Navigant Research Blog

Technology Issues in Smart Devices Can Cause Major Problems for Consumers

— January 29, 2016

close up of man hands touching tablet pc screenOver the past few years, there has been an explosion of devices that have the potential to revolutionize our daily lives. Smart devices promise to help us piece together a smart home, manage our energy consumption, and track our health and fitness at the push of a button. My 82 year-old grandmother has an iPad Air, which she uses every day to play games that keep her mind sharp, browse movies online that she can send to her entertainment console, and track her vitamin and medication intake. She once casually commented, “I don’t know what I would do without my iPad now.”

While embracing smart devices can lead to a bright future of connectivity and convenience, the technology may not be developed enough for us to so readily welcome them into our homes. Lately, there have been several cases showing that these so-called smart devices sometimes have serious flaws.

Out in the Cold

For example, the Nest Learning Thermostat—a smart thermostat that can be monitored and adjusted via a smartphone app—recently experienced a software glitch that left many of its customers in the cold. This may seem like a somewhat trivial issue—unless you are elderly, have an infant, or fear your pipes may burst. Nest reported that the issue had been fixed for 99.5% of customers, yet the fix involves a complicated nine-step manual restart (to Nest’s credit, it does offer to send an electrician to your home for assistance), and 0.5% of customers still did not have a solution.

Though Nest is arguably one of the best smart thermostats on the market, its technology issues don’t stop there. In January 2016, it was reported that Nest Learning Thermostats were leaking ZIP codes over Wi-Fi, meaning that any person walking or driving by with the right equipment could intercept that information. While leaked ZIP codes are probably not the most serious security concern, it does lead back to one of the main issues around smart devices today: are these devices secure, and can consumers trust them?

Nest is not the only company experiencing technology issues. Researchers who discovered the Nest ZIP code leaks also found the Sharx security camera and the PixStar photo frame were sending unencrypted data that could potentially be intercepted. The Honeywell Lyric, a rival smart thermostat to the Nest product, was reviewed as having glitches in its flagship geofencing feature. In April 2015, Nick Bilton—the New York Times writer who covered the Nest glitch—also reported on the security flaws he had experienced with the wireless fob for his Prius. Finally, the Fitbit, a fitness/health-focused wearable, was recently hit with a class-action lawsuit over its supposedly inaccurate heart rate monitoring.

A Growing Market

Pointing out these technology issues is not meant to scare consumers away from buying a smart thermostat, a keyless car, wearables, or any other popular smart device. These devices will inevitably become a part of our lives. Navigant Research estimates that the global market for communicating and smart thermostats (and their respective software and services) alone will reach $2.3 billion by 2023. The point is that it is our responsibility as consumers to not only understand and be aware of the risks associated with connected smart devices, but also to demand that these devices be safe and secure if we are going to embrace them.

 

Reading for a Changing Utility Landscape

— January 6, 2016

If you have been on the Internet recently, you will have noticed that the end of 2015 brings with it endless online posts regarding some of the year’s bests, worsts, highlights, and lowlights. I’m following suit by listing a handful of my favorite semi-work-related books. Throughout the last year, many thought leaders introduced creative approaches that apply to current utility business challenges. These approaches include, but are not limited to, organic growth, disruptive technologies, and fraternal twins, and global warming and climate change. Here are my favorites from 2015:

  1. How to Fly a Horse: The Secret History of Creation, Invention, and Discovery, by Kevin Ashton.
    Now that the Internet of Things (IoT) has entered the energy and utilities industry in a big way, it is time for people in this industry to read something by the man who coined that term, even though the book itself is not specifically focused on IoT. Debunking the idea that greatness is the result of single moments of revelation, Ashton argues for the merits in repeated experimentation, failure, and gradual development. Utilities feeling pressured by an all-or-nothing approach to developing an integrated and smart organization can pivot their focus a bit more toward how they can start to get their hands dirty, focusing on small achievements to support the foundation of much larger change.
  2. Losing the Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of Blackberry, by Jacquie McNish and Sean Silcoff.
    While I did not love the heavy historical narrative in this book, it did really hone in on the concept that one should never underestimate their competition (in BlackBerry’s case, the iPhone), and that competition can come from anywhere. Since the power utility industry has traditionally been protected by a regulated monopoly model, lessons in dealing with competition are likely less ingrained than in other deregulated markets. But as the regulatory environment changes, young companies in solar, storage, IoT, energy efficiency, and demand management have encroached on utility consumers like never before, and there are no signs that their momentum will slow. The utility-customer relationship is becoming more important than ever, right when it stands the most threat.
  3. Superforecasting: The Art and Science of Prediction, By Philip E. Tetlock and Dan Gardner
    Based on a 4-year study of random individuals tasked to predict outcomes based on common information, the authors of this book found that the best forecasters followed a common methodology based on data collection and objectivity. This seems like an obvious outcome, but the authors also noted that it is very rarely applied to business, economic, and political forecasting. Something for all of us to ponder.

These are just three books that felt pertinent to me this year given the changes occurring in the United States and globally, where environmental, political, and technological forces are shaping organizational change at an unprecedented rate. In a time of unruly transition, one thing that cannot hurt executives is to start reading up on the topics that have helped leaders in other evolving industries—and look for ways to apply lessons to their new challenges.

 

More Wastewater, Less Waste

— December 14, 2015

In these dry times, many cities are forced to turn to new sources of supply water to keep the pipes flowing. Reclaimed or recycled wastewater is becoming an increasingly popular option. Orange County in drought-stricken California has utilized a toilet-to-tap system since 2008, and in Texas, cities such as Wichita Falls are using recycled water for drinking. With a common aversion to drinking what once occupied a sewer, public opinion of reclaimed water in the taps is not high. Many towns have now taken to using so-called purple pipes, which mark reclaimed water and transport it only to non-potable uses, such as irrigation or flushing toilets. However, increasing acceptance of these systems has spurred the use of reclaimed water in a myriad of previously untapped applications.

The onset of winter is once again drawing the collective outdoor eye toward the mountains. Ski resorts, in an effort to open earlier in the season or just maintain better skiing conditions, frequently make their own snow. The popular Vail Resorts in Colorado, a state known as a winter sports haven, all make snow. However, some ski resorts are now doing so in an eco-friendly fashion.

Who Has the Green Snow?

Arizona Snowbowl is the first ski resort in the United States to use water reclamation technology for making snow. Located just outside of Flagstaff, the company started using this technology in 2013, but had some pushback from nearby residents and environmental groups with concerns of pharmaceuticals in the water. There are outspoken forums such as Protect the Peaks that can’t seem to stomach water reclamation at a ski resort. The ‘ick’ factor is a major barrier to widespread adoption, according to resort management. The water itself is treated to a very high standard; pathogen removal is key in reclamation systems.

The city of Flagstaff itself is utilizing recycled water for lawns, gardens, and golf courses. The reclaimed water replaces nearly 1.8 million gallons a day of freshwater. This system combines greywater (from sinks, tubs, and laundry machines) with blackwater (from toilets), and this combined stream goes to the Rio De Flag Wastewater Reclamation Plant. The city has utilized this system for 25 years.

Despite the pushback on using reclaimed water in ski resorts, Snowbowl is still the most popular resort in Arizona. Given the increasing adoption of water reclamation for municipal use, it could become a major trend at ski resorts that already make snow.

 

Solar in the Sahara

— December 7, 2015

Set to become the largest concentrated solar power (CSP) plant in the world, Morocco commissioned the first phase of its Noor-Ouarzazate project in November 2015. This 160 MW installation is just the first of four projects that will constitute the larger 580 MW plant. Located on the edges of the Sahara Desert in Ouarzazate, this project aims to ultimately provide power to up to one million people. Large-scale solar projects such as this can provide an array of benefits to nations across the Middle East & Africa. Along with providing reliable electricity access to developing countries, these types of clean technology projects may help mitigate some of the tension and conflict that persists throughout the region.

Rather than utilizing traditional PV technology, the first three projects will use CSP through parabolic mirrors and a trough system to track the sun across the sky during the day. CSP also comes with the benefit of thermal storage, allowing for the prospect of 24/7 solar energy. This will be supported further by the second phase of the project, Noor 2 (200 MW) and Noor 3 (150 MW), set to come online in 2017. The third phase will consist of a PV power station. This complex will be largest CSP plant in the world upon completion, marking a significant milestone as countries in the region begin to adopt solar into their energy portfolios.

Morocco is taking advantage of any opportunities where the Sahara is concerned. The world’s deserts receive enough solar energy in 6 hours to meet the power demands of humanity for an entire year. How to harness and distribute this energy in a cost-effective manner is a significant challenge. Morocco has been able to pursue this project through a mix of political will and falling solar costs. The Moroccan government is choosing to view climate change as an opportunity and ultimately hopes to use the Noor complex as a means to export electricity across the Middle East and Europe. This path toward energy independence is critical in a region where climate security is expected to pose a major problem in the future. Should this project prove successful, it can provide a template for surrounding nations as they begin their forays into solar. According to the University of Oxford Middle East energy expert Justin Dargin, large-scale integration of renewable energy could significantly reduce the budgetary outlays of countries in the Middle East & Africa, allowing increased funding for social services, infrastructure, and more. This reallocation of funds could be used to address some of the socioeconomic demands highlighted during the Arab Spring.

Morocco has set an ambitious target of generating 42% of its electricity using clean energy sources by 2020. Whether fellow countries in the region will follow suit with similar environmental initiatives is yet to be seen, but the Noor complex is a significant step in advancing large-scale solar integration across the region.

 

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