Cleantech Meets the Cloud: The Emergence of Cleantech-as-a-Service

by Mar 11, 2015Smart Cities

Sheeraz Haji

As CEO of Cleantech Group, Sheeraz Haji drives strategy and operations. Under his leadership, CTG has built i3, the online platform where corporates meet start-ups driving innovation in a resource constrained world. Prior to joining the company, Sheeraz served for eight years as co-founder and CEO of GetActive, a venture-backed software-as-a-service, customer relationship management company. He has worked as a strategy consultant for McKinsey & Company and an entrepreneur-in-residence (EIR) for El Dorado Ventures.

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The topics in this blog will be covered through interactive and in-depth sessions at the 13th annual Cleantech Forum San Francisco from March 16-18, 2015. I invite you to join us. — Sheeraz Haji

We have observed a significant shift in energy and resource markets from centralized to distributed systems. The power sector is built around large, centralized plants that send their power through inefficient and one-way transmission and distribution lines to uninformed customers; this is a structure that dates back decades. Now, however, generation is becoming distributed, occurring anywhere and everywhere—on rooftops or via mini power plants co-located at a customer’s site. In this increasingly decentralized world, customers and energy providers would like to become much smarter in tracking energy usage, managing storage systems, and using software to interact with the grid, analyze data, and drive towards better decisions. As the power sector continues to move in this direction, other sectors are beginning to make the shift to distributed systems with similar goals in mind.

However, we are a long way from achieving an ideal world where all players are able to produce and share energy, water, and other clean resources similar to the way we create and share information online. To achieve this intelligent infrastructure where hardware meets software for the benefit of natural resources, we must bridge the gap between clean technologies and the cloud. In the physical layer, customers are installing solar power, on-site fuel cells, or micro-turbines to generate their own power but aren’t able to share it with their closest neighbors. Customers are also increasingly adding batteries to store electricity, but don’t have the means to participate in demand response, or better manage their energy consumption. We see electric vehicles on the road, but charging points are still not connected to home energy management systems and do not allow users to source and sell electricity to an interactive grid. In order for these emerging systems to communicate effectively with each other, we need to find ways to connect the physical layer with the cloud. We must develop a middle layer—and intelligent layer—of sensors, data, software, analytics, and financing instruments.

Cleantech AAS

This intelligent layer represents a massive economic opportunity across a number of different markets.

Smart home: Consumers are increasingly putting solar on their homes and managing their homes’ energy consumption with smart thermostats and other intelligent devices. They are also adding electric cars to the mix. All of a sudden a single family home has become a complex energy system, which needs a management layer to optimize energy demand. When should you charge your EV? Do you now have the ability to react to utility signals like demand response events or periods of high prices? These questions illustrate the need for a comprehensive home energy management system that pulls data from a home’s smart thermostat, smart meter, and other devices. In an ideal world, the data is aggregated across all systems, analyzed, and used to make intelligent decisions that optimize energy spend. The well-known company, Nest, has already expanded beyond its initial smart devices model to create the ‘Works with Nest’ platform, which allows the smart thermostat to “talk” to your garage, laundry machines, lights, and other devices throughout the home. In August, Samsung acquired SmartThings, another open platform that incorporates the Internet of Things into the home, and Apple has launched the HomeKit framework, which enables accessories into the home to communicate. Some players are bundling home energy services with security, patient monitoring, cable, or telecom services. Utilities, security companies, cable companies, telecom providers, and start-ups are all eyeing this emerging market.

Commercial buildings: Large building portfolio owners need more efficient lighting systems, HVACR smart systems, and security systems, in addition to comprehensive energy management solutions—and at lower costs. Significant savings can only be achieved through large scale projects and facility managers’ access to both the big picture (overall energy consumption) and individual buildings’ consumption. Sensor networks have become a part of many different networks, and are used to collect the data analyzed through different platforms. These sensors act as a bridge between large physical assets and the cloud, allowing facility managers to monitor their portfolios’ energy consumption in a comprehensive manner through the cloud. For example, Enlighted—a light controls and energy management system—uses smart sensors to provide its customers with significant savings. Building Robotics, a company offering energy efficiency as a service by enabling building occupants to manage heating and cooling through an app, raised a round of funding in October.

Data centers: The footprint of data centers increases daily, especially in energy consumption and GHG emissions. Data centers’ architects are exploring the use of distributed clean energy systems, but progress is still ongoing in understanding how to unlock this opportunity. Indeed, if these operators consider using multiple distributed energy generation systems to lower energy costs and decrease the risk of a grid outage, how can this be done in the most efficient, integrated, and connected way? Opportunities exist for data centers to use demand response, frequency regulation, and peak shaving as ancillary services sold to utilities. However, in order to do that, we must work on further connecting all the energy systems at hand—batteries, fuel cells, and microturbines to name a few—to the grid. Bloom Energy is developing solutions that power data centers with fuel cell technology. Demand Energy provides data centers a cloud-based platform that centralizes and integrates all functions needed to aggregate and manage distributed energy storage resources independently of location, capacity, or ownership.

Smart grid and storage: Utilities are under pressure as demand grows for energy and water supplied in a manner that won’t undermine environment quality. Regulators seek action on smart grid and smart metering initiatives, while customers want choice and convenience at no additional cost. As utilities engage in clean advanced energy services, they continue to face the risk of grid outages. Energy storage technologies, fighting their way to the utility market, are an essential part of this battle towards a self-healing grid. Combined with digital components and real-time communications technologies installed throughout the grid, these technologies can help to immediately isolate problems as they occur, before cascading into major blackouts. Upgrading the grid infrastructure for self-healing capabilities requires the replacement of traditional analog technologies with digital components, software processors, and power electronics technologies to create a digitally-controlled system. Stem, with its Storage-as-a-Service type business model, is currently working with utility Hawaiian Electric on a 1MW distributed grid energy storage pilot project to help stabilize the grid, which has been facing disruptions from the increasing integration of rooftop solar power. Making the grid more reliable and predictable is also what company Space-Time Insight is trying to achieve with its situational intelligence applications, helping utilities to make more informed decisions using real-time visual analytics software to provide insight from big data.

Ag & Food: Farmers everywhere are facing water scarcity, rising demand, competition for land, and environmental concerns. They have more sophisticated machines, and bigger properties and orders. But to unlock the full potential of such physical assets, they need intelligence. The cloud enables farmers to maximize the returns on every piece of land they own, thus increasing use and profitability, and making more with less resources. Optimization technologies and services give farmers access to historical data (e.g. weather, past yields, water use) providing benchmarks in relation to similar farms and their day-field management. Apps can monitor and analyze reports, big data can deliver optimization recommendations, and imaging technologies can enable them to view their fields and identify resource stresses. For example, a new start-up, PowWow Energy, uses data taken from smart meters to detect leaks in irrigation systems, thus saving resources and cutting costs for growers. In the future, can we expect to see this data connected to grocery stores to dramatically reduce food waste?

Digital oilfield: It is becoming increasingly difficult to find and extract oil from the ground. What’s more, the energy demand is booming at a fast pace. Seismic software, data management and visualization, and the new generation of pervasive computing devices open new possibilities and address the oil & gas industry’s safety, monitoring, sensing, and tracking needs. The digital oilfield is leading to more effective energy production, more accurate pipeline monitoring and early leak detection, and real-time well monitoring—among other advancements. Multinational oil and gas corporations are now able to monitor oilfields on a global scale via the cloud. Companies like drillMap help oil and gas players to make data-driven decisions by processing huge amounts of data from different sources and providing a user-friendly data analytics platform. New companies like Tachyus, are developing solutions to optimize energy production and provide an end-to-end solution for their customers. Other start-ups are leveraging visual analytics software to provide pipeline monitoring, risk monitoring, crisis mitigation, and more. Big corporates like Shell and Chevron, among others, are quickly adopting these technologies, making the jump to the digital oilfield as we continue to see the substantial benefits of this new cloud-connected mode of operations.

Water and wastewater: On one side, water utilities are operating in the same fashion that they have been doing for decades, using the same centralized aging distribution networks. On the other side, global domestic and industrial demand for water is growing, wastewater treatment needs are booming, and the map of water scarcity has evolved unexpectedly, pushing utilities to address peak demands in traditionally less vulnerable regions. How can supply and demand be fine-tuned efficiently? Technologies like remote sensing, analytics, water distribution network monitoring, smart meters, and software can address water and supply demand, while ideas around water microgrids are emerging. More and more companies are trying to solve this connectivity problem: WaterSmart—a cloud-based analytics and customer engagement platform for water utilities—is an example of a company focusing on behavioral analytics. Another start-up in the water industry—TaKaDu—provides a web-based monitoring platform for water distribution networks, improving the overall efficiency of distribution networks. Geosyntec—a consulting firm for water players—has produced a report on software and control technologies that optimize storm water surges that can overflow urban sewer systems.

Solar: Solar power is a long-term investment in sustainable energy production, as its economic benefits have not been yet been fully unlocked. For users and servicing companies to see these benefits maximized, they need an easy way to monitor the components in their solar power systems, as well as in their energy production and consumption. Companies like GeoStellar and Clean Power Research are developing software and analytic tools for more efficient optimization of downstream solar installations. The cloud has enabled these changes, as it continues to be the key to connecting and integrating new sources of energy. Beyond software-based monitoring of solar power, when will solar technologies enable residents or commercial buildings to buy and sell electricity produced from their rooftops or their neighbors’, recharge their electric cars from their own microgrids, use data to efficiently manage consumption and share it with utilities, and resell energy surplus to remote areas where demand is peaking? Once again we see that progress has to be made to connect hardware and software, and allow for a more flexible use of the solar energy resource.

Transportation: Within the transportation sector, seats and parking spots represent crucial resources to users. The rising cost of living, coupled with an increasing number of cars and worsening traffic congestion in cities, call for solutions to leverage idle resources (i.e., under-utilized car seats, idle cars, and hidden parking spots). The cloud enables the leveraging of these resources, making them available at a larger scale, and transforming the transportation industry with modular platforms, allowing for increasingly flexible supply and demand. Companies like Uber, Lyft, BlaBlaCar, and other mobile and online-based apps are inundating the private taxi and car-sharing markets. Daimler’s subsidiary moovel acquired RideScout and myTaxi to continue the development of its abilities in urban mobility. Fleet management is also becoming more effective, as start-ups like Local Motion provide systems that better integrate user data with overall management of fleets to lower costs. Tesla has fundamentally changed the EV market, which has in turn led to more innovation around charging stations. Chargepoint and Schneider Electric have collaborated to create EVlink, a network of cloud-connected charging stations that gives EV drivers and charging station owners more comprehensive services.


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