Navigant Research Blog

In Japan, Smart Meters Accelerate

— May 1, 2014

The deployment of smart meters in Japan is moving into a higher gear.  The country’s leading 10 utilities have announced plans to finish installing residential smart meters sooner than originally scheduled.  The speedup was prompted by a perceived need on the part of the incumbent utility monopolies to better prepare for expected competition once the retail sale of electricity is deregulated in 2016.

Tokyo Electric Power Company (TEPCO) is expected to complete its deployment first under the revised schedule.  The company is aiming to have the deployment of about 27 million smart meters finished in its fiscal year 2020.  TEPCO is expected to soon announce which five manufacturers have been chosen to the supply the utility with new meters for its first surge of installations set to begin this fall.

All In by ‘24

Meanwhile, Kansai Electric Power Company (KEPCO) and Chubu Electric Power will aim to have their smart meter projects finished in fiscal year 2022.  KEPCO, which has a service area that includes Kobe, Kyoto, and Osaka, has already deployed about 2 million smart meters.  Six of the remaining utilities intend to complete their smart metering projects in fiscal 2023, with the seventh, Okinawa Electric Power Company, moving up its expected completion date to 2024 from the original year of 2032.  By 2024, virtually all of Japan’s roughly 80 million residential customers are expected to have a smart meter installed in their homes.

The growing smart metering activity in Japan will have a positive impact on at least one U.S. company, Itron.  Itron’s smart grid software package, called OpenWay Collection Engine, was recently chosen by Mitsubishi Electric Corporation for deployment at Chubu Electric Power, Japan’s third-largest electric utility.  The OpenWay platform will be used to help collect and relay the high volume of data expected from field routers and the estimated 10 million smart meters Chubu Electric Power intends to install through 2022.  This Japanese win for Itron, which has struggled in recent quarters, as smart metering projects have wound down in North America, is its second major victory this year.  In March, FirstEnergy announced it had chosen Itron to provide 2 million smart meters and the OpenWay platform for deployment among FirstEnergy’s four Pennsylvania-based utilities.

As was seen during the boom in smart meter deployments in North America (and noted in Navigant Research’s recent report, Smart Meters), a similar situation is about to begin in Japan – with multiple projects commencing at about the same time.  Many winners and losers are about to be chosen among vendors of smart meters and grid hardware and software in Japan.  The stakes are high, and many in the utility world will be watching closely for new lessons that are likely to emerge from the Japanese effort.


Driblet Wants to Become the Nest of Water Meters

— December 6, 2013

An early stage startup in Texas wants to change how people monitor their water use – and become the Nest of water meter sensors.  The startup, called Driblet, offers a seemingly simple device, also called Driblet, that attaches to a shower faucet or an outside hose bib and measures consumption.  What makes it unique is its ability to send usage data via Wi-Fi to a cloud service, where the user can monitor water consumption from a computer or Internet-connected mobile device.

The basic concept – to isolate water usage at a faucet level – is not new.  Several vendors (e.g., GPI, DLJ Meter, Hydrologic) offer water flow measuring devices for consumers, but the Driblet’s Internet-connected functionality sets it apart.  The device is the brainchild of Rodolfo Ruiz, an electrical engineer who first created a smart water meter 15 years ago in Monterey, Mexico.  His original device was designed for one of Mexico’s largest water meter distributors, but it never came to market because of federal regulations and a lengthy legal process.

Turn Off the Shower

But Ruiz did not give up.  The father of two children, he noticed his daughter taking long showers that would lead to arguments.  He wanted some way to let her know her water consumption was out of line compared with the rest of the household.  Today, with the help of his improved device, the fights over water use in his home have subsided.  Later, Ruiz entered Driblet in a hackathon event in Mexico and won a prize that got his company off the ground.  Now Driblet is part of Dragon Innovation, a crowd-funding incubator for hardware startups.

The target market is residential homeowners, but Ruiz thinks landlords, non-government organizations working in remote locations, and governments will also be interested.  The device costs $49 for early adopters.  Ruiz says the potential savings on water consumption can be as high as 30%, though the company needs to push Driblet into more homes to obtain a true gauge on how much people can save on average.

There’s no telling if Driblet will make it to widespread production and distribution like the Nest device.  It faces a big marketing challenge, but Ruiz has come up with a solution that others might find worthwhile.  The company is not aiming to displace utility-grade water meters, of course, but this device could provide the water-use granularity that many people would like and could afford.  Stakeholders in the water industry should take note, at least, given that simple ideas sometimes have a way of making an impact.


Smart Grid Vendors Embrace Life in the Big City

— December 2, 2013

Smart meter manufacturer Itron and smart grid networking provider Silver Spring Networks (SSN) have both recently embraced new smart city initiatives, becoming the latest vendors to focus attention on a market that is expected to grow to $20.2 billion by 2020, according to Navigant Research’s Smart Cities report.

Itron has joined Microsoft’s CityNext effort, which aims to encourage cities around the world to chart a new future where technology combines with creative ideas to do “new with less.”  The lofty ambitions of CityNext include bringing municipal governments, citizens, and businesses together to build more efficient and sustainable urban areas and do so at lower costs.  Itron’s focus will be on the intersection of energy and water – the nexus, as it’s known – where the company’s technology can be brought to bear to help cities better manage these two vital resources.

City of Light

Silver Spring announced a new network-as-a-service (NaaS) product as part of its smart city solution.  The new service offering aims to help cities avoid upfront capital and deployment costs, and it can become a foundation for adding new smart city applications over time.  The company says its smart city solution helps cities meet some of the key challenges they face in four areas: environmental sustainability, transportation management, health and safety, and economic growth.  The company notes that both Paris, France, and Copenhagen, Denmark, have chosen SSN for projects.  For Paris, the company is providing a new street lighting and traffic control program as the city attempts to cut public lighting consumption by 30% during the next 10 years.  Copenhagen chose the company to deploy a citywide network for connecting 20,000 street lights, which can be leveraged for future smart city services.

Both Itron and SSN join a long list of other smart city technology vendors targeting this market, including Cisco, IBM, Schneider Electric, and Siemens, among others.  (See the Navigant Research Leaderboard Report: Smart City Suppliers for our ranking of this group of companies).

With these initiatives, Itron and SSN are looking to broaden their reach beyond the U.S. market for smart metering and networking, which has peaked for now with the winding down of federal stimulus money.  Different opportunities lie elsewhere, and often the need is for solutions that solve urban problems not often found in the United States.  For instance, Itron is supplying new advanced water meters to areas of New Delhi, India,  in a project aimed at providing a continuous water supply where, before, water was only available for several hours each day.  In China, Itron has supplied smart water, heat, and gas meters, along with networking gear, for the Sino-Singapore Tianjin Eco-City – a city built with efficiency and sustainability squarely in mind.  We can expect to see more of these types of city-centric and integrated solutions in coming years.


Smoke Alarms Go High-Tech

— October 23, 2013

From the start, Nest Labs was never going to stop at thermostats.  With the recent introduction of the Nest Protect smoke and carbon monoxide (CO) alarm, the market for another lowly home device is about to get disrupted.

The Nest Protect will retail for $129 and is available now on pre-order, with deliveries expected in early November.  What you get for $129 is a connected device with several high-tech features:

  • Six built-in sensors: Smoke, CO, heat, light, activity, and ultrasonic
  • Two wireless radios: Wi-Fi and a ZigBee-type connection (802.15.4 at 2.4 GHz)
  • A human voice (English or Spanish) in addition to the alarm
  • The ability to use hand gestures to silence an alarm when an emergency is not apparent (e.g., smoke from a candle)
  • A passive light that glows brighter when someone passes by in the middle of the night (good for hallways and can be set not to come on in bedrooms)

By comparison, the average price for a smoke alarm is about $25, including a few models with CO sensing.  But the Protect has more sensing capabilities and enables a greater level of connectivity than typical alarms.  For instance, a Nest Protect alarm in the kitchen might detect burning food on the stove and notify a Protect device in a back bedroom.  Once the danger passes, the Protect system notifies all the connected devices that everything is fine.  And if CO is detected and sets off a Nest Protect alarm, then a connected Nest thermostat will automatically shut off gas to a furnace, which can be a source of a dangerous CO leak.

Less Annoying

The Nest Protect is the brainchild of Tony Fadell, cofounder and CEO of Nest, and his fellow engineers.  As he told TechCrunch, Fadell and his team members all had stories about how irritating traditional smoke detectors can be.  He recalled staring at “this strange product on my ceiling that just annoyed me … a product that is supposed to keep you safe, except that it is annoying.”  Out of this collective annoyance, Fadell and his engineers came up with a device they see as a much better alarm – one that people can embrace in the same way many Nest thermostat owners favor that device.

People may scoff at Nest for producing high-end gadgets.  Not me.  Yes, Fadell and team set a high and more expensive bar, but what innovative products don’t do that at the beginning?  The first automobiles were well beyond most people’s budgets.  The first cell phones cost nearly $4,000.  The first laser printers sold for around $3,500.  Sure, Nest makes expensive gadgets, but it is also innovating and pushing product categories in new directions.  In time, prices are likely to fall as the best ideas become more common and economies of scale in manufacturing take hold.  Price matters, of course, but innovation that improves our lives and reduces annoyance (I hate replacing good batteries in my smoke alarms every 6 months when we reset our clocks) is a benefit.  I’ll wager the Protect alarm will trigger a similar response from early adopters that the Nest Learning Thermostat has generated.  Competitors will respond, too, and that will make for a more vigorous market.

I also suspect Nest engineers have at least a few more home devices and systems they want to improve.  One can imagine upgraded security systems, smarter electrical outlets, advanced faucets (the ones in hotels and airports have sensors already), and even toilets.  If Nest continues to push the boundaries, can a comprehensive Nest Home be far behind?


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