Navigant Research Blog

Recapping the PLMA Spring Conference

— May 2, 2016

Home Thermostat DialThe Peak Load Management Alliance’s Spring Conference was recently held in San Francisco from April 18 to 20. It felt great to be back in the Bay Area after having worked out there on the first generation of demand response (DR) programs to help avert rolling blackouts following the Enron mess. That saga is well in the past now, but DR continues to evolve and adapt to the changing market conditions due to technology, policy, and economic forces. Leading practitioners and visionaries in the industry were at the conference, trading opinions on several themes that coalesced as the event progressed.

The concept of integrated demand-side management was discussed from a couple of different angles. First off, there’s the combination of energy efficiency and DR program offerings based on enabling technologies like smart thermostats and targeting specific geographic territories. Utilities like NV Energy and Commonwealth Edison reviewed their thermostat experiences, while Consolidated Edison, Central Hudson, Pacific Gas & Electric, and National Grid explained how to drill down to the distribution level to address location-specific constraints. Successful implementation will require breaking through the traditional utility and regulatory silos that separate energy efficiency and DR operations and budgets.

Second, there was the concept of integrating DR with other distributed energy resources like energy storage and solar PV as a full-service offering for customers that addresses their concerns outside of technology silos. Hawaii and California were highlighted as areas that are dealing with this market shift in real time, leading to new operational system needs and program design structures.

Some of the early utility and vendor adopters of the BYOT, or Bring Your Own Thermostat, design concept—including Xcel Energy, SCE, Great River Energy, Nest, and EnergyHub—provided their best practices and lessons learned, while the audience pondered how quickly this model could go mainstream. There was a lot of discussion about the technical and operational barriers to bringing BYOT to scale and maximizing customer engagement without turning them off through excessive hoops to jump through. It was mentioned that the seemingly simple step of requiring a customer to provide a utility account number in order to sign up for a program dramatically reduces the likelihood of enrollment.

The next opportunity for DR thought leaders to convene will be the National Town Meeting on DR in Washington, D.C., running from July 11 to 13. It might not be as exciting as it was to be in D.C. last fall for the Supreme Court hearing on DR, but there should be plenty to talk about as the presidential election heats up.

 

Key Automotive Trends Are Driving Acquisitions

— May 2, 2016

DashboardAs a new Navigant Research white paper on transportation is published, it is interesting to note that the trends identified are already influencing merger and acquisition (M&A) decisions in the automotive world today. Transportation Outlook: 2025 to 2050 takes a long-term view of how the automotive vehicle market may change over the next 35 years. As with all long-term forecasts, there are many unknowns that could influence the end results, but it is a useful exercise to think about where current trends could lead.

The study identifies four major trends in automotive technology today and extrapolates into the future to speculate about how the global marketplace might change. The four technologies are:

  • Connectivity
  • Autonomous driving
  • Car and ridesharing
  • Electric drive

It is interesting to observe some recent M&A activity that acknowledges the significance of these technology developments for the future. Although they have evolved independently, the key to long-term success is integration.

Recent M&A Announcements

While one aspect of acquisitions is always economic and looking for efficiency improvements from shared overheads and broadening of product offerings, some are more about strategic factors that consider long-term goals.

NXP and Freescale: This merger was announced in March 2015 and completed by December. NXP wanted to increase the proportion of its automotive business and was attracted by Freescale’s growing business supplying OEMs with processors for powertrain and safety systems, particularly advanced driver assistance systems (ADAS).

Intel and Altera: Completed in December 2015, Altera expanded the Intel product line into field-programmable gate array technology, which makes it easier to customize processors and upgrade them while in service. While generally useful for the Internet of Things, one possible application may be for secure chips to control safety and autonomous driving systems. Updating software remotely is a topic covered in more detail in a recent blog from my colleague Sam Abuelsamid.

Intel and Yogitech: Acquired in April 2016, Yogitech specializes in fault-tolerant integrated circuits. With concerns about hacking and interference growing as more cars become connected by wireless communications, safety is an important factor for automotive OEMs.

General Motors (GM), Lyft, and Sidecar: In January 2016, GM acquired the employees and technology of Sidecar, a ridesharing service that shut down in December 2015. At around the same time, GM made a major investment in Lyft, the largest U.S. competitor to Uber. The automaker does not want to get left behind in the on-demand mobility stakes. For more detail, see another blog from my colleague Sam Abuelsamid.

General Motors and Cruise Automation: In March 2016, GM announced it was buying Cruise Automation (founded in 2013) to accelerate development of autonomous driving functionality for its vehicles.

Harman and TowerSec: Once known mainly for audio and infotainment systems, Harman is expanding its product line into connected and autonomous vehicles. TowerSec provides important extra safety via cyber security capability.

ZF Friedrichshafen and TRW: When ZF Friedrichshafen AG acquired TRW Automotive Holdings Corp. in May 2015, it added key expertise in radar and camera sensors to its offerings, among other things. TRW is now a new division within ZF called Active & Passive Safety Technology. The Tier One supplier can now offer complete ADAS capability from sensors to activation of steering and brakes.

Also in 2015, Audi, BMW, and Daimler got together to acquire HERE from Nokia. This was covered in a Navigant Research blog at the time by Lisa Jerram.

This is a quick overview of recent activity in the automotive world; there will surely be more to look forward to in the near future.

 

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