Navigant Research Blog

Officials Push Support of IoT as Trend Accelerates

— April 6, 2016

??????????????????Your neighbors and mine might not recognize the Internet of Things (IoT) trend just yet, but signs of market acceleration continue to abound. Even politicians are awakening to the value of increasingly connected devices—and not just officials in the United States. At the same time, tech companies persist in their efforts to harness the trend.

A bipartisan group of four U.S. senators recently issued a statement through the influential Consumer Technology Association (CTA) website calling for “a more comprehensive and robust national strategy that encourages development of the Internet of Things and enable our government to be leaders in adoption of these new tools.” The four senators—Cory Booker (D-NJ), Kelly Ayotte (R-NH), Brian Schatz (D-HI), and Deb Fischer (R-NE)—are seeking “comprehensive federal policies that balance stakeholder concerns with connectivity, innovation, security and privacy concerns.” The senators are doubling down on a resolution they passed last year that called for “a comprehensive strategy to spur growth of the Internet of Things.”

In India, too, politicians are seizing the moment to push the IoT. Cabinet members in the state of Andhra Pradesh have approved a first-of-its-kind policy that calls for turning the state into an IoT hub by 2020. The officials envision active participation with private sector companies and the creation of 50,000 jobs in different IoT verticals.

Increasing Interoperability

Among technology companies, ongoing activity paves the way for greater interoperability among IoT products and services. Heavyweights Microsoft and Qualcomm recently joined the Open Connectivity Foundation (OCF), an industry standards body aimed at creating IoT solutions and devices that work seamlessly. The OCF is the new name of what used to be called the Open Interconnect Consortium (OIC). Qualcomm joining this group turned a few heads, since the OIC (now OCF—keeping up?) was cofounded by rival chipmaker Intel. It would appear the two chipmakers have come to some sort of peaceful coexistence, which bodes well for reducing IoT silos. Nonetheless, fragmentation will persist, as key players such as Amazon, Alphabet (Google/Nest), and Apple are not among the current 167 OCF members.

Another important group, the Bluetooth Special Interest Group (SIG), has unveiled details of a new specification for IoT devices that would allow them to communicate with greater energy efficiency. The Bluetooth SIG said its new Transport Discovery Service (TDS) could be used for conserving battery life in a device. This might appear to be a small step forward, but when billions of devices—many of them operating on batteries—join the IoT ecosystem, saving energy becomes critical to success.

Connected Consumers

Consumers themselves see the value of connected devices, even if they don’t recognize them as part of the IoT trend. Among respondents to an online Harris Poll of 2,225 adults, 11% said they owned a smart thermostat, and 9% said they had a smart, wireless home security-monitoring system. Moreover, one of the hotter in-home IoT devices is Amazon’s Echo. Exact sales figures for the Echo are not available, but some estimates indicate it has outpaced speakers sold by rivals. Apple cofounder Steve Wozniak is a big fan, calling the Echo the “next big platform for the near future.”

For utilities, harnessing the IoT trend presents a growing challenge that many have yet to face. As customers adopt IoT hardware and software solutions behind the meter, utilities need a strategy for services that can keep them relevant and not just bystanders. Navigant Research’s new IoT Enabled Managed Services report provides some context and an IoT strategy for utilities to follow. There’s no point in being like those neighbors who just get sucked along and miss out on the opportunities.


Big New York Smart Meter Rollout Plans Take Shape, but Issues Remain

— March 30, 2016

??????????????????Consolidated Edison (Con Ed), the largest utility in New York, recently received approval of its ambitious plans for a smart meter rollout, but the latest details point to some concerns about paying for the requirements and more details about customer engagement.

The plan, approved by the New York Public Service Commission (PSC), calls for the installation of approximately 3.5 million smart electric meters and for some 1.2 million gas meters to be deployed in Con Ed’s service territory starting next year, with an expected completion by 2022.

But in the announcement, the commission said its approval was contingent on the utility providing a detailed plan for providing continued engagement with customers and third parties. In addition, the commission expects 15-minute meter reads for residential customers, whereas the original proposal called for hourly data from meters. With the more frequent reads, the issue of charging fees, if any, for providing the more granular data has yet to be resolved. For non-residential meters, the meter data is to be at 5-minute intervals.

Program Questions

In addition, there are concerns about how Con Ed will implement the Green Button Connect program, which is a federally sanctioned initiative aimed at giving residential customers easy online access to their detailed energy consumption data. Originally, Con Ed indicated hourly data would be available at no charge. But now a group called Mission:data, which represents third-party companies like SolarCity, Stem, Bidgely, PlotWatt, and EnerNOC, has raised the issue of whether Con Ed will be charging a fee for data access. Con Ed has until the end of July to submit new details about data access and who will have to pay.

Undoubtedly, the smart meter rollout envisioned by Con Ed will eventually be deployed and customers should benefit by having a more modern and flexible system. But the devil, as always, is in the details, and when it shakes out, some of the hoped-for capabilities might be less than expected. And third-party energy service providers might be less than satisfied. As we’ve seen with other smart meter implementations—the United Kingdom’s complicated deployment comes to mind—the complexity of an advanced metering infrastructure rollout can sometimes be overwhelming, and the real costs not readily apparent. Bumps in the road have become commonplace, especially with large projects, but a smarter grid is still attainable.


Could Bitcoin Really Cut Electric Bills?

— March 2, 2016

Programming code script abstract screen of software developer.The idea seems far-fetched at first, using Bitcoin’s foundational virtual currency technology to reduce your electric bill. But upon further study, the notion has a certain appeal.

The idea springs from a group of Accenture technologists in France who have created a smart plug based on Bitcoin’s blockchain transaction database system. For currency, Bitcoin uses an automated ledger called a blockchain that processes deals through a private network of computers with shared software that verifies and publicly tracks where coins are spent. A key piece of Bitcoin’s technology is a cryptographically signed acknowledgement (essentially a receipt) that verifies a transaction among all players. Traditional accounting has a debit and a credit, producing a double-entry bookkeeping system; with Bitcoin, the cryptographic receipt adds a third element, becoming a sophisticated triple-entry system.

Back to the smart plug. The Accenture device would adjust electricity consumption minute-by-minute and use blockchain functionality to shop different rates and sign up for a lower fee if it finds one. In essence, the plug has an embedded smart contract working on the owner’s behalf. So far, Accenture’s plug is merely a proof of concept, though it could be employed, for instance, to help lower-income customers pay for their energy. According to Accenture’s research, in aggregate, these customers in the United Kingdom could conceivably save more than $919 million per year.

Other Smart Contracts

Expanding on this idea, a smart meter or a number of electrical devices beyond a plug could have an embedded smart contract and provide whole-home energy cost benefits to consumers. Also, the concept would seem to fit neatly into the expanding residential Internet of Things (IoT) trend, a market that is explored in some detail in a recent Navigant Research report.

This is a potentially disruptive technology. Customers could theoretically avoid dependence on a single electricity supplier, though a new player, such as Google or Amazon, could eventually emerge and dominate a system dependent on Internet transactions and the IoT. This would assume, of course, that electric utilities and regulators would agree to such a scheme, which is not likely in the near- to mid-term. How many utility operators would easily welcome a decentralized system in which they could lose—or gain—customers from moment to moment? Not many. Nonetheless, the blockchain idea could give consumers new advantages and bring about more decentralized energy grids. Really.


Smart Meter Projects Crank Up for 2016 and Beyond

— February 26, 2016

Control panelThe smart meter market is picking up new momentum as 2016 unfolds. Announcements for a number of significant projects and partnerships signify an expanding market, which bodes well after a somewhat sluggish past few years.

In the United States, New York utility Con Edison has chosen Aclara to provide nearly 5 million electric and gas meters as part of its advanced metering infrastructure (AMI) deployment. Con Ed will utilize Silver Spring Networks‘ technology for its communications network, and IBM was selected as the IT system integrator. The Con Ed approach is unique for its view of what a modern utility could look like, and the utility is driving this initiative at a time when New York is rethinking its energy future under a plan known as the Reforming the Energy Vision, or REV. Con Ed’s plan includes the capability for easier integration of renewable energy sources, gaining real-time grid insights, and reducing and repairing outages more quickly, according to Eric Dresselhuys, Silver Spring’s executive vice president of global development. The Con Ed project still awaits final regulatory approval, but it does have the green light to begin backend IT work in anticipation of installing meters starting in early 2017.

Another smart meter project of note is the one announced recently by Memphis Light, Gas and Water (MLGW). The largest U.S. three-service public utility, MLGW selected Honeywell (which acquired Elster in December 2015) as the provider of one million electric, gas, and water meters to be deployed over the next 5 years. The utility will install the meters using Honeywell’s Elster EnergyAxis smart meter technology in a deal valued at $200 million.

Projects Worldwide

Outside the United States, Mexico’s state-owned utility Comision Federal de Electricidad (CFE) has awarded Landis+Gyr a new contract to supply an AMI system in the states of Campeche and Quintana Roo in CFE’s Peninsular Division. The deal calls for Landis+Gyr to supply its Gridstream AMI solution, including a radio frequency (RF) mesh network and nearly 96,000 advanced meters. The main objectives of the system upgrade are to reduce non-technical line losses, improve efficiency, and enhance service delivery to high-use customers. The project is part of CFE’s long-term plan to install a total of 30.2 million smart meters by 2025.

In South Asia, two major Pakistani utilities have finished the rollout of 50,000 smart meters, according to MicroTech Industries (MTI), a Lahore-based technology vendor. In addition to supplying the three-phase meters, MTI also handled installation, implementation, communications, and hosting services for the projects at the Peshawar Electric Supply Company (PESCO) and the Multan Electric Power Company (MEPCO).

In Europe, utility E.ON and technology provider Siemens have announced a partnership to develop and deploy smart metering technology solutions for the German market. The country is in the midst of preparations to install smart metering beginning this year as part of a new overall energy mix plan. The two companies plan to offer their expertise, with Siemens’ EnergyIP application platform serving as the technical component for their joint offering.

There is still plenty of runway left for the deployment of smart metering technology, and projects continue to unfold across the globe. These advanced metering solutions form the backbone of grid modernization, which leads to greater efficiencies and help underpin Navigant’s Energy Cloud vision of a decentralized grid. Expect many more similar smart meter projects to be announced over the remainder of this decade and beyond, as noted in Navigant Research’s Smart Meters report.


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