The generation game: How two IoT startups are changing the UK’s energy...
IoT in energy

The generation game: How two IoT startups are changing the UK’s energy consumption habits

There are two engineering challenges – one electrical, one social – facing power companies if they want the public to change their energy consumption habits. The latter might be the harder business nut to crack, reports Nick Booth, but two IoT startups are here to help.

In the near future, Britain’s businesses will face a power struggle, the gravity of which depends on which organisations you listen to. The Institution of Mechanical Engineers (IMechE) recently predicted that demand for electricity could soon outstrip supply by 55 percent, in less time than it takes to get planning permission for a nuclear power station.

The UK and other nations face galloping consumption rates as more and more devices enter the home and office. If not properly managed, peak-time electricity demand could grow by almost 1GW a year after 2030, according to the National Grid’s annual Future Energy Scenarios report.

The good news is that there are technical solutions. The bad news is that there are business and social barriers to be hurdled first. In short, the nation has to be persuaded to change its power-consumption habits, and that isn’t going to be easy.

Heavy industrial power-consumers are sometimes offered cash incentives to shift consumption from peak times. For example, Tesco Stores Ltd is currently participating in a project, funded by Innovate UK, to cut the electricity consumption of its cold chain.

However, the masses of small to medium-sized businesses (SMBs) and home consumers far outweigh the giants in terms of power usage. But how to address and incentivise them? On the face of it, they are too small to tackle with individual incentive schemes, but too large to ignore collectively.

This is the question being explored by two Internet of Things (IoT) startups, Upside Energy and Gengame.

The virtual behemoth

Graham Oakes, Upside Energy founder and chief scientist

Upside Energy’s strategy is to use software agents to aggregate the power storage capacity of all participating SMBs into a single, virtual giant, which is big enough to qualify for rewards. The company then uses IoT systems to monitor the exact contribution of each individual and manage the distribution of rewards accordingly.

Currently, its best reference sites are owned by Arqiva, which runs the broadcast towers for organisations such as the BBC. Each Arqiva site typically uses 50-200KW of power, which makes it comparable to a small office building.

“We’re doing this at a scale that makes sense for small businesses as well as large corporates,” explains Upside Energy founder and chief scientist, Graham Oakes.

“We are now using the backup power systems on some of these towers to help the grid balance supply and demand for electricity. This helps companies like Arqiva and in turn, the BBC, to cut their energy bills and their environmental impacts.”

Upside’s Pete Project – a partnership with the Eden Project, Oxford University, PowerVault, and Mixergy – is now taking the model to household consumers.

“Traditionally, what we’re doing has only been available to pretty large organisations. We help them, but we’re doing it in way that also extends down to small businesses and households. So we’re opening up the market for everyone,” says Oakes.

Upside currently has almost 30MW of power under management – equivalent to about 30,000 homes.

The generation game

Meanwhile, the challenge that Gengame is meeting is even trickier: changing the psychology of the consumer. Machines are difficult enough to manage, but humans are even more complex, and are protected by all kinds of regulations. This presented founder Stephane Lee-Favier with problems he had never encountered before.

Lee-Favier studied engineering at Oxford and then worked at Rolls Royce in its energy division for a decade. But while he understood how to use technology to solve energy problems, he found that the human population is less easy to fine-tune than it is to create fuel cells or make electricity out of natural gas.

So he invested large chunks of money and his life studying for an MBA at the prestigious INSEAD business school in France. While the qualification alone doesn’t make him a problem solver, it can be seen as a sort of human communications protocol that opens up access to some of the finest information resources in the world.

Having seen his face and shaken his hand, suddenly the elite of the business world would accept his Skype invitations, return his phonecalls, and answer his emails.

It’s painfully expensive to do an MBA at that level, but “it’s the experience that’s the revelation,” explains Lee-Favier. “You have your eyes opened to so much and you meet so many cool people.”

He solved another business problem by winning a grant from Sainsbury Management Fellows, which made a £50,000 dent in his opportunity costs.

At INSEAD, Lee-Favier learned to complement his ability to create technical solutions with his new knowledge of business strategy. The first contract he won exemplified this: he is using his newly acquired understanding of gamification techniques and behavioural psychology to help reduce the burden on the Northern Power Grid.

Gengame is achieving this by targeting the most addressable section of the human population – youths – and creating a system based on their needs.

Young people carry mobile devices and crave constant excitement, not to mention money. So Gengame has designed a system that taps into these distinct energies and directs them in order to help its client, Ecotricity, alleviate the strain on the national grid in the Northeast of England.

The application is brilliant in its simplicity. Young people are told they can win big prizes. In order to start doing this, all they have to do is charge their mobile and other devices at night. This involves a simple two-step process: download an app onto their mobile phone, then clip a device to the mains electricity in their house, just at the point where it runs into the meter.

The widget can measure exactly how much electricity is passing through the cable, and when. It reports this information back to Ecotricity, via the user’s mobile phone. So the company knows exactly who among their subscribers is obeying their request to run machines, dishwashers, and mobile phone chargers overnight and can reward them accordingly.

The top prize is worth several thousand pounds in cash. In this way, Gengame has created an effective power-management scheme which motivates the punters with big rewards for minimal effort, and in the meantime changes their daily habits.

Internet of Business says

The electrical engineering achievements are impressive, but the social engineering one even more so – a lesson for us all that technology is only part of the solution when it comes to changing people’s bad habits.