Smart grids attract smart money: ‘With the IoT it’s the energy use cases that are attracting investors’, says AutoGrid
New developments in the generation, distribution and consumption of electricity have made the energy sector a hotbed of innovation in what has become known as the Internet of Energy.
“With the IoT more generally, the marketing hype has largely gone ahead of the reality,” says Raj Pai, global head products and marketing at energy analytics firm AutoGrid. “But where people are spending is in the energy use cases. These are the ones that are getting funded.”
There are a couple of key reasons for this in addition to the size and centrality of the energy sector itself. One is because energy is going through its own version of tech’s bring-your-own revolution (it uses the same terminology). The market for smart devices is increasingly driven by consumer demand. Whereas utilities companies used to supply a standard thermostat – then later a choice of thermostats – now there are a large number on the market and people purchase them from retail sources. What’s more, around half the thermostats sold are now “smart”, says Pai, who sees this trend widening.
“What used to be ‘bring your own thermostat’ is now expanded to ‘bring your own things’,” he says.
These “things” can all be programmed to become part of a wider network – an energy IoT. As part of such a smart grid electricity can flow from the devices as well as to them. They include photovoltaics (PV) controllers, smart-home gateways and electric vehicle (EV) chargers, and they will soon be joined by many more appliances, Pai predicts, as people start to appreciate being able to control devices remotely over the internet.
“It’s just a matter of time before so-called dumb devices go the same way, with customers saying ‘I used to buy a dumb device but now the value of that device being connected is so tremendous I will buy a smart one instead’.”
Another driver, especially in Europe, is the emerging “imbalance market” for electricity generators.
“Europe has a connected grid and you get hit by imbalance costs if you’re not in the range in which you had forecast. That’s the case for both utilities and the retailers,” Pai explains.
