa Alliance, narrowband Long-Term Evolution (NB-LTE), 5G, and the IEEE 802.11ah Wi-Fi standard. Bottom line: The IoT interoperability game is more of a marathon than a sprint, with many players vying for attention and market-mind share. The process could take 5 years or more before things settle down. Navigant Research’s recently launched IoT research service focuses on the IoT trend from an energy perspective and will continue to track changes in the interoperability issues of the market.

 

Smart Home Market Plugs through Awareness Gaps and Hacks

— October 4, 2016

Home Energy ManagementConsumers have an awareness gap when it comes to understanding smart home/Internet of Things (IoT) capabilities. That’s the upshot of a recent survey by Bosch, which sampled more than 6,000 consumers in the United States and Western Europe.

This is one of those good news/not so encouraging news situations for industry stakeholders. On the one hand, two-thirds of the survey respondents were aware of smart home technology that can automatically turn off the lights when you walk out the front door. However, less than a quarter of those same respondents (22%) are aware that with enabled services, an oven can suggest recipes—though I’m not sure such oven technology is a big driver of adoption. (Foodies might disagree.)

Interestingly, saving energy was the most appealing aspect of living in a smart home, with 69% of all respondents, regardless of country, saying this was an attractive benefit. Spanish (71%), British (72%), and French (75%) respondents were particularly keen on saving energy.

Overall, French respondents were the most confident about what smart home technology can do compared to those from the United Kingdom, United States, or Austria. Respondents from Germany and Spain were the least confident about smart home technology. Not surprisingly, awareness of smart home technology decreased with age, with those in the 25-to-34 age bracket the most likely to understand the current state of what is possible.

The highest barrier to adoption of smart home technology was price, according to respondents, with 60% saying this was holding them back from embracing smart home IoT-type products.

Smart Home Hacks

Perhaps more concerning to the industry is another disturbing report about hacking of devices. According to several accounts, hackers recently hijacked as many as a million Chinese-made security cameras, digital video recorders, and other devices to mount a massive distributed denial of service (DDoS) attack. Among those infected were French web hosting provider OVH and the website of well-known American security researcher Brian Krebs. The attack on Krebs’ site was so crippling that network provider Akamai had to cancel his account because too many resources were being used in trying to defend it. Krebs himself concluded wisely, “We need to address this as a clear and present threat not just to censorship but to critical infrastructure.”

That was one of the clear message from Navigant Research’s recent webinar, The IoT Transformation of Buildings. Security against hacks must be priority number one in the connected IoT world we now inhabit, and those in the energy sector must continue to demand this protection as a priority from technology suppliers and ensure that security is paramount in all of their deployments.

SpaceX

Quick pivot: No matter what one thinks of Elon Musk and his companies, it is worth noting his bold plan to colonize Mars, which he announced on September 27. There is an energy angle to this, too, as Musk’s Dragon spacecraft will utilize two solar arrays for producing power. Two YouTube videos help explain what this is all about. There might be plenty of good reasons to be skeptical of Musk’s vision and plan. But for the moment, let’s give him credit for being a trailblazer, explorer, and dreamer. We need big thinkers like him, even if we have doubts about their ideas.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Electric Vehicles, Finance & Investing, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Smart Transportation Program, Transportation Efficiencies, Utility Innovations

By Author


{"userID":"","pageName":"Neil Strother","path":"\/author\/neilstrother","date":"12\/2\/2016"}