Download A Smart Energy Ecosystem

A Smart Energy Ecosystem
Presentation to the Ontario Smart Grid Forum
Scott Stewart
November 25, 2008
Telco – The Ecosystem Evolution
 Circa 1980 –
 Regulatory barrier
Residential
Connectivity
Residential
Connectivity
Local
phone


Long
distance
2
Post AT&T breakup
Telco - consumer
choices and solution
Ecosystem
Evolution of the Telco market
Comm. Act of 1996
1984
With limited sources for network connectivity, resellers’ attempts to compete are limited as
they work from the same cost basis and have little ability to differentiate themselves.
Communication
Network
Connectivity
Customer
Twisted Pair Wiring
As additional forms of connectivity are introduced to the market, the competitive
landscape changes dramatically, with multiple competitors able to differentiate
themselves by both price and service.
Communication
Network
Connectivity
Customer
3
Cable
Ethernet
Cellular
BPL
WiMax
Ecosystem 2008 - Consumer choices and solutions
Broadband
Cellular
Residential
Services
Hardware
Land
Line
4
The impact of the Ecosystem expansion
(Really


Approximately
50% of gain
through M&A
Approximately
$30B in new
products and
services that
did not exist in
2000
Local phone
Long distance
phone
Local phone
Long distance
phone
Internet
Wireless hotspots
Cellular
Home Security
Hardware
TV services
(2000)
$51.5 B revenue
(2007)
$119 B revenue
5
)
The Parallel: Telco and Energy
In much the same way that the Telco industry was constrained by a single source of communication
network connectivity, the energy markets are constrained by a single source of energy supply – the
generator through the local wires and poles company.
Customer
Generation
In order to relieve the constraint, alternative forms of energy supply must be introduced to the market.
The alternatives can come in the form of alternative supply or demand reduction (Virtual Generation).
Customer
Alternative Supply
•Solar PV
•Micro-Gen
•Battery Storage
•Hybrid Cars
Demand Reduction
•Energy Efficiency
•Load Management
•Virtual Generation
Generation
6
VC Investment Telecom vs Cleantech
VC Investments in Cleantech 2003-08
VC Investment in Telecom 1995-98
$4,000
300
$3,500
250
$3,000
$4,000
$3,500
300
Investment ($mil)
250
Deals
$3,000
200
$2,500
200
$2,500
$2,000
150
$1,500
Investment ($mil)
$1,000
100
$2,000
150
$1,500
100
$1,000
Deals
50
$500
50
$500
$0
0
1995
1996
1997
$0
1998
0
2003
2004
2005
2006
2007
– VC investment in telecom peaked in 2000 just prior to rapid growth in
mass markets
– VC investment in Cleantech advancing at a rapid pace although some
slowing due to recent economic downturn
– VC investment in Cleantech expected to peak in 2010
– Federal and provincial subsidies will act as accelerators for innovation
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2008*
Mass Market Emerging Energy Ecosystem
It’s just
another point
in
the cloud
Retail
Consumer
It’s just
another
retail
transaction
It’s our
“core”
business
It’s just
another
managed
service
8
State of the Connected Home – Summary 2008

Online consumers cite safety alerts and home
energy conservation as the top benefits of having an
integrated home control system that enables
control/monitoring via the Internet from any device.

Mass market consumers are a bit more positive (and
less negative/more neutral) about safety/security
and energy conservation than other benefits, such
as one-touch control/scene setting.

Energy-related products and services—and
one security product—are the top-rated
concepts tested in this research.
–
–
–

Consumers are most able to envision adopting new
products and services that are simple and compatible
with their current ways of doing things.

They warm to the idea of using technology to improve
how they do specific tasks that are typically done on
paper, on the phone, and/or on a computer—such as
paying bills, communicating with others and managing
to-do lists.

By contrast, they have trouble envisioning how to use
technology to streamline routine tasks that
traditionally involve physical activity, such as lawn
mowing, meal preparation, dishwashing, etc.
A home energy management gateway that
delivers a reduction in energy costs.
An energy-saving power strip that allows users
to turn-off devices drawing power and monitor
energy usage.
A programmable thermostat and a home zone
sensor system, both of which allow
monitoring/control via computer or cell phone.
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Interest in Home Energy Management System
% Savings on Annual Home Energy Bill
Required to Consider Buying a
Home
Energy
U.S.
2008 Management
CanadaSystem
2008
Total Online
HHs
(n=625)
Mean: 41%
0% 3%
Total Online
HHs
(n=222)
Mean: 38%
7%
33%
1%-25%

Target consumers have high expectations for
payback on investment in a home energy
management system—on average, they expect to
see about 40% annual savings on their home’s
annual energy costs.
–

32%
The average U.S. household spent $1,493 for
household fuel in 2001 (the latest year for which
data are available), according to the U.S. Energy
Information Administration Residential Energy
Consumption Survey.
–
45%
26%-50%
43%

51%-75%
76%-100%
QY42B.
10%
7%
9%
11%
More than two-fifths expect savings in the 26-50%
range.
On average then, consumers expect to recoup at
least $600 per year from their energy bills when
buying a home energy management system—likely
an unrealistic expectation.
Mass market consumers have higher expectations
for payback than primary market consumers,
particularly in the U.S.
10
Current satisfaction with home energy management systems
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What is next?
 Continue to deploy AMI as rapidly as possible –
this is the key enabler.
 Employ standards based open architecture to
encourage innovation and non-traditional market
entrants.
 Customer expectations must be met for wide
scale adoption.
 Wide scale adoption will bring prices down both
in the wholesale market and aggregate KWH’s.
12