Weekly Update

What the utility of the future looks like

As utility industry trade show DistribuTECH wrapped up last Thursday, attendees got a peek at not only new product offerings — from smart thermostats to software platforms that manage smart meter data — but also the potential for what a utility of the future might look like.

In a Pike Research webinar held at the event, Andres Carvallo, the chief strategy officer of smart grid network software provider Proximetry, noted that the smart grid has “reached the teenage years” and is “still evolving.” As it grows up and reaches its full potential, here are five important ways in which how we interact with our utility can be revolutionized and why they matter.

1. Receiving behavioral analytics. From OPower to Tendril, the race is on to see if text messages, emails and even mailed reports can get consumers to turn off their pool heater and turn up their thermostats during peak demand summer months. Tendril, in particular, has a social platform where customers target an energy reduction goal online and then interact and compete with others in their community to lower their energy use. Experts are even online to answer their questions.

Tendril’s early trials show customers dropping their use by 7.8 percent versus pretrial consumption. Sure, every startup is doing a social platform right now, but how many of them are trying to save you money? Expect your utility to try and motivate you to change your behavior. (Stay tuned for a full report on data analytics and the next generation of smart grid companies, to coincide with GigaOM’s Structure:Data Conference in March.)

2. Accessing real-time information. As we slowly move toward widespread smart meter deployment, customers will have real-time access to their energy usage. They will be able to switch on their pool heater, a major energy hog, and then check online and see how it is impacting their bill. On the utility end, having constant access to energy consumption patterns will allow much better management of demand response, load balancing and response to outages. Overall service should improve.

3. Having demand response in the home (the machines are taking over). Energy generators produce more energy than can be consumed in order to avoid a blackout in the event of a surge in demand, like during a summer heat wave. This is fundamentally wasteful. But what if the utility could control your thermostat? There is a lot of buzz right now about the Internet of things (IoT), in which every device in the home can wirelessly send and receive data. But one of the more controversial possibilities is that your utility can start controlling your newly connected appliances. Yep, it feels a bit big brother and may be a long shot, but who thought we would let the TSA use millimeter wave detection to see through our clothes? And rather than a touch of radiation, utilities may do something nice for customers, like paying them for greater control of their appliances.

4. Scheduling and powering your car. Yes, EV adoption is slow, but there are a ton of rollouts this year, from the long-awaited Tesla Model S to the plug-in Prius. This is both an exciting new revenue stream for utilities and a potential major headache. The common wisdom has been that the advantage of EV charging is that it is done overnight when demand recedes. But what happens when 15 percent of the population is charging their cars at 2 a.m.? This is a problem that is 10 years away, but people like Roger Melen from the Toyota Infotechnology Center are already working on architecting cloud platforms that will allow a utility to communicate with a home charger, a car and a driver’s mobile phone to coordinate optimal charging times for the grid. (You can come hear Melen and others discuss the future innovation of EVs and the grid at a Telecom Council meeting on connected cars on Thursday, in Santa Clara, Calif., where I will be moderating a panel.)

5. Selling services and products. On last Tuesday’s Pike Research webinar, Carvallo commented, “We’re digitizing the world. Power is one of the areas that has to be digitized.” Whenever we have digitized any other product, whether it is music or medical records, new market opportunities have arisen. If Jeff Bezos ran a utility, he would do two things: sell you products at a great price and provide exceptional customer service. Now that consumers will be pulled online to view a wealth of real-time information about their energy usage and perhaps even participate in a community of energy savers, there will be a great chance to sell them products, like smart thermostats and energy-efficient HVACs, where the savings are immediately quantified online for customers in kilowatts and dollars. There is an additional opportunity to not just sell but also service those appliances. We are seeing this expansive thinking in telco, where traditional telcos, like Verizon, are now selling home energy management gear, leveraging the customer relationship.

Utilities are largely regulated, have limited competition, and are not associated with innovation. That said, innovation is being thrust upon them by the smart grid, and there is an opportunity for them to reinvent themselves as information technology companies that aren’t just a dumb pipe of electricity but a company we rely on to better understand everything from car charging to behavior around heating and cooling. All the space needs is a few visionaries.

Question of the week

What other innovations can you imagine from the utilities?