Wednesday, September 16, 2009

Google PowerMeter accidentally wipes out small industry on the way to changing the world??

I spent the last few days at the Autovation conference in Denver, which is focused on Smart Metering and the Smart Grid, an area that I am becoming increasingly interested in and one where Enspiria is doing a lot of work (where I work part time as Chief Technology Advisor). It was a very interesting conference - there is certainly lots of activity and energy in the space, especially since the stimulus bill committed $4.3bn to Smart Grid projects - and utilities need to match this funding, so close to $9bn will be spent over the next couple of years. That's a large enough sum to even interest the likes of Google and Microsoft in electric utility applications, something they haven't been into previously.

So it was interesting that the closing speaker at the conference was Ed Hu from Google (who is incidentally a former astronaut, who has spent six months on the space station!). He is responsible for their PowerMeter initiative. This was announced earlier this year and I had previously skimmed articles on it, but have to admit that I hadn't grasped the full significance of it until Ed's talk yesterday. You can see a short description of what it's all about in this one minute video:

In summary, it lets you see detailed information about your home's power consumption, enabling you to change your behavior to reduce consumption. Ed draws an analogy with the fuel consumption readout in a Toyota Prius, which encourages you to modify your driving style to maximize your fuel consumption (I can vouch for this). He says that in their trials so far, people using PowerMeter have typically got anywhere from 5-15% savings on their electricity bill. As I talked about in my previous Smart Grid video, one reason for having smart meters is to enable customers to have access to this type of information, in order to encourage them to change their behavior and reduce electricity consumption. This has various benefits including reduction in carbon emissions. Usage data for Google PowerMeter can be obtained either via your local utility, if they have installed smart meters and choose to offer the Google service (which requires them to interface their Meter Data Management System, MDMS, to Google), or alternatively you will be able to buy devices to install in your home and read consumption directly. Ed said that if they could get the same level of usage reductions as they got in their pilot, from 6 million users, this would be equivalent to the reduction in carbon emissions due to all the hybrid cars currently on the road.

This initiative is being run by, the philanthropic arm of Google, and the system is offered free to both consumers and utilities (and will continue to be free, Ed said). He also said that he'd been told personally by the CEO of Google, Eric Schmidt, that the aim of the project was "to change the world".

I'm excited in many ways to see Google getting involved - certainly they understand how to build applications to engage consumers, and this is not something that electric utilities generally have expertise in. And having Google involved certainly could significantly accelerate the development of this aspect of the Smart Grid. However, it's potentially very disruptive for a number of existing companies in this space, who are trying to do much the same thing. Companies like Greenbox and Tendril seem to have strong overlap with what Google is doing here. In this story at earth2tech shortly after the initial announcement of PowerMeter, both try to put a somewhat positive spin on Google getting involved in the space, but it will be hard for them or others to compete with the core Google offering, especially since it is going to be free. Perhaps they can find niches that are complementary to what Google is doing, but they and other companies in this space seem in a somewhat precarious position to me.

The one other player in this space that I haven't mentioned, who are probably in a stronger position to compete with Google, is Microsoft, who have a relatively similar offering called Microsoft Hohm. Earth2tech compares the two. They say that Microsoft intends to charge utilities for their offering eventually - and also says that Microsoft intends to move into the space of controlling devices too. Someone at Autovation asked Ed if Google was planning to move into control of devices too, in addition to the data display they are doing now, and he indicated that this was very likely - though he said they wanted to focus on getting the display part right first. While he wasn't specific, if they did provide the ability to control devices for the consumer it is a logical step to provide that to the utility too, which gets them into the whole market area called Demand Response, potentially overlapping even more with existing companies.

After seeing all the disruption that Google and Microsoft have brought to the geospatial industry, it is interesting to see them moving aggressively into the consumer-related aspects of the Smart Grid. Google providing completely free enterprise solutions through its philanthropic arm is in some ways commendable and in other ways concerning (in terms of the ability of others to provide competition, and the risk that they could just wipe out multiple companies). One of the most common questions web entrepreneurs get asked when presenting to investors is "what if Google decides to do what you're doing?", and it seems as though people will need to be asking that question of companies in ever more diverse fields! It will be very interesting to see how all this develops over the next year or two, and how the existing companies in the space respond.


Kirk said...

Maybe some day when the dust from Enron settles, and TOU billing becomes widespread, Google will allow us to click on ads placed by electricity generators.

Tartley said...

Thanks for the info, but wow, I'm disappointed by the '5-15%' figure, especially since that is bill reduction, not energy usage reduction.

I would have expected that the savings would be much larger from that. I imagined going from 'not monitoring electricity usage at all' (because really, do people do that? I don't, but perhaps that's just me) to 'getting a detailed graph of usage', which lets you plan to move things like dryer usage into night-time cheap electricity usage periods. I would have expected a 50% bill reduction. Oh well.