Energy conservation and management has been around as long as humans have used energy sources. In summer months, pioneers chopped enough wood for fireplaces and cooking hearths to last all winter. Mill owners would engage in peak production when water levels were high enough to power their water-fed mills. And today in an era of climate change and expensive energy production resources, we look for new ways to manage electricity. As we move to an Internet of Things (IoT) world, we will see greater adoption of energy management solutions.

There are various types of energy management applications. All of these applications are in use today, although some have found higher levels of adoption than others.

  • Smart metering uses an end-point terminal to collect data about the use of energy for a residential or commercial location. Smart metering allows a utility customer to capture more information about utility usage over various time periods. These data can help both customer and energy supplier manage and conserve energy.
  • Prepaid metering, a type of smart metering, allows consumers to pay in advance for energy and utility services. Prepaid metering lowers the non-collectible accounts for utility companies and allows credit-challenged customers to get utility access quickly. It also helps eliminate theft of energy, particularly in emerging world countries.
  • Demand response and demand management allows a utility company to block or limit access to energy for a period of time. This blocking or limiting of access helps the utility better match its supply constraints. Often, a utility company will offer a financial incentive or other type of incentive to the customer – a consumer or business – for the right to block or limit energy consumption at various times.
  • Energy presentment, display and control provide tools for consumers and businesses to better understand energy consumption, allowing them to make and alter consumption decisions. Depending on the sophistication of the application, the customer may be able to gather information about energy usage by home/commercial appliance or aggregate energy usage information. Customer may also be able to remotely control various appliances, lighting, heating, air conditioning and other energy points.
  • Storage management is an application to manage the storage of electricity across a power grid. Management of utility capacity is critical in helping utility providers better match supply and demand of electricity. This helps manage energy resources.

Smart metering alone is a tremendously large market. According to Analysys Mason research and forecasts, by the end of 2013 there will be 54.6 million smart meter connections worldwide growing to 1.4 billion in 2023 at a compound-annual-growth-rate of 39%. See Figure 1. These include device connections in homes and businesses. We anticipate an increase over the next ten years of the percentage of smart metering in developed and emerging world countries, although the majority of growth over the next five years will be in developed countries where creation of new energy generation facilities is constrained by public perception, regulatory positions or financial constraints.

Figure 1: Smart metering device connections, worldwide, 2013-2023 [Source: Analysys Mason, 2013]

Figure 1: Smart metering device connections, worldwide, 2013-2023 [Source: Analysys Mason, 2013]

As we move from an M2M world to the Internet of Things (IoT) we will increasingly see the value of aggregating and analyzing energy usage data from various generation and distribution sites. For example, the usage data collected from various businesses around the world can be used to better understand energy efficiency from building design, lighting, heating or cooling, data center performance and manufacturing equipment usage. These findings can help improve energy management for all businesses. The aggregation and systematic use of these data is one of the M2M-to-IoT transitions we described in a prior blog post entitled Progression from M2M to the Internet of Things: an introductory blog.

We expect service providers and vendors of energy management solutions to continue to innovate and offer equipment, applications, connectivity and ancillary services. We anticipate these service providers and vendors to offer a bundle of services relevant for residential and commercial applications. We anticipate greater intelligence in end-point devices, thereby facilitating more data collection. This movement toward integrated offerings and device intelligence also signals a change from M2M to IoT.

Share your thoughts about how IoT can better enable energy management. Do you use any of these solutions in your home or business today? What would you like to see in the future?

Thanks and stay tuned for next month’s posting of my series here on Bosch´s IoT blog.

About The Author

Steve Hilton

Steve Hilton is the founder and Managing Director of MachNation, an insight services firm covering the future of the Internet of things (IoT). Prior to founding MachNation, Steve has worked as lead analyst for Analysys Mason's Enterprise research program until December 2013. He has also held senior positions at Yankee Group, Lucent Technologies, TDS and Cambridge Strategic Management Group (CSMG). Steve’s primary areas of specialization, which focus on large and small enterprises, include IoT, fixed and mobile communications services, M2M, cloud services, and sales channels. He has 20 years' experience in technology and communications marketing, with an IoT specialization for 7 years. Steve holds a degree in economics from the University of Chicago and a Master's degree in marketing from Northwestern University’s Kellogg School of Management.

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