Google outsmarts the smart grid

Will Google take a multi-trillion dollar industry to the mat?

In the press this week Bloomberg broke a story:
Google Said to Plan Energy Push With Tools for Utilities 

and Forbes responded 

As noted this is probably an alternative to the energy saving play Google made some years back

They backed out of powermeter in late 2011, surrounded by rumours that the utilities did not want to play ball (i.e. share their client data with Google ) despite Big Data analytics being of obvious potential interest to their end-user clients.

If so the game-plan for the utilities may have back-fired as this new Google approach looks far better thought through and far more of a threat to the utilities.

But these articles miss the point !

Why ?  - While united the Smart Energy Demand Coalition is far more interesting than any individual utility (because it represents an umbrella concept) , I believe Google is finding a path straight to the money!

 Members of Smart Energy Demand Coalition might all want to watch Google:

SEDC Executive Members - An influential bunch (particularly in Europe)
A little background - The Automatic Meter Reading (AMR) market is a $multi-billion land grab that is going on with big utilities, and big metering operations participating. Note: the smart meter industry is a tiny subset of AMR

However it is famously said that:

During a gold rush you want to be either the guy selling picks and shovels or the gal making the jewellery.

I believe (and suspect Google sees) that these players are all leaving most of the money on the table,

SEDC Associate Members - No less impressive Global Titans here too!

This team looks pretty Smart to me to so how can Google Outsmart them ?

This play is more mature - 

Absent deregulated markets utilities "own" their clients ( In the US location largely determines your utility provider) . 

So deregulated markets face more competition than US counterparts (like uncompetitive providers of last mile ISP access in the US).

Maybe this is why the SEDC first sprang up in Europe as brain child of VaasaETT (The Global Energy Think Tank)

However, even in the US there is a "bigger grid" where loads can be advantageously shed between states (because time-zones and weather events and hence demand are highly regionalised too). 

In this market the infrastructure provider is key and no utility can own the market. So Google can access this without co-operation or partnership  from utilities, because those that will not sit at this table will lose!

And here is the winning play

If Google can also deliver demand intelligence (via some grid independent API) at the point of use they can effectively cut out the utility entirely (except as low-margin commodity provider).

The point is that however big the AMR market is, the main purpose of that market is to deliver efficiency and data intelligence to end users and support them better by smarter matching of supply to demand.

Almost universally providers of meter data also provide visualisations (charts) because it is easy.

Very few offer analytics  (kWIQly clients are an exception), and we know Google is in this market.  It is acting on intelligence delivered by analytics that is where the value lies.

The domain intelligence and pattern recognition that can unbundle value from these near infinite (and fast growing) data streams and then package it up as simple sophisticated solutions is worth a lot. It scales and reduces utilities back to what they are - a pure commodity play.


It is very simple and needs only a superficial understanding of how industrial disruption ( ).

Either existing industries (AMR, Utilities, Construction and Heavy machinery) will collaborate to deliver the value the markets (and Climate Change) are crying out for, or Google will pip them at the post.

The requirements are really quite simple -

1)  Good real-time tariff APIs for end-users (via packaged intelligence) to know what energy costs and likely will cost
2) Ability to mine for energy saving opportunity in AMR data (pattern recognition)
3) Connectible plant that can exploit the opportunities so discovered automatically

Either this will be delivered piecemeal (and a later consolidation and sharing of protocols will happen) or it will be delivered via a protocol open to all from the start - which will freeze out Google as a commodity provider (except where they really have the specialised domain expertise ).


As a big player in this field you need to prepare three things:
  1. A collaborative attitude with peers (utilities and network infrastructure must play well with competitors via open protocols etc - so that specialist service providers have access to the field)
  2. Emergent domain specialist operations (kWIQly is a bit too small just yet) must be hand-held to break into big markets (in land-grab markets first entrants that scale fast hold long term estate value)
  3. A dialogue with existing (commodity clients) that can up-sell and cross-sell new differentiated value propositions identified as suiting them from their energy data - this will reduce churn (enhance client retention) and convert their data into an asset - rather than leaving it unexploited in a database.
As a smaller niche player:

It's all about exposing value (eg via APIs) and creating value propositions that exploit network effects (Small businesses or startups that do not understand this concept need to) and being prepared to partner for growth (rather than trying to row organically) - because speed is of essence.

 As Google

Define the Smart Demand/Supply interfaces to allow the niche products to bypass the utilities with readily installable Gizmos and cut out the middle man. (Maybe acquire these once they show traction)

Meanwhile provide a set of tools that utilities must use (or suffer the consequences) to ensure their adoption of your API's - Oh but you are doing that already !
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Who thinks the Startup Incubator model is broken

While RBS do not explicitly state the Startup Incubator Model is broken, they are sure throwing a spanner into the works of "business as usual".

The Startup Incubator Model is broken !

RBS Group is more than a highstreet bank LSERBS  wiki despite not so long ago (2009) being the worlds largest company by both assets and liability measures it is now 81% owned by UK Gov.

The UKGov is not a hotbead of innovation - The Speaker in the Lords still sits on a woolsack to celebrate their illustrious past.

Experienced engineers often say - If it ain't broke don't fix it! 
however with RBS weighing in at a mere £20B market capitalisation just five tumultuous years later, a bit of fixing may be in order.

They seem to be taking change seriously.

I was lucky enough to be picked with my colleague George to attend an event with a difference yesterday at the RBS Innovation Gateway inaugural networking session.

The biggest takeaway for me (beyond enjoying a great session) was that it crystallized some thoughts I have been having in terms of broken mentoring and Incubator models over the past year. In fact it made them obvious.

I had seen what i thought was a serious problem in B2B innovation that will not be solved without disruption. However the disruption came from the last place I anticipated.

What am I getting at?

A room full of "Mature" individuals

Look at the people in the room

Now consider them as tech. founders and startup evangelists
 - what do you notice ?

Hint - How old are freshly hatched chicks?

People talk of business evangelism so when Paul said to Timothy:
"Let no man despise thy youth; but be thou an example of the believers, in word, in conversation, in charity, in spirit, in faith, in purity."

He didn't mean us ! :)

In contrast with the normal startup scene gathering at a Seedcamp mentoring session or  rockstart accelerator these people (myself included and with some notable exceptions) are getting pretty bloody old !

Why is this ?  My answer is not a rant, more an argument to "choose horses to suit courses"

There are two sides to the coin.

The B2C innovation market has been driven by the social media startup (round up the usual suspects), introduced some excellent taxi-hailing apps, provided the means to find a place to lay your head overnight and serves big data.

These requisite skills are largely driven by the worldly experience as may be gained by a schoolgirl or boy or college graduate, fired by the enthusiasm of youth, and with all the passion of a toddler who is prepared to run full tilt at a table enough times to realise that such things hurt !

While "getting on an aeroplane to attend a business meeting" soon loses its charm. In the mould of Silicon Valley they rightly refuse to fear failure (there are no lasting consequences), they are as good as their pitch (but not necessarily as their word), and are prepared to move a few thousand miles or kilometers from loved ones for a crack at hatching a scheme in an incubator. They deserve the chance.

For every few dozen eggs that are incubated a few emerge and one or two may become unicorns (mixin: metaphors from the investor perspective). There is a lot of "follow" investment chasing these markets, so either an investor has great deal-flow because he or she contributes or they become a useless commodity overhead which could be replaced by a more efficient investment market index. (Sorry if the truth hurts)

The flip-side is still in the air but 
RBS just reminted the coin!

YES RBS have failed - they are a banking institution after all (and I too admit to some feelings of mild schadenfreude). They also stand to be disrupted (bitcoin etc).

But somehow they have the maturity to survive (founded 1727) - Did you ever notice that banking and education (who teach the markets) are amongst the most conservative and successful long term organisations?  These are not the lean, the fail-fast, the "can I have a do-over?" market. They are the proven, the battle-scarred and weather-beaten, the worldly wise survivors of great conflicts.

And they are being told to innovate, 

by the markets and by the educational institutions.  

Companies are even forming to promulgate such aims (yesterday Market Gravity did a great job).

However, when you consider energy and waste, you are talking timeless human needs (rules do not change, experience is invaluable) that applied equally to your average cave-girl or cave-man (who probably looked a lot less pretty than Raquel Welsh and perhaps more like Oetzi who emerged from a Glacier in the Alps a few years back

 Raquel - not so much !
Well dressed, a great set of tools -
 looked like he knew a thing or two.

Neither sustainability nor survival
 is a beauty contest 

They don't have such wide appeal because engineering is like this - unforgiving!

Many die but some survive. Like me they may be opinionated, will not go live in a commune on ramen noodles for three months, may know far less about social media than they do about high voltage powerlines, waste water treatment, emerging materials science or in our case diagnosing energy waste. But even at 40-50 years old they still have passion , they are in the game, their word is proven, and their experience tested. These are friends worth having in a crisis, they have real networks in real life.

So, while VCs and even the odd Metropolis funds yet another round of cookie cutter college apps, or host another clutch of eggs in their incubators, I think RBS is in effect saying - "Hold on a minute !"

"Don't kill the Golden Goose, why not teach these old dogs some new tricks, and maybe, just maybe some of these bloody ugly ducklings will emerge as beautiful".

One key to B2B success is understanding problems with deep domain knowledge, experience in surviving complex environments, and getting to know your friends.

RBS has a huge property portfolio and some fascinating sustainability challenges.
It isn't an incubator and the set up looks more like a gladiators arena, but the great thing is I bet there will emerge more than one winner !

Exhibiting timeless wisdom RBS just invited an industry to a great feast. LK 14 15,24. explains clearly who the winners and losers will be.  You only need to show up - but do you have fields to attend or somewhere else to be ?
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Breakfast and Bed - Reverse Engineering Triumph

Last week I visited three truly world-class companies who are active in the building services arena. 

I can't reveal names but for fun I aggregated some quick statistics:

Combined turnover was 137 $ Billion

This is what One Billion $ looks like !
imagine 137 of those - it could really wear a hole in your pocket
Combined Employed staff exceeds 408,000 , that's more than the population of Nice in France,
And that's a Nice crowd! 
 or even Tulsa, Oklahoma !
Tulsa - Never been there - but if you're going there's plenty to sing about

So annual turnover per employee is more than 250,000 US  

That sum is rather greater than the modest beer tab I ran up in the fantastic B&B where I stayed near Gatwick Airport
No your eyes do not deceive:  
Yes that is a Lotus Evora parked by the front door !
Click to Enlarge
So, to the boring part of the blog...(c'mon you can handle it) 

What does a Lotus Evora, the worlds Greatest Engineering Companies, a Great Bed and Breakfast and Me have in common ?

To answer I will be criticising the B&B (a little), but not before adding; fantastic food (The Whitebait was really spectacular), really friendly staff and a 24hr service to Gatwick and local rail stations and sensible prices.

The title of this post was "Breakfast and Bed - Reverse Engineering Triumph".  I will explain this but first let me point out that most (over 90%) of big buildings have exactly the same problem as this small B&B has in some form or another.  So to the explanation.

It looked rather like this
As I sat having my Full English Breakfast, I realised that I knew what the heating pipework system must look like (is it just me or does that sort of thing happen to you too ?). 

So this is where the reverse engineering comes in...

The normal approaches to energy waste

You see we commonly look at energy consumption, and tell people what they have wrong in their buildings by recognising patterns (usually working with VERY large engineering companies on behalf of their clients), we then explain the comfort and cost implications.

We also often look at what buildings have wrong and back this up with engineering theory, show the energy waste, and explain the comfort implications.

On this occasion I found myself doing the very opposite.

So this is the normal story (many of you reading this will have heard this brief story and seen the accompanying graphs from me before but the interesting part is that the engineering is reversible)

First - We show a graph where heating energy consumption is systematically higher in Spring than Autumn despite similar weather conditions (below is a pub showing 23% waste caused by making clients uncomfortable)

Pale Blue bounds different monthly average consumption (vertical) at the same average monthly temperatures (horizontal)

Then - we explain this in the context of a pub (where in the UK the economic crisis has been forcing may to close).

"As Autumn closes in temperatures fall (pun;) and clients get cold. So landlords turns up thermostats. In spring clients get hot so they open windows and leave doors open - Voila - waste as a response to discomfort. Later an observant client says `hey the doors open but the heating's on' and things return to normal (happens at around 12.5C on graph above)"

We finally conclude - Obviously this is silly ! From personal experience I have seen in in pubs, restaurants, hotels, office blocks, prisons, factories, schools (need I go on).  BUT I have never reversed engineered it !

The solution is simple - correct compensation previous post, but this is what happened to me last week and it's rather different...
I arrived on a pretty horrid delayed flight out of Basel, was picked up at the airport, and five minutes later chatted happily as I registered. I was taken to a smallish, but clean room and closed the door behind me.  I then stopped breathing !...
It was so hot I ran to the window to open it.  I then isolated the radiator in the bedroom and the one in the en-suite bathroom. But still it stayed hot.  I went and ate, and (after some beers while tidying a presentation for the next day, I returned to my room) - It was still too hot. so I slept with the window open in March in the UK ! 
The next morning I showered, went to breakfast and realised that despite TRVs (thermostats on radiators that respond to hot rooms), the entire heating system was overly hot - there was no direct compensation to weather (this is common in Europe with Germany, Scandinavia and Switzerland providing notable exceptions).
So I also knew that there was no bypass loop (to prevent unwanted hot water flowing round the whole hotel and to trigger early shut-down of the boiler) and therefore no valve mechanism to drive it.  
Given that sometimes I can't help myself, I mentioned this to the owner over breakfast (delightful chap - nice car) who proudly showed me his new heating system  
But who then confirmed that on warm mornings he tells cleaning staff to shut valves on radiators and on cold mornings he tells them the opposite!

The fundamental control system is the discomfort of guests, who regulate the rate of waste to match personal preferences !

There is a very easy fix for this hotel, and I will be returning (it is so good), so in a few weeks I hope to take a photo of the system and will provide a bit of "free advice" which if the owner is happy I will publish here.

A quick primer on direct compensation the idea behind the fix is here - but now (after my reverse engineering breakfast) I know from personal experience that the advice we have been giving is spot on !!!

Finally - What relates great engineering companies, the operator of this B&B, and the full English breakfast to a Lotus Evora ?

"A demand for excellence, coupled with determination to deliver and improve !"
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The conversational smart-meter

Automatic meter readings tie consumption to a time-stamp in a data base.

Since logged readings answer - " How much energy was used at time X ? ", 

this really cannot be considered smart (even if it does involve a pretty chart).

So what is considered smart ?

Useful services can "wrap around" energy data to begin to appear "smart". So here is a scale of increasing "smartness"

Services may;
provide a stream of interpretation or a display
-  but this can easily be listened to or ignored so call this "smart",

slightly better they may;
react conditionally to thresholds
- less likely to be ignored, but not very good without user context
 so call this "smarter",
better yet they might allow;
a user to define their context and then answer appropriately to that context
so call this "smartest", This starts to addresses the audience question of my previous post
Note : way beyond "smartest" there is also kWIQly  - but that isn't the point of this post!

An example to illustrate might be helpful (the first level is rather obvious but the others may not be):

Illustrations; Fairly dumb smart, smarter, smartest:

1) smart - a stream of data displayed...

Have you ever noticed when a clock stops ticking ?

Humans have highly developed skills to "tune-out" noise, even from their own children. 

Is this a stream of fascinating insights ? 

or perhaps it is a gripping read ?
We know anything "always on" but not threatening or vital - is soon ignored
(isn't exactly that the cause of much energy waste)

For example - do you have anything held to your fridge with a magnet ? 

If so think back to the last time you noticed what it says ?

Easy to ignore ?

"To be effective a smart-meter needs to be more compelling than a screaming kid"

Yes, perhaps that is "a big ask" but it is also a reasonable objective - so let's look again to see if this passes...

This just "screams" energy waste doesn't it !

2) smarter - interactively addressing specific questions

Now imagine a smart-meter where you can set thresholds and above the threshold an alert is sent (to a designated listener !). 

There are several SaaS companies that let you do this. However, if your use case is even remotely complex (you use more gas in winter for heating), it needs to be maintained (whether by you or the service) or it becomes worse than useless - You have configured something designed to interrupt - but it interrupts at the wrong time! 

There are also some simple ways around this (eg tracking recent mean deviations and volatility) but unless you have a good underlying model (understanding what constitutes a valid alert you will end up with a version of the boy that cried wolf - as in Aesop's fable

English: The illustration by Francis Barlow of...

English: The illustration by Francis Barlow of the fable "The Boy who Cried Wolf", 
called by him DE PASTORIS PUERO ET AGRICOLIS, 1687 (Photo credit: Wikipedia)

This is obviously a way of inspiring great music - but not so good for a smart meter.

By the way - why not do yourself a favour - 

watch this video with your children this evening 

(bookmark it if you want)

 Warning: frightening for the very young
They will love you all the more (your time inspires their growth) - it delivers a simple cool morality message - they will learn of marvellously inspiring classical music that really talks to the story and 
you can enjoy the superb animation !
Something for everyone, - as they say in US of A land : "What's not to like ? !"

    By the way if you love it - please share it !

As I was saying before I so rudely interrupted myself...

"- interrupting yourself is not always a good idea from a smart-meter"

So we move on to what we can consider the smartest - 

3) Smartest - "a user can define their context and the "smart-meter" can answer questions appropriately to that context"

When looking at smart functionality it is important to isolate different aspects of "smart".  For example the interface presented to the user may be elegant, snappy and easy to use, or ugly, slow and a nightmare (I won't show any examples here).

It might be equally be text based, numeric, iconic or graphic, but presentation issues do not determine the "smartness" of the capability. (Though the user experience or "UX" as it is known is unquestionably an extremely aspect of any product or service that aspires to frequent use).

So we do not "care" (for the purpose of this conversation) how information is represented or conveyed, we care about the underlying "intelligence". Ie what work the smart-meter can do that is "smart".  This is like saying when we choose a doctor we are more concerned by his or her training and experience than their social standing, looks, golf handicap or bedside manner (even though these may help doctors market themselves).

The most famous determination of the quality of artificial intelligence is the Turing Test from wikipedia

"The Turing test is a test of a machine's ability to exhibit intelligent behaviour equivalent to, or indistinguishable from, that of a human. In the original illustrative example, a human judge engages in natural language conversations with a human and a machine designed to generate performance indistinguishable from that of a human being."

So we might consider the "conversations" that a smart-meter could have with the user, and judge whether these convincing or not. If they are - it is smart.  

Note: kWIQly while can deliver one side of this conversation - as a pre-requisite - solutions are built on top. We also do not claim to have invented any intelligence here - merely an artificial simulation in a limited area that is constrained to asking and answering very stylized questions

I want you to imagine yourself as "user" in the following dialogue.  This starts to represent what is now possible for the smartest of smart meters.  The user represented (that is you) is assumed to be pretty well versed in energy management - it would be possible to repeat this for a much more lay-user ("who only just gets a thermostat")

User: "Please note that the following days are school holidays:"
List of holidays goes here (and is applied to all the meters in the school district)

Smart-Meter(s): "Got it"

User: "During weekends the school is closed, during holidays unless flagged the school is closed, during school-days occupancy is from 08:00 to 16:45"

Smart-Meter(s): "Got it"

User: "Gas use relates to cooking, heating and domestic hot water, comfort heating is required during occupancy and to protect fabric in school holidays under extreme weather conditions, but not at weekends"

Smart-Meter(s): "Got it" - 

Note this was all setting context and was like data entry - now it gets interesting

User: "Which school has the most individual days of holiday where consumption is more consistent with school days than holidays?"

Smart-Meter from one school : "Check this out;

User: "OK - So on days when  temperatures are in the range seen last week - 

at what time of day is most energy wasted (please band the answer by level of waste) across all schools ?"

Smart-Meters ; "You mean something like this;"

"On the most wasteful days most energy is wasted before opening"

User: "OK - I see that if the boiler capacity was lower less waste would even be possible - so how big does the heating capacity have to be for the fist school you picked out school to ensure warmth in temperatures as low as X:

Smart-meter: "Easy - that would be around 45 kW, but would require a working optimum start algorithm to bring heating on earlier on really cold days"

Closing note from kWIQly ; The above transactions are possible, but to make it readable we did style the conversation to make it "human-like"- So our client implementations typically support standardized enquiries which are triggered by button clicks etc. rather than a typed interface

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