Smart cities: how Data is powering the utility companies Generation 2.0

By - 24 April 2017

If you are an energy junkie (understand, work in the energy industry), one of the big debate is whether the Horizon 2020 objectives (20% cut in greenhouse gas emission, 20% renewable energy production, 20% energy efficiency improvement) will be reached ? The answer is « yes », according to the cleantech and greentech start-ups diligently working towards implementing sustainable energy innovation.

For the corporates, while the new H2020 regulations could have initially been perceived as a constraint, they are now generating growing opportunities, namely when it comes to energy efficiency. This trend goes hand in hand with the rise of connected homes or cities, a market still highly undertapped when applied to the energy sector. All players have entered the game. German giant E.ON hit the headlines when it announced in 2014 a split in two distinct entities: Uniper, to deal with traditional energy (hydro, natural gas, coal) and trading activities, and E.ON, the old name kept for its new branded entity, to deal with renewables, energy networks and customer solutions. This new E.ON strongly echoes what Ethernet inventor Bob Metcalfe coined as Enernet. Distributed energy, storage, data-driven consumption and a new approach are all parts of this new vision. As a matter of fact, 100% of the energy startups rated by Early Metrics so far work on at least one of those topics, trying to bring intelligence, connectivity and stability to the industry.

Let’s explore how innovation is transforming the energy industry.

Data, your best friend when igniting energy transformation

Energy efficiency requires first and foremost an accurate understanding of one’s environment, which means the collection of energy data. Monitoring startups like Ubigreen enable business facilities to track energy consumption and push for the adoption of eco-friendly behaviours. Energy consumers are, however, not the only ones interested in their consumption data. Some startups started working on energy data-based business models. Part of the connected home startups for instance, specifically aim at aggregating data and understanding consumption patterns on a large scale (city, region, nation). Google-Nest Labs’ Rush Hour Rewards program is a strong example of such approach. By learning how customers behave, it is possible to implement demand-side management programs and reward customers who accept to lower their consumption at peak hours, thus avoiding blackouts and grid complications.

Beyond understanding how heating and AC impact utilities and grid operators, some startups have developed technologies to investigate the exact role each and every electrically powered device has on the overall energy demand, and how they are used. Homepulse for instance, disaggregates the load curve and identifies « events » that are then matched to a specific action — use of coffee machine, toaster and so on so forth. Homepulse thus builds a bridge between the energy world and other verticals such as home appliances. The enernet here finds another illustration as energy data creates a dense network of relationships between different services providers, manufacturers and the endusers.

The next big facelift: updating the energy infrastructures

Whilst data can help understand energy use, and technology innovation provides adaptable and curated solutions for consumer usage, the main challenge for the energy industry is infrastructure update. The current grids are made to support centralized production of conventional energy but with decentralized energy production comes complications. Decentralization and the rise of renewables quite logically bring stability issues since harmonic and voltage interferences cause disconnection or short circuits. Startups are focusing on these challenges specifically: Synvertec has developed an algorithm to smooth out the integration of renewables onto the grid, and favours the deployment of photovoltaic. As the economics around storage and local generation are not obvious in all countries yet, managing the electricity production is also an issue, which is being tackled by startups like eLum Energy, who provides a software to help store, sell and use microgrids energy at the best moment.

By driving data collection and analysis, and contributing to synergies old and new infrastructures, startups power the energy industry transformation Market decentralization and the rise of connected- homes, -buildings and -cities leave an open gap for small players provide hi-tech solutions all along the value chain. Here again, the key to success and energy transformation acceleration lies in the nature of the collaboration between large corporates, and startups.

So, will you be more like E.ON or Uniper ?

Jonathan Williet, for Early Metrics

Startups mentioned in this article have been rated by Early Metrics

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