The heat of summer tends to put the topic of energy demand management front and center of economic discussions. Aside from the important sustainability issues, energy efficiency, and trying to keep summer energy bills down in the midst of heat waves, there are real smart grid issues and opportunities increasingly linking the utilities industry with the semiconductor and electronics industry.
Smart grid and smart metering continue to gain momentum alongside of renewable energy, particularly given the growth of electricity generated by solar photovoltaic (PV) roof-top installations. The rise of residential PV installations continues as costs for PV installations are driven down, but there is a long way to go still in reaching parity with fossil-fuel derived electricity. While Total Cost of Ownership (TCO) for buildings (whether residential or commercial) can be dramatically reduced by implementing various energy efficiency and PV roof-top installations, adding the ability to manage daily use increases the TCO savings opportunities.
Managing when and how you use energy to run your residential or commercial building comes down to algorithms and economics: a smart meter and a smart device offering you risk reward alerts to improve your energy use decisions. Indeed, demand management, once seen as the (prosperous) domain of the smart meter, is now moving further downstream to an application service that extends your smart thermostat to your smart phone. Behind this latest series of service offerings for user-based demand management tools – or the next frontier of the smart home – are the major cellular infrastructure companies such as Verizon, AT&T, and others, as recently reported by GreenTech Media.
There are two critical opportunities arising from the smart thermostat gateway to demand management: data and two-way device control (data sent to and from the thermostat allowing for remote control through a smart device or computer). Both of these opportunities have been quickly seized by cellular infrastructure providers: software applications are plentiful to enable users to control, monitor, and analyze their use patterns to improve energy management; communications and network providers are including energy efficiency capabilities as part of their smart home suite of service offerings powered through the user’s smartphone or tablet, turning those devices into the central hub for controlling the scalable smart home; and utilities are recognizing that their domain and access to their customers needn’t end at the meter (whether smart meter or analog) affixed to the exterior of the building.
So what does all this have to do with the semiconductor and electronics industry beyond some additional smart meters, smart thermostats and maybe some smart phone upgrade potential? Quite a bit, actually.
There is a significant amount of highly usable data at stake, not to mention the gateways and networks along which these data will travel. Furthermore, there is the opportunity to provide increasingly favored microgrid solutions and to offer micro-networks (cellular-based versus wide-scale networked) that do not require the intensive capital investments that relays demand for previous generation smart meter solutions.
The increasing threat of slowdowns in smartphone sales in North America due to saturation and slower refresh-cycles means that new market opportunities are in demand. Competition among cellular service providers to leverage the smart phone as the hub for the smart home is gaining momentum. Meanwhile, on the industry service side, there is an opportunity for these cellular service companies to extend their cellular LTE infrastructure for use by utilities as part of the in-demand smart grid communications infrastructure. The offering to the utilities not only reduces capex investment costs by removing relay networks, but it also takes the utility all the way through to the customers’ smartphone, no longer stopping at their smart meter, or at best smart thermostat.
The “energy internet of things” is a green wave of growth that is rapidly expanding, as witnessed just this month by Verizon's Grid Wide Utility Solutions. Internet of Things (IoT) is being extended beyond the smart thermostat and smart meter, offering new networking opportunities for utilities and for cellular companies, perhaps adding a new level of two-way connectivity down to the last mile.