Blog Post

The Internet of Things and energy

In the cleantech and utility worlds, it’s called “the smart grid” and “energy efficiency” tech. In the broader tech realm, it’s called the “Internet of Things,” or essentially, when every device can talk to each other. Let’s bring these two ideas together, because I think the so-called Internet of Things will play a crucial role in making systems and the consumption of resources much more efficient.

Smart devices in buildings

Let’s drill down into devices used to light, and heat and cool buildings, and the efficiencies that can be delivered when these devices are networked and can talk to each other. Only 1 percent of the world’s buildings use systems to control and network lighting, and just 7 percent of lighting in commercial buildings is controlled by smart control systems.

But the efficiencies from networking lighting and using smart software to control the lighting in an efficient way, are clear. Earlier this month, a startup called Enlighted Inc. launched a product that places wireless sensors on every light fixture in a commercial or office building, and the company says by using distributed sensing, its system can cut energy consumption from lighting in office and commercial buildings by 50 to 75 percent. Enlighted Inc.’s first customer is green carpet company Interface Services, which used the lighting system to cut down on energy consumption of a 35,000 square foot facility in Acworth, Ga.

Smart lighting controls are so under used, and could be such a large market, that a half-dozen venture-backed startups have launched products. Enlighted Inc. is backed by Kleiner Perkins Caufield & Byers, Intel Capital, (s intc) and Draper Fisher Jurvetson. Competitor Adura Technologies is funded by NGEN, Claremont Creek Ventures, and VantagePoint Capital Partners. Redwood Systems, a lighting control company which sells a control and sensor system for LEDs that runs over an optimized version of Ethernet cables, raised money from Battery Ventures, U.S. Venture Partners, Index Ventures and Mitsui & Co.

Beyond lighting, networked heating and cooling devices can cut loads of energy consumption, too. Regen Energy is a Canadian startup that makes wireless nodes that can connect to HVAC systems and it uses “swarm logic” software to manage the HVAC systems like a swarm of bees or a flock of fish. Last month, Regen said it had raised $5.5 million from investors and opened its first U.S. office in San Diego.

To note, these are a lot of startups in the smart building industry, and the industry is dominated by companies like Honeywell (s HON) and Johnson Controls (s JCI), who have been working on a less digital and networked version of the smart building for decades.

Smart devices on the grid

By now, I’m assuming you’ve all heard about the huge efficiency and business opportunities of the smart grid. While Cisco (s CSCO) has changed its smart grid strategies in recent months, Cisco CEO John Chambers still insists that the smart grid poses a bigger opportunity than the Internet. Cisco’s original smart grid product is selling ruggedized grid-specific routers and switches.

Most utilities in the U.S. have at least started to plan a strategy for how they will enter the digital age and are increasingly looking to add connected devices to their grids to reduce blackouts, add more clean power, and engage more with their customers. Smart devices are being installed on all levels of the grid from the substations to transmission to distribution to each home.

Many startups have tried to enter the smart grid at the individual home energy management level, and most haven’t really succeeded yet. That’s because consumers aren’t all that interested in monitoring their own home energy, yet, and utilities are price sensitive to expensive home devices. But one day the digital home, will also be the smart energy home, it’s just a matter of how, and when.

Cell phone companies, who are building the networks for much of the Internet of Things, are looking to have their networks run the smart grid, too. Some utilities are game, like Consumers Energy, and Duke Energy, (s duk) though many utilities are opting to build their own smart grid specific networks.

Smart devices in cars

And finally, vehicles and transportation, are also becoming part of the Internet of Things, and are benefiting from efficiency gains. Car sharing companies use the Internet and mobile phones to manage the use of vehicles down to 15-minute intervals, and install connections in each car to manage the service. Car sharing directly leads to the reduction of personal vehicle ownership, turns the car into a service, and more efficiently utilizes the car. Peer-to-peer car sharing, where people rent out their own cars into the a network, can lead to even more efficient uses of personal vehicles.

Less obvious are the efficiency gains that GPS navigation services have added to vehicles. If you know the most efficient way to drive to a destination, you save on gas.

Electric cars will be even more reliant on networks and software to manage the charge (so the utility’s grid isn’t overwhelmed) and so drivers can find the nearest charging outlet while on the go. Electric vehicles are only slowly rolling out, due to slow-moving car companies, and a sluggish economy.

Boring factor

Lighting, heating and cooling, the power grid, and cars, might not be the coolest applications for the Internet of Things (well, cars are pretty cool). But they are ways that the Internet of Things can make a major positive impact on developing far more energy-efficient systems. In an environment that has struggled to deliver clean power, biofuels, electric cars and other cleantech products, the Internet of Things could be one of the most important ways to influence energy use.

Images courtesy of Redwood Systems, Duke Energy, Regen Energy.

5 Responses to “The Internet of Things and energy”

  1. Kate Schackai

    Really interesting article — I read a lot about smart grid and the Internet of Things, but for some dumb reason hadn’t really considered their relationship. Thanks for connecting the dots. :)

    I might be slightly obsessive about this, but I suspect the problem at the heart of smart grid adoption and consumer interest (that is, lack thereof) is really a sort of digital divide. Huge swaths of people don’t have smart phones or anything else that might run an app, and “simply” keeping an eye on electricity consumption sounds like a lot of effort to someone who isn’t used to tapping an icon to check in.

    The tech needs broad adoption and consumer interest to proceed, but the technical capabilities right now already far outstrip the technical resources and familiarity of a lot of people.

    This concerns me a lot because I love tech, and I don’t see the need for a bubble, but a bubble is what real potential will become if the market isn’t brought along. Who is working on broadening not just access but tech familiarity beyond the bounds of the already besotted (and mainly urban) audience? Genuine question (not plugging anybody).

  2. An explanation for consumer indifference is that energy by and large is cheap. And mucking with dashboards and monitors and all that stuff won’t save you much money in the end. What’s needed is a way to make energy alternatives sexy and cool.

  3. Like your thoughts here, Katie. Where did you get the stats about efficiency control units in buildings?

    Regarding the consumer interest in home energy monitoring; I think their lack of interest comes more from the fact that most consumers aren’t yet educated about the available offerings, like Control4, and that the majority of people just don’t have the time/don’t want to spend the time tracking their energy use. That’s when companies like Opower and Tendril come in handy as they are the ones who actually run the analysis of consumer energy use, which then provides transparency to both the utility and the consumer. The question then becomes, what is the best way to educate the general consumer about the ability to personally monitor or use analytics platforms to reduce their energy usage and ensuing costs?