Navigant Research Blog

Innovators Wanted for DER Solutions: Part 2

— September 21, 2017

Coauthored by Brett Feldman

Earlier this year, Navigant Research blogged about innovations required to overcome challenges to widespread distributed energy resources (DER) adoption and integration. This blog highlights examples of companies and products looking to address those gaps from different perspectives, with varying levels of success so far.

Hardware

 Tesla’s recent innovation in solar PV is the Solar Roof system, a glass solar tile product for homes that has a warranty of the lifetime of the house. The Solar Roof can also integrate with the Tesla Powerwall home battery. The out-of-pocket cost for a typical home in Maryland is estimated at $52,000 (pre-tax credit), but Tesla estimates that the system could earn a modest return of $8,000 over 30 years after, accounting for the tax credit and the value of the energy generated. Customers can choose to finance their Solar Roof through their home mortgage. The Solar Roof is a hardware solution that has the potential to increase the life of residential solar PV installations, improve the value of a home, and be more attractive to customers. However, the Solar Roof rollout appears to be moving slowly, with customer installations about to start and then ramp up through 2017. And as with many hardware innovations, price can be a barrier. Various analysts, including those at GTM, calculated a cost of $6.30/W, which is approximately double traditional solar PV prices today. Additionally, there may be complications for building-integrated PV receiving the federal Investment Tax Credit.

Software

In 2016, Tendril launched a new cloud software product called Orchestrated Energy, a residential continuous demand management solution for utilities that calculates a home’s heating and cooling needs, predicts customer behavior, and integrates connected devices to optimize system operation under a unique dispatch schedule. In pilot programs, the software solution reduced HVAC peak load by up to 50% and energy consumption from cooling by up to 20%. The solution is scalable and device-agnostic, and customers can interact with it via Tendril’s MyHome mobile app. The Orchestrated Energy software solution innovates by providing a seamless, optimized customer home energy management experience. Interestingly, there remains some doubt in the industry as to whether utilities are ready for this advanced software.

Platforms

Current, powered by GE is a startup within GE that offers advanced energy technologies—primarily combining LEDs and solar with networked sensors and software—for commercial and industrial facilities. It offers a single-source platform for energy management across multiple client sites, leveraging GE’s Predix, the cloud platform for all of the company’s Industrial Internet applications. Notably, Current has 125 plus partners providing apps for a variety of enterprise and municipal services (e.g., workspace/productivity management, asset management, and urban mobility/traffic planning) as add-ons to its Intelligent LEDs and the Predix Platform. In August 2017, Current announced a deal to install solar on 50 Home Depots in the United States in partnership with Tesla. Current has also partnered with AT&T to sell Internet-connected sensors to cities as a smart city infrastructure solution. San Diego was the first major city to sign on. The ability to leverage GE’s hardware and software is a strong starting point for the business, but the company has struggled to clearly define a strategy. In December 2016, GTM reported that Current is undergoing restructuring.

In the next installment, we will lay out other solutions related to business models, strategic relationships, market structures, and regulatory models.

 

Safety Must Come Before All Else with Automated Driving

— September 21, 2017

There are plenty of potential benefits that go along with automated driving, including providing mobility for those that can’t drive, making more work or leisure time available while commuting, and eliminating the parking lot crawl. But the foremost priority in introducing automated systems must be safety. That may mean slowing down deployments to make sure we have all the right pieces in place first.

Examine the Data

On the same day that US Secretary of Transportation Elaine Chao announced updated and streamlined federal guidelines for automated driving, the National Transportation Safety Board (NTSB) issued its report in a fatal crash involving Tesla AutoPilot in May 2016. While the Department of Transportation (DOT) streamlined the voluntary guidelines first issued by the Obama administration in 2016, no new enforceable regulations have been proposed. In fact, enactment of any new federal motor vehicle safety standards is unlikely during the current administration in Washington.

The NTSB examination of the crash that led to the death of Joshua Brown was its first involving automated driving technologies. “In this crash, Tesla’s system worked as designed,” NTSB Chairman Robert Sumwalt said. However, the AutoPilot interface did an inadequate job of informing drivers of what it was actually capable of and ensuring that it was only used in appropriate circumstances.

Recognize Limitations

AutoPilot is designed to provide semi-automated driving only on divided, limited access highways. The technology used—forward-facing radar and cameras—is currently not adequate to reliably detect vehicles crossing the path of travel in challenging lighting conditions or even to consistently detect lane markings for the steering control.

NTSB recommends that automakers add safeguards to limit where these lower level automation systems can be engaged and more actively monitor drivers to ensure they are ready to take over when the system cannot function. Some automakers have already started doing this, including General Motors. GM’s SuperCruise system includes high definition maps of more than 160,000 miles of divided, limited access highway across North America, and the system is geofenced to prevent activation anywhere but these roads. GM delayed the introduction of SuperCruise prior to the Tesla crash to add these and other features.

Educate Customers and Staff

Companies developing automation technologies also need to get more actively involved in educating customers and their sales and support staff about how these systems work. The National Safety Council launched an education program in 2016 dubbed “My Car Does What?” to put materials in state motor vehicle licensing offices. More recently, supplier Bosch launched the online Automated Mobility Academy to help educate consumers about new technology.

Deploy Highly Automated Vehicles

As highly automated vehicles (HAVs) approach initial deployments in the next 4 to 5 years, engineers working on the production designs are beginning to implement the features that will be required to ensure safety. Current advanced driver assist systems (ADAS) do just that, assist the driver. Ultimately, the driver can still control the vehicle and bring it to a stop even if traditional or advanced assists fail. In an HAV, there may not be anyone to take over or a control interface to use.

Navigant Research’s Automated Driving Vehicle Technologies report projects that by 2026, nearly 9 million redundant high performance compute platforms will be needed for HAVs. GM’s third-generation automated Chevrolet Bolt prototype has been developed with production in mind and it includes the necessary redundant systems.

User experiences that properly inform the people in the vehicle and are ready to operate safely even with no one aboard will be crucial to successful deployment of HAVs. Every company—from upstarts like Tesla to the oldest like Mercedes-Benz—must take this into account.

 

As Summer Winds Down, a Look at Residential Demand Response Leaders

— September 19, 2017

Summer 2017 was relatively light from a demand response (DR) perspective in North America—aside from California, which saw extreme heat waves. There were not a lot of opportunities to test the capabilities of DR resources that utilities, regional transmission organizations, and retail electric providers had stockpiled to prepare for high load levels or energy prices. However, there was still plenty of merger and acquisition (M&A), technology development and new program design activity taking place.

Navigant Research took this opportunity to compile a Leaderboard that examines the current vendor landscape for residential DR (RDR). The report analyzes the strengths and weaknesses of the key players in this global industry and displays those rankings visually in the Navigant Research Leaderboard Grid. This Leaderboard utilized broad guidelines to determine which market participants should be included to allow for companies that offer hardware and/or software and focus on technology or include program implementation services.

The Navigant Research Leaderboard Grid

(Source: Navigant Research)

This Leaderboard evaluated 15 companies based on 10 criteria to determine which competitors are Leaders, Contenders, Challengers, or Followers in the market. As the global RDR market has heated up in recent years, leading companies have invested heavily to develop their capabilities and strategy. There are a number of companies focused on other aspects of the smart grid arena now beginning to tackle the DR space, as well as many startup companies with new hardware and software offerings that take advantage of the plethora of available energy data and communication options for devices and customer messaging. Some of the incumbent RDR vendors are finding that they need to partner with these new players to keep pace with the changing marketplace.

The RDR industry is still maturing relative to the energy industry in general, but great strides have been made in turning DR into an operational resource for grid operators. In addition, this report combines both software and hardware offerings, as well as technology providers and program implementation services, which are all different segments that require diverse skill sets. Few companies attempt to serve all sides, thereby offering a complete solution.

As Navigant Research has published a series of DR-related Leaderboards over the past few years, it has been interesting to see the high level of new players and new technologies that enter the market on a regular basis. By the time the next is published, I expect to see more companies come on to the radar screen and disrupt the market, along with more M&As as successful startups are swallowed up by large energy players looking to expand their reach in the space.

 

Taking the EV Mainstream

— September 19, 2017

The plug-in EV (PEV) is rapidly evolving to become a viable mainstream option for almost every car buyer. As ever with automobiles, there is no silver bullet solution. This year there are several unique variations on how best to serve the needs of drivers seeking to minimize energy use as the PEV landscape matures. Navigant Research’s EV Geographic Forecasts report projects 50% growth in North American PEV sales this year and market share of between 7% and 11% by 2026.

Design is always a matter of balancing priorities. Priorities can depend on the target market, how the vehicle will be used, and budgets.

Tesla’s Approach

Tesla is trying to build on the premium brand image it has cultivated while creating the impression of going mainstream. The Model 3 has been promoted as an affordable long-range EV with a price starting at $35,000. That will yield a spartan car. Most customers will actually be paying far more to include current options, bringing the price to at least $59,000, with additional performance options to be added later.

GM

General Motors (GM) took a different approach with the Chevrolet Bolt, opting for maximum possible electric range and utility while keeping the base price under $30,000 (after federal incentives). Even including all options, the Bolt is still less than $44,000 before incentives. While some reviewers have criticized the hard plastic interior, the vehicle’s real-world range, handling, and utility have garnered very positive feedback.

Hyundai and Nissan

Hyundai and Nissan, by contrast, have veered even harder toward trying to maximize the value proposition of their respective EVs. The Hyundai Ioniq Electric and Nissan LEAF both have starting prices before incentives below $30,000 and even highly equipped models will still only hit about $36,000.

The Ioniq, built on a dedicated electrified platform with hybrid, plug-in hybrid, and battery-only flavors, went for maximum efficiency with a slick five-door hatchback body strongly reminiscent of prior-generation Toyota Priuses and a moderately sized battery. Hyundai aimed to keep both cost and weight down with a 28 kWh battery, less than half the capacity of the unit in the Bolt. With its modest weight and low drag, that’s enough for 124 miles of driving range and a leading efficiency of 136 MPGe combined.

After trying out a slightly futuristic design with the original LEAF, Nissan decided it needed a more conventional look in order to get an audience beyond early adopters. While the five-door hatchback configuration and basic dimensions are carried over, the LEAF now incorporates contemporary Nissan design cues both outside and in the cabin. Aside from the propulsion system, it’s now just an ordinary compact hatchback. With a more efficient drivetrain and battery that has grown from 30 kWh to 40 kWh, the LEAF is now expected to go at least 150 miles on a charge, double what it did when it debuted in 2010.

Chrysler

Fiat Chrysler, which has long derided EVs, has now opted to build on one of its core strengths with the Pacifica Hybrid. Like Nissan, FCA is focusing on the ordinariness of the driving experience with its plug-in hybrid minivan. The key distinguishing feature is that it has 35 miles of real-world electric driving range, enough to meet most daily commuting needs without burning any gas. But as a family hauler that might be used for road trips, no additional planning of where to stop and charge is required.

Buyers of vehicles that burn fossil fuels have long had choices ranging from tiny sports cars to full-size trucks. We’re now reaching the stage where those that want to avoid gas stations have choices at increasingly affordable price points as well.

 

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