Navigant Research Blog

The Role of Analytics in Enabling Smarter Homes

— July 13, 2017

The Internet of Things (IoT) has begun to move beyond the hype and is slowly but surely delivering on its promises with more Internet-connected devices than ever before. It reached an estimated penetration rate of 5.3% of homes in North America in 2016. These IoT devices are generating growing volumes of valuable data, which has led to the need for analytics solutions.

Means for Actionable Insights

Analytics solutions are software platforms embedded with algorithms that can identify patterns in data to provide actionable insights. In the residential sector, analytics software can crunch data transmitted from devices within the home. It can also be used with publicly available and third-party data sources on weather, demographics, and home infrastructure to enable a variety of applications, including customer engagement, energy management, monitoring and control, and automation.

Currently, analytics are mostly focused on customer engagement. In the energy industry, utilities are analyzing smart meter data to provide customers with more information about their energy consumption and specific ways in which they can reduce use and save on energy bills. However, customer engagement is only the beginning of what can be done with residential analytics solutions. Stakeholders in this space have only begun to scratch the surface of the available opportunity data has to offer.

Increasing Whole Home Efficiency

Navigant Research expects analytics to foster whole home integration of various connected devices by increasing awareness across multiple facets of the home, from thermostats to door locks to refrigerators to solar panels. Having insight from various devices across the entire home can enable machine learning and artificial intelligence technologies to create comprehensive ecosystems of connected home technologies. Ecosystems like these can act intuitively and think independently of the homeowner, creating smarter and more efficient homes.

This concept of more comprehensive and integrated ecosystems is the key to the success of the smart home, as smarter, more connected, and intuitive homes are expected to play a vital role in the Energy Cloud. Smart homes are expected to act as dynamic grid assets that sell energy back to the grid through distributed energy resources, shed and shift load demand through system optimization, and generally support a more reliable grid. All of this can be done by transitioning the market from a focus on individual purchased connected devices to devices supported by more intelligent technologies, starting with analytics solutions. To learn more about the role analytics play in the smart home, see Navigant Research’s report on Smart Home Data Analytics.

 

New Analytics Solutions Give Consumers More Energy Choice

— July 13, 2017

Residential consumers are becoming increasingly aware of their energy consumption and are interested in how they can reduce their use, save money on energy bills, and become more environmentally conscious. More and more customers are receiving home energy reports, which detail energy consumed and compare usage to that of neighbors. Opower (Oracle) achieved more than 11 TWh of energy reduction across 100 utility partners with these types of reports. Consumers are also logging into mobile apps that disaggregate devices to help them make smarter choices about where to target energy saving efforts.

Despite increasing efforts and awareness about energy, many consumers still do not know where their energy actually comes from. Most people may have a vague sense of their country’s energy mix and imports, such as the US energy mix depicted in the figure below, or that the UK imports 60% of its electricity-generating fuel. However, when a consumer flips a light switch, turns on their TV, or adjusts their thermostat, the energy that powers those actions is coming from whatever power plant is turned on to meet that incremental demand. This means the energy your light bulb is using could be drawing power from a coal plant, a natural gas facility, or a solar panel.

US Energy Mix: 2016

(Source: US Energy Information Administration)

New Technology Helps Track Generation Sources

In the past, there hasn’t been a method for determining the generation source that is meeting demand in real time. However, a non-profit called WattTime has developed a data analytics software that solves this problem. The software, which was the brainchild of a hackathon event in 2013, detects where the electricity powering the grid is coming from and the actual emissions impacts of people and companies using electricity. Not only does it detect this information, but it can also automatically power devices when energy sources are the cleanest. It can be installed in any Internet-connected device, making it flexible and easy to implement. This tool empowers customers to have a choice in the type of energy they are using and how much they are emitting when they consume electricity. WattTime’s software is gaining traction, having partnered with companies like Microsoft, Energate, and most recently, the Rocky Mountain Institute (RMI). WattTime has joined RMI as a subsidiary organization to foster the transition to a cleaner, more decentralized grid.

Looking Forward to a Cleaner Energy Future

Data analytics solutions like these are empowering consumers to make smarter energy choices, facilitating the transition to a cleaner, more decentralized and optimized grid, and solving challenges associated with reducing carbon emissions. Currently, emissions are calculated based on average factors, not based on the actual emissions that are generated depending on the source providing the next kilowatt-hour of power. As countries and organizations around the world move forward with reducing greenhouse gases, real, data-based information on emissions can help consumers understand how their actions directly affect greenhouse gas emissions and contribute to the overall goal of a cleaner, greener world.

 

Are Intelligent Buildings the Automated Vehicles of Real Estate?

— July 11, 2017

An interesting point-counterpoint discussion erupted during a recent panel discussion at the IBcon conference. The topic was intelligent buildings, and I was moderator. One of the vendor panelists drew the analogy between intelligent buildings and automated vehicles, which became quick-start fodder for a counter idea that increased intelligence may drive buildings, but where? This banter stuck with me. I see two reasons why we need to keep focused on the drivers of commercial buildings to realize the full benefits of the intelligent technology opportunity.

#1: Investment in Technology Must Direct Action

Forget about connecting everything—that is not what this is about. Instead, understand the business pain points, leverage what is already there and invest wisely. As the Internet of Things (IoT) retains its buzz, there is a tendency to focus on how to connect everything. But the biggest bang for the buck won’t come from connected toasters and refrigerators in office kitchens. It is important to stay focused on the customer’s perspective—what are they trying to improve in their facility operations, and how can intelligent building solutions drive cost-effective change? In my ongoing research and throughout conversations at events such as IBcon, I have heard the importance of delivering actionable information, not just more data. Solutions that deliver concise, actionable insight will be the winners in the race for leadership in the intelligent buildings market.

#2: Technical Advisors Should Be Program Partners

The intelligent building requires a new information technology skill set for operators defined by their mechanical expertise. The intelligent buildings market has developed around the idea of IT/IoT convergence, but there are still silos in most organizations. Opportunities exist for technical advisors to form partnerships to help managers implement programs that transform a commercial facility, campus, or portfolio into more intelligent buildings.

Platform Builds Partnerships

At IBcon, the conference floor was chock full of technology partners demonstrating intelligent buildings offerings. The IoT platform approach to optimizing commercial buildings requires partnerships in today’s market. There is no single vendor that can provide an end-to-end solution with the technical, service, and domain expertise necessary to support commercial buildings customers. Ideal partners bring together cybersecurity, integration, energy management, and facilities maintenance expertise alongside customer services, which can support the customer journey. Navigant Research found that, as commercial building owners and operators begin investing in IoT solutions, they look for partners that can scale solutions over time, offer longevity and pragmatism to utilize existing infrastructure and technology, and direct strategic ongoing investments.

The future is bright for IoT in the commercial buildings market because the infrastructure of data and connectivity is delivering the kind of insights customers demand to redefine the experiences in their facilities. Navigant Research suggests that, as the market matures, those vendors offering cost-effective solutions that are secure, scalable, and deliver actionable insight will win the leadership position in this rapidly evolving marketplace. For more on Navigant Research’s outlook on the market, read its recently published report, IoT for Intelligent Buildings.

 

Consumer Choice in the UK Energy Market: The Year of the Tracker Tariff

— July 11, 2017

A year ago, I wrote a two-part blog post (part one and part two) about the surge in consumer choices in the United Kingdom’s energy market. A lot has happened since those articles were written—the second of which was published on the same day as the Brexit referendum results.

Energy price hikes made headlines over the 2016/2017 winter, as five of the Big Six energy suppliers (EDF, E.ON, SSE, British Gas, Scottish Power, and Npower) raised prices by 8%-15%. British Gas was the only exception, promising to hold prices until at least August 2017. These increases put a political spotlight on energy prices during the country’s general election in June—during which even the Conservative Party (generally associated with free market policies) proposed energy price caps.

The Year of the Tracker Tariff

Although the political debate has not devolved into any specific energy policies yet, small energy suppliers and new entrants (such as Octopus Energy, Pure Planet, and ENGIE) have used the price hikes as an opportunity to launch a new class of energy tariff: the tracker.

Prior to May 2017 (when the first tracker was launched), consumers in the United Kingdom could opt for either a standard variable rate (SVR) or a fixed price rate:

  • SVR: In a SVR tariff, the unit price of electricity can go up or down at any time. The supplier must notify the consumer of price rises (and of any other changes to the consumer’s disadvantage) but the price charged is completely at the supplier’s discretion. This is the most basic offering from energy suppliers and it is usually their most expensive. Consumers usually end up on this tariff after a fixed contract expires.
  • Fixed price rate: In a fixed price tariff, the unit price of electricity is agreed upon at the beginning of the contract and remains fixed for a certain period (often 12 months in the United Kingdom). This fixed price is usually below the SVR.

Energy suppliers have been criticized by Ofgem (the United Kingdom energy regulator) for widening the difference between their best rates and their SVRs. So, in a bid to win consumer’s trust through improved transparency, a few energy suppliers have launched tracker tariffs.

Retail Price Comparison by Company and Tariff Type: Domestic (Great Britain)

(Source: Ofgem)

Tracker tariffs resemble SVR tariffs in that the price the consumer pays for electricity changes with time; unlike SVRs, the price is not discretionary. Instead, it is linked to the average wholesale electricity price on the day of consumption.

The precise structure of the tracker varies from supplier to supplier. For example, Octopus Energy charges a fixed standing charge per day and then the wholesale price plus transmission and distribution costs, other regulated costs, taxes, and a fixed margin per kilowatt-hour consumed. Another supplier, Pure Planet, charges a fixed membership fee that includes all non-energy related costs and then wholesale prices for each kilowatt-hour consumed (100% renewable, in this case). ENGIE, the last of the companies offering tracker rates, has not yet disclosed how its tariff will be structured.

It is too early to judge whether consumers will embrace trackers or if they will prefer the certainty of fixed price rates. Perhaps the majority of consumers simply do not care enough about energy contracts and will continue to pay SVRs. Regardless, trackers are a step toward a residential energy as a service product. This is especially true of Pure Planet’s offering: by incorporating its margin into the fixed component of the bill, it is in a position to offer add-on services that increase comfort—or reduce energy consumption—without sacrificing profit margin.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Digital Utility Strategies, Electric Vehicles, Energy Technologies, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Transportation Efficiencies, Utility Transformations

By Author


{"userID":"","pageName":"2017 July","path":"\/2017\/07?page=3","date":"12\/15\/2017"}