Navigant Research » Blog http://www.navigantresearch.com Wed, 23 Apr 2014 06:02:35 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 Opower IPO Signals Growing Market for Energy Management Tools http://www.navigantresearch.com/blog/opower-ipo-signals-growing-market-for-energy-management-tools http://www.navigantresearch.com/blog/opower-ipo-signals-growing-market-for-energy-management-tools#comments Tue, 22 Apr 2014 22:11:16 +0000 http://www.navigantresearch.com/?p=64543 Cloud-based energy software provider Opower intends to raise up to $115 million in its upcoming initial public offering (IPO).  The company plans to sell 6.1 million shares at a price range of $17 to $19 per share, giving it an initial market cap of about $854 million. Opower has built a solid reputation with dozens of [...]]]>

Cloud-based energy software provider Opower intends to raise up to $115 million in its upcoming initial public offering (IPO).  The company plans to sell 6.1 million shares at a price range of $17 to $19 per share, giving it an initial market cap of about $854 million.

Opower has built a solid reputation with dozens of utilities that are being driven by regulators to encourage residential customers to use electricity more efficiently.  Opower’s technology analyzes utility meter data and then sends residential customers regular reports showing how their energy use compares to their neighbors.  Typically, Opower has delivered residential savings in the 2% to 3.5% range.  Last year the company rolled out a behavioral demand response (DR) program now used by Baltimore utility, Baltimore Gas and Electric (BGE).  Despite its growth, Opower is still not profitable.  In 2013, it generated nearly $89 million in revenue, up from almost $52 million in 2012, but lost a little more than $14 million, greater than its 2012 loss of $12.3 million.

Still Seeking Profits

Other companies in the same energy management arena as Opower have found traction, if not yet profits.  EcoFactor offers a software-as-a-service (SaaS) platform that Nevada utility NV Energy uses to help its residential customers become more energy efficient.  Using EcoFactor’s cloud-based platform and smart thermostats, NV Energy customers who participate in DR events have been able to reduce their air conditioning use by up to 12% and whole-house electric consumption by 6% for a full year.  EcoFactor also has a significant deal with cable operator Comcast, under which its platform powers a service that discovers the heating and cooling patterns of a home and makes automatic adjustments to a smart thermostat based on occupant temperature settings, real-time weather data, and the house’s thermal characteristics.

Similarly, thermostat maker Energate and networking platform provider Silver Spring Networks were chosen by OGE for its home energy management (HEM) strategy.  By deploying Energate’s thermostats and utilizing Silver Spring’s DR capabilities, OGE has successfully launched a service that enables participating residential customers to reduce electricity consumption and save an average of $191 during a summer cooling season.

Slow But Steady

Google energized the HEM space in January 2014 when it announced its acquisition of Nest Labs, maker of the popular, though pricey, learning thermostat.  The $3.2 billion deal, now complete, signaled that Google was ready to get back into HEM (Google dabbled in energy management with its PowerMeter project but shut it down in September 2011 when it failed to attract enough users).  This move helps validate the HEM market.

Despite the slow adoption of HEM programs, these recent market developments portend at least steady market growth in the near- to mid-term, as noted in Navigant Research’s recent report, Home Energy Management. To gain more insight about this trend, you can view the replay of our webinar, Home Energy Management – New Players, Technology Update, and Market Outlook.  To see it, click here.

]]>
http://www.navigantresearch.com/blog/opower-ipo-signals-growing-market-for-energy-management-tools/feed 0
How to Save a Half Billion Gallons of Diesel http://www.navigantresearch.com/blog/how-to-save-a-half-billion-gallons-of-diesel http://www.navigantresearch.com/blog/how-to-save-a-half-billion-gallons-of-diesel#comments Thu, 17 Apr 2014 00:14:29 +0000 http://www.navigantresearch.com/?p=64349 Trying to reduce fuel use by Class 8 over-the-road sleeper cab tractors is a key challenge facing the trucking industry and regulators.  The trucks use a tremendous amount of fuel (averaging about 6.6 mpg and traveling 80,000 to 100,000 miles per year) and have to provide the driver comfort as the trucks stop overnight.  In [...]]]>

Hosesteps_webTrying to reduce fuel use by Class 8 over-the-road sleeper cab tractors is a key challenge facing the trucking industry and regulators.  The trucks use a tremendous amount of fuel (averaging about 6.6 mpg and traveling 80,000 to 100,000 miles per year) and have to provide the driver comfort as the trucks stop overnight.  In order to provide the overnight creature comforts (sometimes referred to as hotel power), the trucks need to have a source of energy, whether an offboard source, the large truck diesel engine, or a small energy source called an auxiliary power unit (APU).  The APU industry has been espousing the fundamental truth that utilizing APUs reduces fuel use, emissions, and associated costs by reducing idle times of the large truck engines.

Yet, one of the challenges is trying to understand just how much fuel and emissions are being offset by APUs.  Having spent a large amount of my time at the Mid-American Trucking Show (MATS) this past March, I was able to speak with almost every APU manufacturer displaying at the MATS and have been able to pull together an estimate for these savings.

First, a little more background.  It is not entirely clear when APUs first became widely available, but by the early to mid-2000s, Bergstrom, Thermo King, Carrier, and RigMaster, along with a number of other competitors, were all offering APU systems.  Today there are a lot of commonalities between the machines.  The vast majority of APUs are of two designs, either all-electric or diesel-powered.  Diesel-powered APUs use diesel from the truck’s fuel tank to fuel 2-cylinder small diesel engines from Yanmar, Caterpillar, Perkins, and others.  All-electric systems store energy in absorbed glass mat lead-acid batteries that can then be used to provide power to air conditioning compressors or inverters.  Other technologies that are being tested include fuel cells, lithium ion batteries, and compressed natural gas systems, but the cost-effectiveness of these systems remains essentially unmarketable.

Methodology and Findings

For the purpose of this macro analysis, I had to make several assumptions when it comes to the number of APUs on the road.  First, since there isn’t consensus on when the Class 8 sleeper cab APU market even started, I considered the start date to be roughly 2005, with about 35,000 units on the road by the end of that year.  While recognizing that this is a rough estimate, this at least gave me a starting point for calculating the scrappage rate of APUs.  Based on conversations during MATS and some combing of forums, I assumed the average lifespan of an APU to be about 6 years, and from there the number of APUs on the road today, which is estimated to be about 309,000 units, with about 25% being all-electric.

These 309,000 units translate into 486.5 million gallons of diesel saved by APUs on Class 8 sleeper cabs in 2013 (or about 1,576.5 gallons per APU).  Put into economic terms, at the average retail price of $3.89 per gallon for diesel in January 2014, the fuel costs offset by APUs are a staggering $1.89 billion.  Even taking into consideration the cost of new APU units ($8,000 estimated) and maintenance ($145 annually), the offset is $1.49 billion.  Put into environmental terms, the Argonne GREET model calculated the greenhouse gas emissions per gallon of diesel fuel consumed to be 20.2 lbs carbon dioxide equivalent (CO2-eq) per gallon of diesel fuel, so the emissions offset are 9.827 billion lbs of CO2-eq.  Of course, this analysis does not take into account the 116 truck stops that have electrification to allow drivers to shut off the engines overnight, which would further improve these fuel savings figures.

Estimated Gallons of Diesel Used by Class 8 Sleeper Cabs for Hoteling: 2013Dave H. APU chart for blog

(Source: Navigant Research)

Certainly, from a macro standpoint, it’s hard to argue the benefit of APUs.  Fleets with a large number of trucks are likely to see cost benefits that are compounded over a number of trucks.  The picture is more complicated for truck owner-operators that have to justify the extra upfront cost and calculate the payback on a single unit.  This payback typically ranges between 2 and 4 years depending on the APU selected and the cost of fuel, which makes the owner-operator market seem like a good place for some targeted tax incentives.

]]>
http://www.navigantresearch.com/blog/how-to-save-a-half-billion-gallons-of-diesel/feed 0
The Link between Home Ownership and Energy Efficiency http://www.navigantresearch.com/blog/the-link-between-home-ownership-and-energy-efficiency http://www.navigantresearch.com/blog/the-link-between-home-ownership-and-energy-efficiency#comments Wed, 16 Apr 2014 14:58:19 +0000 http://www.navigantresearch.com/?p=64313 The world’s population, and how that population is housed, is undergoing a rapid transformation. Urbanization and its impact on sustainability have been well studied in recent years. Indeed, 70% of the world’s population may live in cities by the second half of the century, but will they rent or own – and how will that affect [...]]]>

The world’s population, and how that population is housed, is undergoing a rapid transformation. Urbanization and its impact on sustainability have been well studied in recent years. Indeed, 70% of the world’s population may live in cities by the second half of the century, but will they rent or own – and how will that affect energy efficiency?

Home ownership rates, like urbanization, are undergoing broad changes. Unlike urbanization, the direction and magnitude of the changes in home ownership vary regionally. Nonetheless, the rate of home ownership is on a wild ride. In the United States, home ownership is at an 18-year low. Meanwhile, Germany, famed for its renting culture, is facing a property rush.

The ownership of a home should influence investment decisions in energy efficiency. Renters have little incentive to invest in lowering utility bills if the payback period is longer than the expected occupancy. Why would a renter install an LED light bulb that lasts for 20 years if he or she plans to move out in 2 years?  The value proposition of energy efficient investments is similarly poor for landlords.  For many improvements, such as better insulation and more efficient HVAC, the benefits are largely felt by tenants, but the cost is incurred by landlords.  In fact, data from the Energy Information Administration indicates that renters consume on average 33% more energy per square foot than homeowners do.  Home ownership has a profound impact on energy efficiency.

Household Energy Consumption, United States: 2009

Household Energy Consumption, United States: 2009

(Source: U.S. Department of Energy)

However, what about Germany? It is a country with a historically low ownership rate and a strong culture of renting, but it has been a beacon of innovation for home energy efficiency.  The first Passivhaus and the Passivhaus Institut are located in Germany, as is a house that generates enough electricity to meet its own needs and power a car.  Of course, ownership is only one factor.  Government regulation has played a large role in establishing Germany’s market for energy efficient homes.  In contrast, U.S. innovation in home energy efficiency is often driven by what homeowners want rather than what regulations dictate.  The Nest Learning Thermostat, for instance, was developed by Tony Fadell because he realized there was value in expanding the limited features of conventional thermostats.  As fewer Americans and more Germans buy houses, it will be interesting to see how dynamics in innovation shift. After all, property ownership does change your world view.

]]>
http://www.navigantresearch.com/blog/the-link-between-home-ownership-and-energy-efficiency/feed 0
Automakers Look to Stay Relevant in Rapidly Changing Mobility Landscape http://www.navigantresearch.com/blog/automakers-look-to-stay-relevant-in-rapidly-changing-mobility-landscape http://www.navigantresearch.com/blog/automakers-look-to-stay-relevant-in-rapidly-changing-mobility-landscape#comments Tue, 15 Apr 2014 21:48:35 +0000 http://www.navigantresearch.com/?p=64274 How fast is the urban mobility landscape changing?  Last year, when Navigant Research published its Carsharing Programs report, San Francisco, California-based rideshare company Lyft operated in around four U.S. cities and touted 30,000 members.  A year later, Lyft operates in 30 U.S. cities and, in April, the company raised $250 million in a Series D [...]]]>

How fast is the urban mobility landscape changing?  Last year, when Navigant Research published its Carsharing Programs report, San Francisco, California-based rideshare company Lyft operated in around four U.S. cities and touted 30,000 members.  A year later, Lyft operates in 30 U.S. cities and, in April, the company raised $250 million in a Series D investment round.  Lyft immediately began making moves to secure greater market share by lowering its prices in all cities by up to 20%.  Meanwhile, Uber, the U.S. leader in app-based car services, continues to add new UberX service locations, including one in Singapore, after raising $258 million in funding in August 2013.

Granted, Uber and Lyft are not carsharing companies exactly.  They are mainly alternatives to taxi or livery services.  But they do share DNA with carsharing.  These companies operate somewhat like peer-to-peer (P2P) carsharing services, such as Relay Rides, which also serve as a way for non-professional drivers and those in need of a car to connect, as well as to maximize the utility of someone’s underutilized car.  And, P2P car services could compete with one-way carsharing, a business model that has taken off in the past few years thanks to companies like Autolib’, car2go, and DriveNow.  These services are all part of the new collaborative economy, which depends on a radically new attitude toward car ownership and the ubiquity of smart devices, apps, and software that makes the collaboration as seamless as possible.

Changing Times

The dramatic growth of P2P car services is just one example of how dramatically the transportation landscape is changing, with a clear shift away from the privately owned car as a primary transportation mode.  Yes, this change is still largely concentrated in major urban areas and in developed countries.  Meanwhile, rising car markets (like China) continue to show increases in sales to first-time car buyers, even as the pace of auto sales growth has slowed somewhat.  Still, in a world that is becoming increasingly urbanized, and with the rise of megacities (cities with populations of 10 million or more), this mobility transformation is going to spread.  In the world’s large cities, automakers will find their businesses increasingly squeezed by a range of other transportation options, including the P2P car services and carsharing.

How much of a threat will these options be to car companies?  Carsharing will cut into car sales to some degree, but based on Navigant Research’s forecasts, vehicle sales reductions directly related to carsharing will be tiny compared to the total passenger car market, which globally reached around 82 million in 2013.  But the broader transformation of urban mobility will have an impact on auto sales, as the many options for personal mobility make it easy to forgo buying a car during the time that fuel costs will be rising, along with the indirect costs of driving such as parking and traffic congestion.

This helps explain automakers’ interest in offering carsharing, which has the potential to provide substantial revenue.  BMW and Daimler in particular each came roaring into this market in the last 18 months, capturing significant market share in the European cities where they operate.  Daimler reports having 600,000 members in its car2go service, while BMW reports 215,000 members in DriveNow.  In the Navigant Research report Alternative Revenue Streams for Automakers, revenue from original equipment manufacturer (OEM)-owned carsharing services is forecast to be in the billions as overall demand for collaborative car ownership grows and more OEMs enter this market.  Carsharing represents a prime opportunity for automakers to ensure they play a central role in the changing mobility landscape.

]]>
http://www.navigantresearch.com/blog/automakers-look-to-stay-relevant-in-rapidly-changing-mobility-landscape/feed 0
Decoupling H, V, and AC: DOAS and More http://www.navigantresearch.com/blog/decoupling-h-v-and-ac-doas-and-more http://www.navigantresearch.com/blog/decoupling-h-v-and-ac-doas-and-more#comments Mon, 14 Apr 2014 23:27:41 +0000 http://www.navigantresearch.com/?p=64267 Buildings have long been a target for energy efficiency improvements, as they consume a substantial portion of the world’s energy supply (about 40% in the United States).  More recently, the detrimental effects of poorly designed buildings have been established and buildings have been identified as an area to improve the health of occupants.  Though [...]]]>

Buildings have long been a target for energy efficiency improvements, as they consume a substantial portion of the world’s energy supply (about 40% in the United States).  More recently, the detrimental effects of poorly designed buildings have been established and buildings have been identified as an area to improve the health of occupants.  Though heating, ventilation, and air conditioning (HVAC) systems can be used to accomplish both of these goals, they typically cannot achieve both goals simultaneously.  Conventional approaches to improving indoor air quality (IAQ), such as increasing the ventilation rate or increasing filter efficiency, require using more energy, while increases to energy efficiency (such as improving a building’s seal to reduce infiltration) can have adverse impacts on IAQ.  However, addressing the requirements of heating, ventilation, and air conditioning separately have produced innovative approaches to improve health and reduce costs.

A Flawed Paradigm

Heating, ventilation, and air conditioning are generally lumped into a single system.  Why not?  For the most part, each task requires a box with fans and coils.  Using a single rooftop unit or air handling unit to provide ventilation, filter recirculated air, and produce comfortable temperatures is convenient.  Unfortunately, a single system can have a difficult time maintaining adequate control over disparate conditions.  In practice, adequately addressing IAQ takes a back seat to maintaining space temperature.

In fact, there is evidence that traditional HVAC designs systematically under-ventilate.  Thermostatically-controlled variable air volume (VAV) systems do a poor job of matching airflow to ventilation requirements, particularly in conference and meeting rooms when they are first occupied.  More people in a room increases the generation of both heat and carbon dioxide (CO2).  However, thermostats have a dead-band, an allowable deviation between the actual and desired temperature to avoid short-cycling and simultaneous heating and cooling. As a result, there is a time lag between when the space is occupied and when more than the minimum airflow is delivered.  Moreover, depending on the conditions, the 55°F supply air can offset the temperature rise quickly and return to the minimum position as the CO2 of the space continues to rise.  Theoretically, the minimum damper position should meet the ventilation requirements of a fully occupied room, but improper damper minimums or poor controls integration can lead to under-ventilation.

Separation of IAQ and Thermal Comfort

Decoupling ventilation requirements from thermal comfort through a dedicated outside air system (DOAS) is one way to address this ventilation issue and improve IAQ.  A DOAS provides 100% outside air to a building to meet the building’s ventilation needs.  Typically, it is equipped with some form of energy recovery to precool and dehumidify or preheat and humidify supply air from what is captured from exhaust air.  As a result, the system ensures adequate ventilation and prevents the spread of contaminants between spaces.  Including a DOAS in a building design improves a building’s IAQ by managing it separately from heating and cooling requirements.

However, improving IAQ does not have to be part of HVAC at all.  Introducing filters and outside air into a system that is already designed to move air is convenient, but the same effect can be accomplished by other means.  Adding plants into a space, for instance, can help reduce CO2 and ozone.

The future of IAQ might not be in HVAC, but in the building itself.  Lauzon, a North American flooring manufacturer, has developed a flooring-based solution, called Pure Genius coating, to manage volatile organic compounds (VOCs).  The coating uses photocatalytic titanium dioxide to break down VOCs into water and CO2.  Of course, when maintaining IAQ, converting VOCs to CO2 is a bit like robbing Peter to pay Paul.  However, it shows the advances that materials are making.  Solutions to the current limitations of HVAC equipment might come from outside the mechanical universe rather than from incremental engineering improvements.

]]>
http://www.navigantresearch.com/blog/decoupling-h-v-and-ac-doas-and-more/feed 0
Solar Market for Base of Pyramid Not So Pico http://www.navigantresearch.com/blog/solar-market-for-base-of-pyramid-not-so-pico http://www.navigantresearch.com/blog/solar-market-for-base-of-pyramid-not-so-pico#comments Mon, 14 Apr 2014 22:37:34 +0000 http://www.navigantresearch.com/?p=64258 In an upcoming report on pico solar lighting products (<10W) and solar home systems (<200W) sold primarily to rural communities in Africa and Asia, I cover the unit sales, revenue, and capacity of these small solar photovoltaic systems globally.  One of the most important trends covered in the report is that pico solar has transitioned [...]]]>

In an upcoming report on pico solar lighting products (<10W) and solar home systems (<200W) sold primarily to rural communities in Africa and Asia, I cover the unit sales, revenue, and capacity of these small solar photovoltaic systems globally.  One of the most important trends covered in the report is that pico solar has transitioned from a humanitarian aspiration to big business – more than $100 million in 2014.  Corporate involvement in rural electrification has traditionally come in the form of corporate social responsibility initiatives, but real money is now flowing to solar companies serving the base of the pyramid market.  The success of a number of off-grid solar lighting companies and social enterprises has attracted interest from major corporations such as Panasonic, Schneider Electric, and Philips, as well as funding from investors.  Some of the more notable investments include:

  • In early 2014, d.light raised $11 million in Series C funding from DFJ, Omidyar Network, Nexus India Capital, Gray Ghost Ventures, Acumen Fund, and Garage Technology Ventures.  The company is one of the leading pico solar manufacturers, and has now raised $40 million and sold an estimated 6 million pico solar systems reaching 30 million people.
  • In early 2014, Persistent Energy Partners acquired Impact Energies, a pay-as-you-go, off-grid solar service provider working in West Africa that has reached 30,000 customers since 2011.  The renamed company, Persistent Energy Ghana, installs village solar microgrids and solar home systems.
  • In late 2013, Khosla Impact invested $1.8 million in a Series A round with BBOXX, a U.K.-based company that sells portable solar kits ranging from 7W to 185W and plug-and-play solar systems that range between 2 kW and 4 kW.  The company also provides a mobile pay-as-you-go service enabled by remote battery monitoring, which was the primary interest of Khosla.
  • In 2012, Greenlight Planet, one of the leading designers and distributors of solar light-emitting diode home lights, raised $4 million from Bamboo Finance and Dr. P.K. Sinha, co-founder of ZS Associates.  The investment followed previous financing by Dr. Sinha.  Greenlight Planet has sold more than 1.8 million solar lamps since the company was founded in 2008.
  • In 2012, Barefoot Power, one of the largest pico solar manufacturers, raised $5.3 million from three social investment funds (d.o.b. Foundation, ennovent, and Insitor Fund), existing shareholders (The Grace Foundation and Oikocredit Ecumenical Development Cooperative), and a number of private angel investors.

The full report will be released in the next few weeks.  It will discuss industry market drivers and challenges, and includes more than 20 company profiles and country-specific forecasts from 2014 to 2024.

]]>
http://www.navigantresearch.com/blog/solar-market-for-base-of-pyramid-not-so-pico/feed 0
Honeypots Teach Us About Attackers http://www.navigantresearch.com/blog/honeypots-teach-us-about-attackers http://www.navigantresearch.com/blog/honeypots-teach-us-about-attackers#comments Fri, 11 Apr 2014 14:42:22 +0000 http://www.navigantresearch.com/?p=64084 Security researchers will try almost anything to find out who is attacking their clients and how.  One of their best-loved and most effective techniques is a honeypot.  First developed about a decade ago, a honeypot is a decoy system or network – a tempting target for attackers that is not really a target at all, [...]]]>

Security researchers will try almost anything to find out who is attacking their clients and how.  One of their best-loved and most effective techniques is a honeypot.  First developed about a decade ago, a honeypot is a decoy system or network – a tempting target for attackers that is not really a target at all, but a trap.  The objective is to lure attackers into the honeypot and then watch how they work.  Attackers’ methods are almost like fingerprints; researchers who are familiar with a number of attackers can often identify the attackers simply by watching their step-by-step process of discovery through the honeypot.  Researchers do have other methods as well, such as tracing IP addresses or even fingerprinting the attackers’ browser – adding source code to the attackers’ browser that reveals more about their identity.

Attackers are, of course, aware that honeypots exist, so preparation of an effective honeypot must be extremely detailed.  To set up a honeypot requires a fair bit of planning to make the target look as realistic as possible.  Eventually, the attackers will realize that they’ve been had, so the objective is to keep them in the honeypot as long as possible to gather as much information as possible about their methods and their identity.

One security researcher described one of his honeypots in a talk at the SANS 9th Annual ICS Security Summit.  Kyle Wilhoit of Trend Micro described a scenario in which he set up juicy but fake targets on five continents and then watched them be attacked.   Each was a model of a control system for a small municipality water pump.  Connected directly to the Internet and with insufficient protection, this water pump looked like easy pickings, and it was attacked nearly 100 times.  Again, the attackers were not attacking an actual water pump but were instead sending commands to a simulation of a water pump – the honeypot.

Disturbing Motives

Perhaps most disturbing to me is that most of the attacks that Wilhoit reported were attempted sabotage, not data exfiltration.  Nearly all of my recent research indicates that large-scale persistent attacks against control networks have been data exfiltration for competitive advantage.  In this case, however, data exfiltration attempts were a minority of all attacks.  Even some well-known attack teams supported by hostile nation-states attempted to disable the water pump, not simply exfiltrate its data.  For me, this requires a rethink:  Is all that data exfiltration really just for competitive advantage or are attack plans being prepared?  As ever, only the attackers know, but this one project suggests that there may be more attack planning than has been assumed.

You might think that attackers seeing a control device connected directly to the Internet would say, “Nah, this is too good to be true.”  And then seeing a control device directly connected to the Internet with little or no security – “It just has to be fake, right?”  Sadly, no.  Attackers are accustomed to discovering real systems like this all day long – directly connected to the world and with no protection.

My conclusion is mixed.  Honeypots are an effective tool for learning about our adversaries.  Yet, honeypots work because the unprotected systems that they mimic are commonplace in our industry.

]]>
http://www.navigantresearch.com/blog/honeypots-teach-us-about-attackers/feed 0
Advanced Energy Is $1.13 Trillion Market http://www.navigantresearch.com/blog/advanced-energy-is-1-13-trillion-market http://www.navigantresearch.com/blog/advanced-energy-is-1-13-trillion-market#comments Fri, 11 Apr 2014 14:35:19 +0000 http://www.navigantresearch.com/?p=64227 The publication of the Fifth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC), Climate Change 2014: Impacts, Adaptation, and Vulnerability, made headlines recently with a familiar message: The climate is warming, people are causing it, and we are ill prepared to deal with the direct and indirect effects of climate change. Indeed, it is [...]]]>

The publication of the Fifth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC), Climate Change 2014: Impacts, Adaptation, and Vulnerability, made headlines recently with a familiar message: The climate is warming, people are causing it, and we are ill prepared to deal with the direct and indirect effects of climate change.

Indeed, it is a grim outlook, but when looking at one indicator not covered in the IPCC report – revenue from deployment of smart energy technologies – there are signs that things are moving in the right direction to reduce emissions.

One group, the Advanced Energy Economy (AEE), is a national association of businesses and business leaders who seek to make the global energy system more secure, clean, and affordable.  The group takes a big tent approach to clean energy.  It is bankrolled by one of the leading advocates and funders for the United States taking a leadership position in deploying clean energy, Tom Steyer.  AEE has identified seven core segments that make up the advanced energy industry: transportation, electricity generation, fuel production, electricity delivery and management, fuel delivery, buildings, and industry.

For the past 2 years, AEE has commissioned Navigant Research to quantify the advanced energy industry market sizes for the United States and globally.  We have identified 41 categories and 80-plus subcategories that meet the AEE definition and put the detailed findings and key trends in the report, Advanced Energy Now 2014 Market Report.  Below are some key findings from the report that illustrate the breadth and depth of technologies that are capable of reducing emissions and U.S. activity in those markets.

Key Findings

  • The global advanced energy market reached an estimated $1.13 trillion in 2013.
  • In the United States, the advanced energy market was an estimated $168.9 billion in 2013 – 15% of the global advanced energy market, up from 11% in 2011.
  • Advanced transportation is booming: Navigant Research forecasts annual plug-in electric vehicle sales will reach approximately 467,000 vehicles in the United States and 80,000 in Canada by 2022 – slightly faster than hybrid electric vehicles sales grew in their first decade.
  • The United States accounted for an estimated 18% of the global solar PV market that approached $100 billion annually in 2013 and far surpassed 100 GW of cumulative installations in 2013.
  • LEDs are expected to be the leading lighting technology over the next decade, with LED lighting products (including lamps and luminaires) in commercial building markets forecast to grow from $2.7 billion in 2013 to more than $25 billion in 2021.
]]>
http://www.navigantresearch.com/blog/advanced-energy-is-1-13-trillion-market/feed 0
Innovation Is Booming in the Water Industry http://www.navigantresearch.com/blog/innovation-is-booming-in-the-water-industry http://www.navigantresearch.com/blog/innovation-is-booming-in-the-water-industry#comments Wed, 09 Apr 2014 19:15:41 +0000 http://www.navigantresearch.com/?p=64152 As part of the events to mark World Water Day, the United Nations (UN) has launched a new report highlighting the challenges of ensuring an adequate global water supply over the coming decade.  In particular, the World Water Development Report focuses on the growing interdependency of water and energy.  The report looks at the water [...]]]>

As part of the events to mark World Water Day, the United Nations (UN) has launched a new report highlighting the challenges of ensuring an adequate global water supply over the coming decade.  In particular, the World Water Development Report focuses on the growing interdependency of water and energy.  The report looks at the water industry’s energy requirements for production, distribution, and treatment, as well as at the growing demand for water resources from the energy industry.

We have written about the impact of the growing global demand for water before, but the World Water Development Report yet again highlights the challenges ahead.  According to the report, water demand will increase by 55% by 2050, with the biggest impact coming from the growing demand from manufacturing (400%), thermal electricity generation (140%), and domestic use (130%).  More than 40% of the global population is projected to be living in areas of severe water stress through 2050.

Countries, cities, and communities need to improve their ability to assess and plan for future water needs.  However, developing new water supplies, storage facilities, or treatment plants will remain a hugely expensive endeavor, and so the industry must look to technologies that can mitigate the need for capital investment by improving the efficiency of existing systems and maximizing the benefits of new investments.  For this reason, we are seeing a host of innovative technologies and solutions targeted at the water industry.  Entrepreneurs and developers from the IT, telecom, and smart grid sectors are now looking to water as the next industry where they can make a major impact on the way the business operates.  This opportunity is attracting a wide range of technology and service suppliers, including established water metering vendors, water network engineering companies, water service companies, infrastructure providers, IT software and service companies, and a variety of startups and innovators.

The recent World Water-Tech Investment Summit in London gave me a good opportunity to survey a range of companies.  Among a host of other innovators at the show were companies we looked at in our Smart Water Networks report, including TaKaDu, which has been pioneering the use of cloud-based analytics for leak detection.  Also present was i2O, which is providing water utilities with an intelligent pressure management solution that also uses cloud-based advanced analytics, but integrates them directly into the pressure management system.  Other companies new to me included Acoustic Sensing, a U.K. startup that has developed a new acoustic sensing solution to allow the rapid identification of structural defects and blockages in sewerage systems; Syrinix, another U.K. company that provides intelligent pipe monitoring systems for burst detection and pressure monitoring, among other applications; IOSight, an Israeli-based company providing advanced business intelligence and data management for the water industry; and Optiqua, which provides sensor networks for real-time water quality monitoring.

Keeping Afloat

While there is no shortage of innovation in the industry, it is still a challenge to find ways of investing in new technologies in a heavily regulated industry.  With no stimulus funding or mandated smart meter rollouts to boost the market, the industry needs to find other ways to finance innovation.  One option is the use of a software-as-a-service (SaaS) model to defer capital expenditures and reduce resource needs.  For example, both TaKaDu and i20 provide their software as a cloud-based service.  Innovative approaches to regulatory and investment programs will also be important.  In the United Kingdom, OFWAT is currently working with the country’s water utilities on the next regulatory pricing period, to run from 2015 to 2020.  The aim is to increase the ability of utilities to invest in water metering and other networks’ management technologies.

The smart water market is attracting a wide range of new players and presenting established players with the opportunity to expand their business into new areas.  Both sets of players face challenges in an industry that is hungry for change but also conservative in its operations and restricted in its financial options.  As stated in our Smart Water Networks report, while there are strong drivers for growth, the challenges of transforming a conservative industry faced with a physically and technically challenging deployment environment mean that the growth in this market will always be steady rather than explosive.  However, the direction of travel is clear.

]]>
http://www.navigantresearch.com/blog/innovation-is-booming-in-the-water-industry/feed 0
Distributed Energy’s Big Data Moment http://www.navigantresearch.com/blog/distributed-energys-big-data-moment http://www.navigantresearch.com/blog/distributed-energys-big-data-moment#comments Wed, 09 Apr 2014 15:22:10 +0000 http://www.navigantresearch.com/?p=64162 As my colleague Noah Goldstein explained in a recent blog, the arrival of big data presents a multitude of challenges and opportunities across the cleantech landscape.  Within the context of distributed energy resources (DER), among other things, big data is unlocking huge revenue opportunities around operations and maintenance (O&M) services. As illustrated by large multinational equipment [...]]]>

As my colleague Noah Goldstein explained in a recent blog, the arrival of big data presents a multitude of challenges and opportunities across the cleantech landscape.  Within the context of distributed energy resources (DER), among other things, big data is unlocking huge revenue opportunities around operations and maintenance (O&M) services.

As illustrated by large multinational equipment manufacturers like GE and Caterpillar, big data represents not only a potential key revenue source, but also an important brand differentiator within an increasingly crowded manufacturing marketplace.  Experience shows, however, that capitalizing on this opportunity requires much more than integrating sensors into otherwise dumb machinery on the factory floor.

The recent tragedy of Malaysia Airlines Flight 370 brought international focus to the concept of satellite pings whereby aircraft send maintenance alerts known as ACARS messages.  These types of alerts highlight the degree to which O&M communication systems are already in place in modern machinery.  But Malaysia Airlines reportedly did not subscribe to the level of service that would enable the transmission of key data to Boeing and Rolls Royce in this instance.  Although data may be produced via a complex network of onboard sensors, it is not always collected in the first place.

The collection and utilization of big data is not necessarily as simple as subscribing to a service, however.  Today, the sheer volume of data produced by industrial machinery is among the main challenges facing manufacturers of DER equipment.

A Different Animal

Bill Ruh, vice president and corporate officer of GE Global Software Center, which helped lead GE into the big data age in 2013, describes the Internet of sensors as a very different animal than the Internet used by humans.  While “the Internet is optimized for transactions,” he explains, “in machine-to-machine communications there is a greater need for real time and much larger datasets.”  The amount of data generated by sensor networks on heavy equipment is astounding.  A day’s worth of real-time feeds on Twitter amounts to 80 GB.  According to Ruh, “One sensor on a blade of a gas turbine engine generates 520 GB per day, and you have 20 of them.”

Despite volume-related challenges, this opportunity proved too lucrative for GE to pass up.  Estimating that industrial data will grow at 2 times the rate of any other big data segment within the next 10 years, the company launched a cloud-based data analytics platform in 2013 to benefit major global industries, including energy production and transmission.

Similarly, Caterpillar is one of the latest industrial equipment manufacturers to recognize the value of streaming a torrent of real-time information about the health of products in order to generate new revenue.  Already integrating diagnostic technologies into its nearly 3.5 million pieces of equipment in the field, the company launched an initiative across its extensive dealer network aimed at leveraging big data to drive additional sales and service opportunities.  Currently, the company’s aftermarket business accounts for 25% of its total annual revenue.  As Caterpillar and other companies manufacturing energy technologies have realized, a healthy pipeline of aftermarket sales and service opportunities is of vital importance to market competitiveness in an increasingly competitive manufacturing landscape.

With distributed power capacity expected to increase by 142 GW according to a white paper published by GE in February, the addressable market for aftermarket DER data is rapidly expanding.  Despite these opportunities, data analytics still represents a mostly untapped opportunity for manufacturers of emerging DER technologies.  Allowing manufacturers and installers of everything from solar panels to biogas-fueled generator sets (gensets) to closely monitor hardware performance, better utilization of data has the potential to not only drive aftermarket service offerings, but also accelerate return on investment (ROI) through better optimization and greater efficiency.  And this is a highly valuable differentiator for a class of technologies still scrambling for broad grid parity.

]]>
http://www.navigantresearch.com/blog/distributed-energys-big-data-moment/feed 0