Interpreting Google’s purchase of Nest

Were you surprised to hear of Google’s acquisition of Nest? Probably not; nor was I. Google has long been interested in energy monitoring technologies and the effect that access to energy information can have on individual consumption decisions. In 2009 they introduced Power Meter, which was an energy monitoring and visualization tool; I wrote about it a few times, including it on my list of devices for creating intelligence at the edge of the electric power network. Google discontinued it in 2011 (and I think Martin LaMonica is right that its demise showed the difficulty of competition and innovation in residential retail electricity), but it pointed the way toward transactive energy and what we have come to know as the Internet of things.

In his usual trenchant manner, Alexis Madrigal at the Atlantic gets at what I think is the real value opportunity that Google sees in Nest: automation and machine-to-machine communication to carry out our desires. He couches it in terms of robotics:

Nest always thought of itself as a robotics company; the robot is just hidden inside this sleek Appleish case.

Look at who the company brought in as its VP of technology: Yoky Matsuoka, a roboticist and artificial intelligence expert from the University of Washington.

In an interview I did with her in 2012, Matsuoka explained why that made sense. She saw Nest positioned right in a place where it could help machine and human intelligence work together: “The intersection of neuroscience and robotics is about how the human brain learns to do things and how machine learning comes in to augment that.”

I agree that it is an acquisition to expand their capabilities to do distributed sensing and automation. Thus far Nest’s concept of sensing has been behavioral — when do you use your space and how do you use it — and not transactive. Perhaps that can be a next step.

The Economist also writes this week about the acquisition, and compares Google’s acquisitions and evolution to GE’s in the 20th century. The Economist article touches on the three most important aspects of this acquisition: the robotics that Alexis analyzed, the data generated and accessible to Google for advertising purposes, and the design talent at Nest to contribute to the growing interest in the Internet-of-things technologies that make the connected home increasingly feasible and attractive to consumers (and that some of us have been waiting, and waiting, and waiting to see develop):

Packed with sensors and software that can, say, detect that the house is empty and turn down the heating, Nest’s connected thermostats generate plenty of data, which the firm captures. Tony Fadell, Nest’s boss, has often talked about how Nest is well-positioned to profit from “the internet of things”—a world in which all kinds of devices use a combination of software, sensors and wireless connectivity to talk to their owners and one another.

Other big technology firms are also joining the battle to dominate the connected home. This month Samsung announced a new smart-home computing platform that will let people control washing machines, televisions and other devices it makes from a single app. Microsoft, Apple and Amazon were also tipped to take a lead there, but Google was until now seen as something of a laggard. “I don’t think Google realised how fast the internet of things would develop,” says Tim Bajarin of Creative Strategies, a consultancy.

Buying Nest will allow it to leapfrog much of the opposition. It also brings Google some stellar talent. Mr Fadell, who led the team that created the iPod while at Apple, has a knack for breathing new life into stale products. His skills and those of fellow Apple alumni at Nest could be helpful in other Google hardware businesses, such as Motorola Mobility.

Are we finally about to enter a period of energy consumption automation and transactive energy? This acquisition is a step in that direction.

Ford’s MyEnergi Lifestyle

Lynne Kiesling

You may know that the annual Consumer Electronics Show has been going on this week in Las Vegas (CES2013). CES is the venue for displaying the latest, greatest, wonderful electronic gadgets that will enrich your life, improve your productivity, reduce your stress, and make your breath minty fresh.

And, increasingly, ways to save energy and reduce energy waste. The most ambitious proposition to come out of CES2013 is Ford’s MyEnergi Lifestyle, as described in a Wired magazine article from the show:

Here at CES 2013, the automaker announced MyEnergi Lifestyle, a sweeping collaboration with appliance giant Whirlpool, smart-meter supplier Infineon, Internet-connected thermostat company Nest Labs and, for a green-energy slant, solar-tech provider SunPower. The goal is to help people understand how the “time-flexible” EV charging model can more cheaply power home appliances, and how combining an EV, connected appliances and the data they generate can help them better manage their energy consumption and avoid paying for power at high rates. …

Appliances are getting smarter, too. Some of the most power-hungry appliances, such as a water heater and the ice maker in your freezer, can now schedule their most energy-intensive activities at night. Nest’s Internet-connected thermostat can help homeowners save energy while their [sic] away. While some of the appliances and devices within MyEnergi Lifestyle launch early this year, others are available now, Tinskey said.

One reason why I think this initiative is promising is its involvement of Whirlpool and Nest, two very different companies that are both focused on ways to combine digital technology and elegant design to make energy efficiency in the home appealing, attractive, and easy to implement.

The value proposition is largely a cloud-based data one — gather data on the electricity use in the home in real time, program in some consumer-focused triggers, such as price thresholds, and manage the electricity use in the home with the objective of minimizing cost and emissions. Gee, I think I’ve heard that one here before

Oregon Scientific’s elegant in-home energy monitor

Lynne Kiesling

The Consumer Electronics Show has started, and we device and gadget geeks are having fun! One thing I noticed quickly is in this Engadget post about Oregon Scientific’s new device offerings:

Look at the device on the far right — it’s a wireless appliance manager “to help users keep an eye on how much energy up to eight appliances are using”. Look at how elegant it is! Clean, simple interface, shows the energy costs by appliance and a total energy cost for all of them, boom, done. It would probably not require much programming to make it transactive, so that the homeowner could choose trigger prices by appliance to make the appliances themselves price responsive.

That’s what I’m talking about when I effuse about the potential for in-home energy management technology. Clean, elegant design, transactive (or, in this case, potentially transactive) functionality.

It’s early in the CES; there’s more of this to come.

A big day for Google 2: Power Meter and TED!

Lynne Kiesling

Google is ringing both of my dominant bells today. Today they announced their first official device partner for the Power Meter — TED 5000 (TED = The Energy Detective). Power Meter + TED = ability for homeowners to monitor their own electricity consumption, regardless of whether they have a digital meter, retail product choice, or any other hallmarks of competitive retail markets.

This is good. Very good. But it’s not enough. Why not?  Because the potential exists for so much more. Power Meter + TED could = transactive capability, with price-responsive devices and retail products and services that send dynamic prices to consumers, inducing them to program their devices. And I believe this will happen, and hope that Power Meter + TED = camel’s nose under the tent for true consumer choice and empowerment.

Martin LaMonica at CNet is also a worthwhile read on this announcement.

7 individual energy management iPhone apps

Lynne Kiesling

I’ve had several conversations with people my age and younger who work in the electricity end-use technology space in which we use a particular shorthand for the change in culture and mindset that we want to see happen in the retail electricity industry: “there’s an app for that.” In our conversations it’s shorthand for frustration and exasperation with the utility-centric, hierarchical control, non-consumer oriented retail electricity industry as it currently exists, and how far that traditional mindset and culture is from the potential that exists with highly distributed, mobile, and even transactive end-use technology. We are working to move the industry toward more of a consumer-oriented, “there’s an app for that” culture and level of consumer value-creating innovation.

It’s starting. Katie Fehrenbacher at Earth2Tech points out 7 different individual energy management iPhone apps. Some are from companies that are familiar to KP readers, such as Tendril and Ecobee. Some require manual data entry, which is time consuming and probably not very interesting unless you are a total energy geek. In fact, she cites the idea that these are apps ahead of their time:

Energy management tools designed to help you curb unnecessary power used in your home have yet to break into the mainstream, and only 13 percent of people say they would want to manage home energy consumption via a mobile device, according to Clint Wheelock of Pike Research (via GigaOM Pro subscription required). But hey, who needs a market for this stuff, when energy management startups can build a slick iPhone app on the cheap and use the mobile version as marketing for their main products.

Technology at the edge is there, and developing it gets cheaper and cheaper.

Smart grid policy heats up

Lynne Kiesling

Smart grid policy and activity continue to heat up … I will be attending the NIST-EPRI Smart Grid Interoperability Standards Interim Roadmap Workshop Tuesday and Wednesday in DC, and will be co-chair of a track of sessions on business and policy. The focus of the meeting is “high-level principles” for developing smart grid interoperability standards, and part of my objective is to ensure that in discussing those principles, we maintain our focus on the potential value creation from the transactive capabilities and functionality of an intelligent, information-rich electric power network. Furthermore, we will not realize that value unless we have regulatory institutions and policies that enable us to achieve decentralized coordination instead of imposing centralized control on us.

This is probably a good point to insert links to my 5-part smart grid series from a few weeks ago:

And I’m not alone in focusing on smart grid; NPR has started a 10-part series called Power Hungry: Reinventing the U.S. Power Grid. Today they aired the first in the series, in which they discussed the aging electro-mechanical infrastructure, and how the absence of digital communication capabilities limits the value of and potential for renewable energy. It was a good overview, but I will be listening to the ensuing 9 parts with great interest to see if they really do highlight the important potential for consumer value creation and decentralized coordination that comes from the transactive capabilities of smart grid technologies and policies. In fact, one of the commenters on the page of the first part of the series stated that

The “smart grid” is all about control – of those who want to use electricity. Those computer cables that “are being laid right next to the power line” will allow someone in a control station to decide who and what gets power, by sending a signal to the devices in your house or business that use electricity (and maybe, eventually, gas, as well).

That’s only true if you view smart grid as an extension of the existing regulated utility business model. I argue for another vision — smart grid technology is, to use the business jargon, a transformative game changer that can move us away from the old control model and into a coordination model. But the technology can’t do that by itself — achieving this information-rich, value-rich coordination outcome requires regulatory change, especially enabling dynamic pricing, but also opening minds up to the feasibility and value of retail choice and retail competition.

Other smart grid-related stories that have caught my attention recently:

  • Verizon will add energy management functionality to its FIOS fiber-optic network service offerings. This is a great example of the type of innovative product and service bundling that I envision if our regulatory institutions allowed for more retail competition. And, obviously, if consumers can choose dynamic pricing, Verizon’s router would enable making their thermostats, window blinds, etc. transactive.
  • California utilities plug energy-efficient electronics. But, you know what? Consumers would be much more interested in energy-efficient electronics without the utility having to persuade them if consumers faced dynamic pricing. I encourage regulators to stop just treating energy efficiency “programs” as activities to pay the utility for doing, but instead to reduce the barriers facing retail utilities that prevent them from offering dynamic pricing in a menu of retail contracts. Then consumers make the choices instead of paying through their rates for their utility to inveigh them to buy more energy-efficient appliances and devices.