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M2M in the home energy market: A major opportunity for high-quality systems

What have Hive, Nest and Tado all got in common? Answer: they are all active in wireless home heating controls, targeting one of the most active areas for consumer machine to machine (M2M) technology. Hive, owned by energy giant British Gas, the Google subsidiary, Nest Labs, and German firm Tado have produced smart thermostat systems to simplify the process of running home central heating from anywhere. Functions include; automatic response to weather patterns, firing up the heating from a location app when a resident is heading home, and learning from a householder's manual tweaks to replicate them automatically.

According to Vodafone's latest M2M barometer report, 20 per cent of utilities and energy firms have now adopted smart grid and smart metering systems, and 17 per cent have also introduced smart home and office offerings — a category that includes home automation, intelligent heating, and connected security systems.

Read more: Cutting through the chatter: Applying connectivity data across the whole enterprise

Consumer-based equipment such as smart meters and internet-controlled heating controls will be rolled out to possibly hundreds of millions of homes to help save energy and give people smarter options for managing their lifestyles.

For energy suppliers, empowering users to keep on top of their consumption using smart, connected devices will become a differentiator in a largely commodity-based utilities market, and in turn can provide suppliers with a potential goldmine of marketing, customer data, operational opportunities and substantial revenues.

And for society the potential prize is huge in terms of cutting and controlling energy consumption. British Gas estimates, for example, that as many as 7.8 million homes are being heated every year in the UK while no one is at home. In the US, Nest's Learning Thermostat is already giving users savings of 20 per cent on average on heating and cooling bills, a figure that will be compelling in the UK market, where energy prices have zoomed upwards in recent years.

But like other areas in the new world of the internet of things (IoT), there are various disruptive technological and regulatory hurdles that carry risk for utilities entering the market. Should the security of the system be breached or should the installation fail to fulfil claims of its performance then consumers may lose trust. To add pressure, suppliers will have regulators and governments breathing down their necks as demands for energy savings take hold.

As Adrian Tuck, vice chairman of the ZigBee Alliance, which develop M2M standards, says: "I believe we are about to go through a revolution in the energy space every bit as big as the telecoms revolution."

Smart meters, smart approach

As well as smart home devices, a powerful spur to M2M growth in the energy sector is coming from the rollout of smart energy meters. The sheer size of the program, from the immense installation task through to the meter's operation, carries huge potential for positive or negative impact on consumer acceptance. In the UK, replacing 53 million conventional domestic power and gas meters in about 30 million premises by 2020 will be Britain's biggest home energy technology change for more than 40 years.

A smart decision has been made in the UK, as a licence to manage the communications infrastructure for the smart metering implementation program has been granted to a special company, the Data and Communications Company (DCC). But there is trepidation within the energy industry. For example, as Neil Pennington, smart program director at energy firm RWE npower, said recently at an industry seminar: "Testing must be robust – end-to-end across industry parties and the DCC, and in live situations. If interoperability is not consistent and systems and processes not failsafe, it risks undermining consumer confidence."

Read more: A closer look at the Internet of Things: A new industrial revolution

The imperative to test rigorously is clear. Large energy suppliers must be ready for DCC interface testing in autumn 2015. They have huge rollout profiles that will run to installing tens of thousands of meters a week.

Quality in the mix

Arguably installation will be the first "big data" challenge in the smart metering programme. The task will involve upgrades in information technology including changes in enterprise resource planning (ERP) systems, asset management, job scheduling and handheld devices.

Then interfaces and back-end systems will have to be tested to ensure they can handle the accelerating load as it increases through rollout. Much complex integration and operation acceptance testing will be required and will need careful management, not least in ease of use for consumers.

Software quality is now playing an increasingly important role, and the sheer pace of change in the energy sector puts such quality into sharp relief. For companies facing such major and looming deadlines, testing cannot be done late in a project lifecycle as it may well be too late to address defects cost effectively.

The importance of assured performance and usability in connected devices to the development of the energy industry is a responsibility that the industry is keenly sensitive to. The IoT offers energy firms an opportunity to better connect with its customers.

For the energy sector, confidence in smart, connected technology will be the fuel it needs to achieve, and benefit from, the pace of change the market will surely demand.

Angus Panton is director of power and communications at SQS GroupPorthole Ad