.
WSJ

Google, Amazon Seek Foothold in Electricity as Home Automation Grows

lunes, 4 de febrero de 2019

WSJ

Alphabet, Google and Amazon.com Inc. AMZN -4.54% are taking early steps to expand into the electricity business, as home-energy automation emerges as a rich new source of customer data.

The technology giants aren’t interested in selling megawatts-at least not for now. But they are seeking ways to expand their smart speakers, internet-connected thermostats and other devices to harness information on consumers’ personal energy use. That data holds great power; it can be used to manage energy demand by incentivizing consumers to use less electricity during peak hours.

While the energy ambitions of tech companies are currently limited, some executives anticipate a future where solar panels, battery storage and even electric vehicles all become part of a smart-home ecosystem. Under that scenario, any company that controls the software and systems that deliver energy could gain a formidable market position, according to executives and consultants.

“In 10 or 20 years, the dominant retail electric provider in the United States is going to be Amazon or Google,” said David Crane, the former chief executive of NRG Energy Inc., who said he isn’t involved in discussions with the companies. “They can provide lower cost and better service.”

Home-energy management is a battleground in a competition between Google and Amazon for internet-connected devices that has intensified in recent years after both companies saw smart speakers take off in popularity. Google bought Nest Labs, a maker of home-security cameras and thermostats, for $3.2 billion in 2014. Last year, Amazon bought Ring, a maker of video doorbells, in a deal valued at more than $1 billion. In March, Amazon joined a $61 million investment funding round into smart thermostat maker ecobee Inc.

Consulting firm Wood Mackenzie estimated that spending on home-energy devices exceeded $40 billion in 2018 and is set to double in the next five years.

Google, in a push for wider adoption of its connected devices, has struck partnerships with utilities and power providers in the U.K. and the Netherlands, as well as in Illinois, California and Texas. Google has a deal with Reliant Energy, a Texas electricity provider owned by NRG.

“We want to mobilize consumers,” said Jeff Hamel, director of global energy and enterprise partnerships at Google. “If we can make, collectively, a lot of small changes across a large number of people, that has a large benefit to power providers, the grid, the environment and the consumer.”

Amazon, meanwhile, has begun using its home-installation business, Amazon Home Services, to help consumers set up and manage a smart home. The company also has held talks about utility partnerships and about small investments in startups working in the space, according to people familiar with company discussions.

An Amazon spokesman declined to comment.

Amazon has joined with companies such as Arcadia Power that provide a bundle of home devices made or supported by Amazon, such as the ecobee and Ring. It also has agreed to support installation of home vehicle-charging for the Audi e-tron electric SUV made by the Volkswagen AG unit.

Devices such as digital thermostats and accompanying software can help consumers save money by suggesting alternate times, when power is cheaper, for energy-intensive activities such as running a washing machine. Many electricity providers are seeking to create incentives to persuade consumers to embrace such steps, either through points that can be used for purchases or even cash rebates. Analysts see tech companies as having a huge ability to amplify such efforts.

Google has tested its ability to use its technology to this effect. During the 2017 solar eclipse, when solar-power generation was offline, Google encouraged Nest thermostat owners to opt into a program in which the devices cooled their homes before power supply fell due to the eclipse. Then during the eclipse, the thermostats turned the temperature up by a few degrees. Google called the event a “Solar Eclipse Rush Hour.” More than 750,000 customers participated, reducing energy consumption by 700 megawatts, Mr. Hamel said.

Expanding into electricity is a challenge for tech companies because the power sector is diffuse and subject to myriad regulations world-wide. Companies’ early efforts have focused on deregulated power markets such as in Texas, where customers can shop among numerous retail electricity companies, which in turn buy power from wholesalers. That lowers barriers to entry, since retail providers don’t have to own electric lines or power plants.

In Texas, where during a hot stretch last July power prices briefly reached above $2,000 per megawatt-hour, compared with an annual average of $34.69, the ability to persuade thousands of consumers to reduce consumption at peak times can help a retail provider sharply reduce its costs.

While existing retail providers and utilities have improved in this area in recent years, their solutions have yet to become dynamic, automated and continually responsive to market prices, said Elta Kolo, research manager for Wood Mackenzie power and renewables.

“It’s still a resource that remains untapped,” she said. “This technology is already in the home. That’s the beauty of it. The opportunity is orchestrating it.”

Laura Stevens contributed to this article.

By Bradley Olson

Conozca los beneficios exclusivos para
nuestros suscriptores

ACCEDA YA SUSCRÍBASE YA

MÁS DE GLOBOECONOMÍA

Globoeconomía 19/04/2024 Presidente de Ecuador declara estado de excepción por emergencia en sector eléctrico

El presidente dispuso la movilidad de militares y policías para garantizar la seguridad de las instalaciones del sector eléctrico

China 20/04/2024 Xi Jinping, presidente de China, ordena la mayor reorganización militar del país desde 2015

Una nueva unidad aeroespacial mejorará la capacidad de China para utilizar el espacio e intensificará la gestión de las crisis espaciales

Ecuador 17/04/2024 Ecuador dice que funcionarios ocultaron información en medio de la crisis energética

El Gobierno de Daniel Noboa dijo que se habría ocultado información clave para hacer frente a los problemas de abastecimiento de energía