When we think about the energy industry, we don’t always think fast-paced innovation. Sure, there have been some great advancements with solar and wind technology, but even that has been in the works for decades. When you think about it – a lot of today’s energy still relies on fossil fuels – a substance literally formed millions of years ago. And the general model for energy hasn’t changed very much in the last century either. Today, energy is generated in centralized locations, powered by a few major fuel sources, and distributed by the electrical grid for use in homes and businesses. This model has proven to be reliable and everyone has standardized on it. So if it’s not broke, why fix it?
The role of utility companies is to balance energy generation with demand in a cost-effective way. For most of the world, energy is highly reliable and relatively inexpensive – but not always the most efficient. The IoT era, is going to turn all of this on its head in a very exciting way. The Internet of Things will impact how energy is generated, distributed, consumed and stored. More than ever before, there will be a ton of opportunity for existing companies and new start-ups to disrupt this very established industry.
Let’s start with energy generation. There are a variety of new ways that energy is being created at scale. Connected solar panels and wind turbines are now significant sources of energy today. Here alone in Massachusetts there is over 1,400 Megawatts of solar capacity installed with most of these systems being connected. Connectivity provides a real-time snapshot of the current energy being generated and can offset the need for traditional centralize energy generation. IoT connectivity also allows companies, or home owners, a view into the health of their solar panels or wind turbines that are often installed on roof tops or in remote locations which can maximize the uptime and output of these devices.
The second area of major disruption is in energy distribution and usage. As more devices get connected it creates new opportunities to better manage supply with demand and change consumer behavior. There are broad capabilities in the market today like utility driven demand response programs which leverage connected devices, including smart thermostats, to turn off high energy consuming home devices during peak demand. They have proven effective in protecting against brown and black outs across the United States.
In addition, there are new connected devices in the market that are focused on creating a better customer experience and changing customer behavior over time. One example of this is the Sowee connected home station which is designed to help consumers manage residential energy consumption while optimizing comfort and remote control every day devices. Rather than just focusing on the temperature set point as the only variable, this station also allows the consumer to set a budget for the month with the temperature adjusting based on that budget.
Finally, energy storage is also emerging as an opportunity. Sparkplug Power, for example, has developed a smart grid energy storage solution for businesses and municipal utilities. Having connectivity provides Sparkplug real-time insight into energy stored and consumed and provides the company granular control over how energy is used as well as insight into the status and health of their products.
The IoT has opened doors for a number of industries, but smart energy is one where I believe we will see a positive global impact. Having the ability to ensure energy is being consumed efficiently and responsibly ensures that the lights will always work when we flip the switch.