I dont think the utilities have any motivation deploying demand response, what would they get in return? 40% off in their income!
Cuong Nguyen - 10/28/2008 - 08:47
utility vs consumer vs 3rd party supplier
Jesse:
Thanks for the update and opinion. Here'se my 2-cents ....
It would seem that the cost quoted in the article couldn't cover install and test and certainly couldn't leave budget for support infrastructures. I also doubt if it covers even the hardware cost. I assume the business model relies on a reoccuring revenue stream that was not fully disclosed.
You seem to be headed down a familiar path that continues to struggle because of several key assumptions:
1) The utility will purchase the system, install it, and reap significant benefits from selling less electricity
2) The industry and consumer is ready for a one-size-fits-all solution.
3) Appliance (devices) can be controlled (on/off) in the manner described.
4) This system (or the utility) will turn things off safely, effectively, and the consumer will accept it with no backlash on the "big brother is watching" theme. As I have stated before it's all about the customer. Don't forget, it's the customer's home. You have to knock before entering!
- Gale
Gale Horst - 11/03/2008 - 12:23
You may have missed the mark on several points
I just read your story regarding Sequentric.To be honest, I think you missed the mark on several points:
Utility installed devices at breaker: All the utilities I’ve dealt with through Itron and the ZigBee Alliance envision a product distribution model where the user purchases and installs equipment independent of the utility or vendor. No one is promoting a service model of installers going into millions of homes to install and maintain equipment. Based on your article, I don’t see how Sequentric has overcome the objections of utilities and vendors on this point.
Chip cost and capability: ZigBee chip costs are not $5 per unit, at least not for Itron. I’m skeptical that Sequentric, with a proprietary approach, can get their radio costs down to $1, even if they are using mass market 433 chips. I’m also skeptical that the same mass-market chip that drives garage door openers can perform the security computations that utilities are asking for to keep their networks safe from cyber attack according to NERC CIP rules.
433 vs 900 MHz: Itron has experience with both of the frequencies and there doesn’t, to my knowledge, seem to be a large market advantage to 433. True it has a little more umph from being further down the spectrum, but that doesn’t seem like a major advantage. In real-world testing we’re finding ZigBee even at 2.4 GHz is performing just fine with range, interference, and obstacles. Mesh networking helps with all of that, and I didn’t get the sense that Sequentric does any sort of meshing.
Sequentric NOC: Others are taking this approach as well (see Tendril), so there doesn’t seem to be any differentiator for Sequentric here.
40% savings on electricity bills: This claim is beyond the high side of most research, pilots, and field data that I’ve seen. It’s also dependent on the rate structure the utility implements.
In your summary, you say that ZigBee devices need to defend their price premium against Sequentric and explain why the open-standard approach is better. First, I dispute the notion of a price premium, especially when you consider installation and maintenance costs of utility-owned equipment inside a residence. Two, open standard systems have a proven history of declining cost and increasing capability and innovation, all fostered by competition. Sequentric’s propriety system can’t claim that.
I’ll be interested to learn more about Sequentric and whether they really are all that. But right now, I don't see it.
Matt Spaur - 11/05/2008 - 09:48
Agree Wholeheartily with Matt Spaur
I think Matt hit it on the nose there. I have years of product development in AMI and HAN and don't see a $1 device. Chips are a lot more expensive then that. As to the concept that this company thinks is unique, there are several others (mine included) that run circles over this technology and cover much more than Sequentric's product line. I do think that their business model is limited and needs a wakeup call though. bmelendez@hemstech.com
Bill Melendez - 12/12/2008 - 17:04
Consumers in a Dial-up World
1. I applaud technology advancements and wholeheartedly believe the availability of future opportunities for profits and efficiencies.
2. It seems the natural course of events dictates that software application advancements precede the hardware and infrastructure needed to support them.
3. I suspect the Sequentric business model initially is being directed to the mass population areas where installation costs are low and potential profits are high.
4. I just wonder if prototypes for Smart Grid applications are being developed for customers in a dial-up world. I suspect the business models of DSL and cable internet providers which maintain rural islands of World Wide Web dial-up connectivity will apply the same business models for the Smart Grid technology developers and producers.
Rick Robinson - 12/23/2008 - 05:39
Lixar DR,
The concept of Demand response is fairly simple to implement.
First, a schedule on when to operate and curtail devices is required.
Second, what devices are to be curtailed, e.g. when you're away from home from 9 - 5 curtail/suspend the HVAC and water heater.
Lixar implements this, and so does Gridpoint (after they saw how Lixar did it)
Jenn Mist - 04/14/2009 - 16:49
Lixar v GridPoint
Lixar, Tenril, and GridPoint all implement Demand response and scheduled device operation. GridPoint is the oldest of these companies, and I doubt they "saw how Lixar did it" an copied them. I think the idea of demand response and scheduled devices is pretty obvious, and I am sure many companies will develop similar technologies in the future. That is just how innovative ideas work, companies don't generally steal them, they develop them simultaneously as the technology progresses.
Al Rothstein - 05/22/2009 - 12:02
HAN Spectrum Management
Sequentric's use of power and frequency sensors in the 433 Mhz range could experience administrative limits enforced by the FCC as the scale of deployment increases, especially as scales of 100s of millions of distributed end-points are reached.
Spectrum management factors could lead to Zigbee and related 802.15.4 implementations succeeding in the market place.
Bruce Rosenthal - 05/29/2009 - 08:48
Interesting
Electric water heaters should be illegal not integrated into a DR program.
Self DR is easy. All modern appliances already come with timers.
We're getting mixed signals about the vitality of the smart grid market. On the one hand, the recent DistribuTECH conference was one of the most successful ever. On the other, a well-known Wall Street analyst recently told his clients that the smart metering sector is "facing several headwinds," including weak regulatory support in the U.S. and delays in European adoption. Taking the pulse of the smart grid industry is this week's Tuesday Topic.
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