Theme energy: The world of IoT comes home

VTT arranged the “Growth from the energy transition” seminar in Helsinki on 13 September 2016. During the event, VTT’s extensive know-how in the energy sector – the related research findings, scenarios and visions – was showcased. Together with our partners, we also pondered the energy revolution and growth prospects in Finland. The seminar themes are explored in more detail in our energy-themed blog series.

A wide range of visions have been presented and produced on the future of energy consumption in homes. One of the most familiar is the idea of the energy-flexible home. In addition, houses can be energy self-sufficient or, where appropriate, even generate energy for others.

The new technologies currently being tried and tested will provide the consumers of the future with the opportunity to consider various new, alternative types of energy production. As an example, let’s take the illustration in the picture of how a home of the future, with printed and energy-sensitive surfaces, might look. The wall surfaces and decorations could be energy-generating, in accordance with the situation. A table cloth, wall decoration, wallpaper or a computer’s surface could generate energy from ambient light. According to this vision, the design of living environments built around incoming light will gain a stronger foothold.

tuikka_futurehome

Future home.

In addition to gathering ambient energy, such a home could be smart and gather information on its surroundings and its own functions, communicating such information to cloud services or other devices. In this case, part of a home or office could be the subject of negotiated flexibility based on an agreed electricity contract, within the limits of the operational possibilities. The flexible use of energy is therefore dependent upon a definition according to the situation in question.

Consumer information and new services

In addition to energy systems, domestic appliances could ‘tell’ other devices about their own situation and ‘converse’ with each other. At the moment, it looks as though a platform economy is forming in which the so-called Internet of Things has a huge number and variety of actors at different levels. All manufacturers of home appliances and consumer electronics, and makers of sauna stoves or electricity meter readers, seem to be reaching out to consumers. Consumer information and its combination with other data appears to be the key to the new services. The impact of flexible energy consumption could be difficult to calculate in the absence of connected-up data. The greatest potential is thought to lie in the change in business models and new business opportunities. A wide range of estimates have also been made on the sums of money that the forthcoming IoT and platforms will involve worldwide.

Despite the great difficulty in estimating these sums, the change can be viewed as an opportunity in general. To ensure business continuity, it is important to identify the elements involved in such change. Legislation and various initiatives, technological transitions and standards will have an impact on activities in the long term.

For example, legislation can be used to define certain data as important to society and to rule that it must be open by law. What would the impact on business activities be if data generated by energy meters was defined as important to society and therefore open? This would avoid a closed system and data could be combined with other data, creating added value. There would undoubtedly be a major impact on business. Such situations are familiar in another context. Services related to payment services, in particular, are changing. The new Payment Services Directive will oblige banks to open up their own databases to third parties. External service vendors will gain access to a bank’s payment transactions. On behalf of customers, service vendors will be able to manage payments mainly online and through mobile channels. In fact, payments concern all services and both banks and other actors are now being consulted on the services to which payments can be connected. It is quite possible that this change will also cover energy solutions.

The role of the consumer is highlighted in the digital society. Consumers are interested in data related to their own activities and are becoming more interested in data and activities defined just for them. Digitalisation brings the service vendor closer to the consumer – the better digital services serve the consumer, the more certain it is that they will be used. Based on an integrated picture of household consumption and production, digital services can increasingly free consumers from vendor dependency. From the consumer’s perspective, the more flexibly and easily services work, the more attractive they are. Easy and clear switching between power supply agreements, comparison of terms and conditions, and integration of financial transactions with other services are already increasing consumer awareness of the alternatives and mobility on the energy markets.

To whom does data belong?

The transition will be based on a range of factors – such as regulations – and their combinations. To whom does data created by the internet, lamps, sauna stoves or televisions in households belong? This subject is so important that the European Commission has drawn attention to the matter by considering the rights to data within business chains. Another similar, but further advanced, regulation is the General Data Protection Regulation or the GDPR, which will define people’s right to their own data when it enters into force in 2018.

Secondly, standards are important when wondering what kinds of data communication layers to create. There are a number of initiatives and VTT is involved in several standards organisations and ventures. Thirdly, the technological revolution is unlikely to happen in isolation, but will require a suitable setting within the business environment. Although block chain technology is a new technical term, the passion surrounding it seems to have spread beyond the IT community. The term becomes more familiar when associated with the concept of virtual money and the word ‘bitcoin’. In this case, the interesting thing is that no single operator has centralised control over the data.  It is said that transparency and decentralization make this approach trustworthy. Examples are merely illustrative right now, but a moment may arrive when an electrical device can securely report energy quantities to a block chain.  The vision could consist of IoT devices making agreements with each other and engaging in regulated commerce in situations involving energy flexibility.

Tuomo Tuikka, Research Manager
Twitter: @tttuomo

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