Tag Archives: smart technology

MirrorMirror: booth-based 3D scanner for online shopping

During the final year (2007-08) of my Physics degree at Imperial College, we studied a module called Research Interfaces (RI). This was a team-based module that focussed on transforming scientific research into commercial business propositions.

This was a highlight of the degree for me: I loved the collaborative nature of it and the entrepreneurial challenge was much more aligned with how I wanted to live my future life.

Our product design: MirrorMirror

Our team designed a product with the working name of MirrorMirror. It was a booth containing a network of cameras with a central computer that would stitch together the images to create a 3D scan model of the user’s body.

This would then be used to generate an avatar that would help them choose clothes that fit and suit them perfectly when shopping online.

Additionally, they could see their body on a screen in real time with different clothing options projected over the image as if they were wearing it (so-called “Augmented Reality”). This reminded us of the magic mirror from the Disney film, Snow White (hence the name MirrorMirror).

There could also be other uses like tracking weight loss for dieters and muscle gain for bodybuilders (if a new scan was made regularly to show the incremental changes) or the visualisation of the results of cosmetic surgery.

Technical Design

We produced several outputs for the class including this Technical Design Review.

In that document, we estimated the cost to build the prototype of £1.45m, a total future manufacturing cost per booth of £13,900, and a price point of £50,000.

This is exceptionally high and I believe it is a result of the fact that we were not actually required by the course to do any prototyping work. If we had, I think we would have focused on looking for a cheaper way to execute the plan.

Our original design required a screen behind a half-silvered mirror. I think in 2018 this would not be required as screens are not of incredible quality and image processing technology has come on exponentially in the last decade.

User experience

We believed that there are many high-end lucrative markets (such as wedding dresses, evening wear and saris) where a quicker and less stressful garment trial process would greatly add to the shopping experience.

Our team also saw the potential for future uses such as generating an accurate avatar of the person that can be used as a little virtual model for the clothes that are being selected. Imagine being email a picture of yourself wearing the latest items from your favourite designer and a link to buy exactly the right size for you?

We envisioned that booths could be installed in shopping centres, allowing customers to create a 3D image of themselves which they could then use to shop online. Additional lucrative applications could also include high-fashion hairdressing.

Our plan of the user journey is mapped in the image below:

User Journey for MirrorMirror

Business Case and Financial Model

You can see the basic financial model we generated here: MirrorMirror Costing.

When I say we, it was actually me that had the responsibility for putting it together and I could have circulated the draft to my team-mates before the deadline so we could have had more eyes on it before submission. We got our lowest grade by far for this part of the module, so I did feel a bit guilty! However, it was apparently the same for all the other teams, so my guilt was slightly assuaged.

After 10 years working in and around startups and scaleups, here are what I see as the big errors and omissions:

No time series for the values (everything is static)
Lag time between initial burn and revenue
- A proper cash-flow model would have helped clarify this
Significant errors on the business model (i.e. how we could get paid)
- For example, would we really want to make money on the hardware, or would we prefer to make money on the service provided by the software (i.e. charge money for every image processed – a digital version of the Nespresso model)
No R&D tax credits, Government grants, or other potential subsidies included
No marketing and sales budget included at all!

It is quite satisfying to look at old work such as this and compare it with what I have learned since then!

Final Pitch

At the end of the 3-month module, we had to deliver a pitch to a packed auditorium and a simulated panel of investors (made up by the professors from the Business and Physics department that ran the course).

You can see our final pitch document here.

This was a really enjoyable part of the course. I delivered it with 2 other teammates and we got everyone in the team up on stage for the Q&A at the end.

Outcome

We actually won the Elevator Pitch Prize at the end of the module which was a very personally satisfying way to end the project. We all received a good first for the course (>85%) which was very satisfying for all of us.

We entered into the wider university’s Business Challenge entrepreneurship competition, but we didn’t get past the initial screening phase. As a result, we all agreed to disband the project outside of the RI module and did not take it any further.

What didn’t we do?

It is quite telling that we didn’t build a prototype!!!

The reason that we didn’t build anything is that we didn’t have anyone that is super-focused on the tech side i.e. that could be a CTO. I also believe it is because we all saw this as a purely academic exercise and not as a true opportunity to start an entrepreneurial endeavour and make a return with it.

This tinkering on a prototype would have actually helped us see the true costs, challenges around manufacturing, and gaps in the business model. In fact, IDEO’s Design Thinking methodology (diagram below) expressly integrates prototyping as part of the design process. This project was perfect evidence of why that is the case.

I wonder if the Blackett lab requires the students on the RI course to build a prototype as part of the course nowadays?

Design Thinking Source: IDEO Mydhili Bayyapunedi @myd | @Young_Current

The UK’s most important 21st century infrastructure project? Cybersecurity

I believe that the most important 21st century infrastructure project for the UK will be the development of world-class cyber-security.

So much of our national infrastructure is being digitalised that it is easy to lose track.

My sector, the energy industry, is in a massive state of change. The emerging “smart grid” scenario comprises connected renewable generation, storage, metering, and demand response. This deep level of decentralised control will yield enormous benefits for cost and sustainability. However, these will come at the price of potential vulnerability to cyber-criminals and attack from state/non-state actors. A hijack of our energy infrastructure would have catastrophic consequences for our economy, security, and general way of life.

This is not just a problem for the energy sector. Digitisation is sweeping through our industries at breakneck pace. The automation of vehicles, the proliferation of digitally connected appliances in the home and industry (the “Internet of Things”), digitisation of medical records, and even the cultivation of food in “vertical farms” means every aspect of life will be affected.

Improving the resilience of these assets must be of paramount importance. However, the rise of high-profile hacks of data and growing incidences of “ransomware” attacks show this is not translating into action.

Increasing cybersecurity literacy for all ages must be a priority for the government. Many people still use easily-hackable passwords and can be fooled by a simple phishing attack. Education must start at school and continue in the workplace, even at board level.

The 2017 ransomware attack on the NHS shows how crippling cybercrime can be for our institutions. The attack exploited a vulnerability which would not have been an issue if the IT infrastructure had been the latest available. Budget cuts at the NHS Trusts meant that they had de-prioritised IT upgrades and exposed themselves to cyber-risk.

The UK Government must make it clear to leadership at all critical organisations that IT security has to be priority #1 for all spending, with ring-fenced budgets. HM Government should set up a unit of “white hat” hackers that is responsible for penetration testing the Police, NHS, and other assets of national importance on a constant basis.

Our economic advantage as a nation arguably rests on our ability to innovate. Therefore it is also critical to help the private sector to protect itself against industrial espionage, which is often sponsored by nations with low respect for Intellectual Property rights.

The physical communications network underpinning the internet also needs to be protected. The vulnerability of our undersea cable connections to other countries to attack by hostile actors needs to be addressed, and the UK needs to have a strong presence in the Space sector to remain at the leading edge of innovations.

Developing the world’s best cybersecurity infrastructure will put the UK in pole position to capitalise on the opportunities of digitalisation while protecting itself against future threats. All other infrastructure will need to build on this platform, which is why I regard it as the most important.

Upgrading Our Energy System: Smart Systems and Flexibility Plan from BEIS – my thoughts

Early in 2017, the UK Government called for evidence and views on how to move the UK to a smarter and more flexible energy system. They received over 200 responses and I am informed that the vast majority related to energy storage.

The UK Government took the views into account and have produced a plan of 29 actions that BEIS, Ofgem, and industry will take for the future of the UK energy system called: Upgrading Our Energy System: Smart Systems and Flexibility Plan. I’ve sketched out some of my main thoughts on the document below.

Introduction of an energy storage licence to UK grid code

Tantalisingly, the UK Government plans to recognise the overwhelming noise from industry and amend the Electricity Act 1989 to include a definition of storage, but frustratingly only as a subset of the generation asset class. It will be based on the Electricity Storage Network definition and Ofgem will begin consulting on this in the summer of 2017.

The licence changes will allow storage to be exempt from final consumption levies and will de-risk investments that co-locate alongside renewables. Ofgem will improve the connections process and will use financial incentives to make the DNOs do more to help their customers.

In some ways, it is great news that the Government is finally making this move. However, by merely adding it as a sub-set of generation instead of making it a separate asset class, I interpret this solution as a bit of a bodge-job.

Creating a separate asset class would have opened up a much deeper discussion about which organisations can own the asset (i.e. can DNOs? Can National Grid?). By not creating a separate class, it seems that this vital conversation is off the cards entirely. Indeed this is consistent with Ofgem’s view (plainly reiterated in the document) that “network companies should not own or operate storage”, as they think it will “impede the development of a competitive market for storage and flexibility services”.

In my mind, this is the wrong conclusion. For me, DNOs are the perfect customer for energy storage assets. They already own the wires on the network that do the spatial arbitrage of taking energy from places of low price (supply) to places of high price (demand). Surely it follows that DNOs should be trusted to do the same with the temporal arbitrage that storage provides?

If DNOs will be continuing to make decisions about investing in the capital equipment of wires, transformers, and the rest, then surely they should be allowed to own storage at the same time, as it is being lined up as a potential rival for these traditional assets ( one of the major touted benefits of storage being “Transmission and Distribution Upgrade Cost Deferral”)?

Removal of other barriers to energy storage and Demand Side Response (DSR)

Apparently, Ofgem has already consulted on a proposed Targeted Charging Review (TCR). The consultation stated Ofgem’s views that storage should only pay one set of balancing system charges (not two as currently) and that storage should not pay the “demand residual” element of network charges at transmission and distribution level. This is obviously a sensible move as it removes a major source of unfairness and will make the business case for storage projects a lot healthier.

Ofgem are looking at giving aggregators access to the Balancing Mechanism (BM) and clarifying the rules for DSR and energy storage to participate non-exclusively in the Capacity Market (CM). This is really great news for the UK energy market. Firstly, clarification of the CM rules will finally allow the much-talked-about revenue stacking that underpins almost all energy storage projects.

Secondly, allowing aggregators access to the BM will boost DSR and energy storage as it will allow them to compete with traditional generation in the provision of this vital service to the System Operator, National Grid. Professor Goran Strbac of my almer mater Imperial College has frequently spoken about the potentially huge benefits that energy storage assets could provide to the BM, so this development would pave the way for his predictions to become reality.

Removing barriers to smart meters and “time of use” tariffs

The document refers to the UK Government’s commitment to ensuring that every household and small business is offered a smart energy meter by the end of 2020.

To make the most of these hard assets, domestic half hourly settlement of electricity payment has been possible on an elective basis since June 2017 and Ofgem will consult on whether it will be made mandatory. If so, it would be dovetailed to coincide with the smart meter roll-out.

Intriguingly, these two developments would allow me to introduce my PowerCube product idea if I decided to move forward with it, as the smart meter and half hourly metering requirements were the two major limiting factors holding back the product’s successful launch.

The document talks about the need for consumer protection, standards, and cybersecurity protection as part of the smart energy revolution. In an increasingly interconnected and rapidly-changing world, these factors will be extremely important if the benefits are to be safely secured.

Recognition of smart energy entrepreneurship

On a final note, it was great to see the inset case studies of various innovative smart energy startups such as VCharge and Open Utility included in the paper.

It was particularly great to see Upside Energy mentioned, which is a company that formed as part of the Nesta Dynamic Demand Challenge competition that I supported as a mentor back in 2014. Graham and the team were one of the winners, so it’s encouraging to see them still going from strength to strength.

Winners of Nesta’s Dynamic Demand Challenge announced

The winners of Nesta’s Dynamic Demand Challenge have been announced at the Finalists Awards Presentation last week.

The winners were Demand Shaper of Exergy Devices with Hestia, a “smart home controller specifically designed for electrically–heated homes, and could save these households over £200 per year. Using Demand Shaper technology, Hestia implements a time–shifting algorithm to subtly alter domestic heating schedules, modulating electricity demand according to the needs of electricity suppliers, or National Grid“.

Hestia Nesta dynamic demand Challenge winners

Hestia (aka Exergy Devices) received their award: Winners of the Nesta Dynamic Demand Challenge

To be perfectly honest, at the Hackathon I didn’t fully grasp understand their offering, as you can see from my previous post on the topic. However, I should have guessed they would do well as the team have invested significant efforts in their academic research into this field, and already have a history of successful and profitable IP generation for the smart home market.

The focus on an initial target market (or “sandbox”) of electrically heated homes will lead to some impressive benefits:

“Hestia could reduce energy consumption by 25% thanks to subtle alterations in domestic heating schedules which match the homeowner’s needs with the supplier’s capacity. The technology offers a peak demand shifting capacity of 1.7 GW if deployed across the UK and has the potential to reduce individual homeowners’ CO₂ emissions by around 3 tonnes per annum and save around £200 a year.”

Hestia have won £50,000 in funding on top of the significant benefits and funding they have received from the Challenge already. Congratulations to Dr Peter Boait and his team!

I was also delighted to see that my favourite finalist, Upside, won a place on the Climate-KIC Accelerator which will see them receive €25,000 in funding and “continued support to develop their business”. In addition to this, Upside has recently confirmed their successful bid for funding from the Technology Strategy Board’s Localised Energy Systems Competition, in consortium with Siemens, Sharp Labs, Tempus Energy and the University of Manchester. Graham and his team now have a great combination of validation, investment, and partner support to take the idea forward. Well done guys!

This brochure from Nesta contains information on all the finalists: their progress to date, their future plans and any investment opportunities for those that want to support their work. On a side note, it’s nice to see my PowerCube Tariff idea get a little shoutout in there:

“An ultra low–priced electricity tariff, with a capacity ceiling that is hard wired into consumers’ electricity supply. A smart meter would be installed in house, including a switch, which will feed from the capacity limit that is fed from the smart meter. The Powercube will notify the user via green, amber or red lights and also via text message when they are utilising a surge of electricity. If a large amount of electricity is used at one time, the house’s full electricity supply will cut out for 60 seconds as a warning/incentive for the user to be more wary of their activity.”

I should add that paragraph was not written by me… 🙂

It was exciting to see how far the ideas have come in the 12 months of the Challenge and I’m optimistic for the potential environmental benefits that will come out of this successful initiative. I recommend this as a model project for all those seeking to stimulate smart grid entrepreneurship.

PowerCube: a capacity tariff to fight UK fuel poverty

During last year’s Dynamic Demand Challenge Hackathon, the organisers asked me to form an impromptu team with another Roving Hacker. Together we designed a “capacity tariff” aimed at those living in fuel poverty (an estimated 3.5m UK households).

Our idea, PowerCube, is to limit the power that can be drawn by a household in exchange for a deep discount (50% or more) for the price per unit of electricity (kWh) paid by the consumer. This would be achieved by installing a device such as a relay switch on the main incoming power supply that is triggered by the smart meter when the power reaches a certain predefined level. Our pitch presentation at the end of the 36 hour Hackathon can be found here:

Benefits of the idea

The benefits of this tariff are many. Customers would benefit from reducing their outgoings on expensive energy, utilities would eliminate the need to buy electric at peak times when it is expensive by shifting large amounts of demand to off-peak times, and the environment would benefit as it would reduce the need for GHG-intensive peaking plants powered by fossil fuels like gas and oil.

Fuel poor customers often have poor credit history and therefore frequently receive their electricity via a pre-paid meter, notorious for their scandalously high prices. Because ‘Fuel poor’ householders are often in a situation where they are faced with the “heat or eat” scenario, our belief is that the 50% discount of the PowerCube tariff is something that would get real traction.

Weaknesses of the idea

Capacity tariffs are not a new concept and have been trialled on the continent before, to mixed levels of success. We believe that targeting them at the energy poor section of the market, for whom energy prices are a real and priority problem, will give the concept a new lease of life as this application will add real value to this particular market segment.

The PowerCube tariff idea relies on a physical device to give a visual/auditory signal to indicate when the household is close to its limit. Ensuring that this signal is simple to understand and able to inform action is vital.

It is also important to realise that the whole concept of a capacity tariff means that people will need to learn the relative power demands of their devices, which could prove difficult for consumers who are not very tech-savvy. However, a counter argument to this is the fact that non-commercial sailors intuitively learn how to ration their power use on a boat to stay within the fixed capacity limits of their vessel’s battery supply.

Finally, the level of the capacity ceiling will probably need to be fixed and chosen very carefully, as it will be too confusing/undesirable for customers to live in a situation where their allocated capacity ceiling is changing unpredictably. It also might need to be set on an individual basis, which could prove expensive if not an automated solution is not developed well.

Opportunities for the idea

The tariff would provide consumers with savings of around 50% from their electricity bills, which is a significant amount of money (around 5% of their annual income when using the old definition of fuel poverty).

It would also allow the UK to shave a significant amount of peak load if designed correctly. For example, if 5% of the UK’s energy poor households (3.5m*0.05=175,000) were to sign up and reduce their peak demand by 2kW it would be a 350MW saving, equivalent to an average UK natural gas power plant gas.

Threats to the idea

One big threat to this would be a change in the demand of a household, or a consumer switching tariffs after receiving the PowerCube device.

Another threat would be weaknesses in the UK smart meter roll-out, such as low up-take or hardware that is incompatible with the infrastructure of this tariff offering.

Internet of Things: Smart Home Security Systems and Burglar Alarms

Google recently paid $3.2 bn to acquire Nest, the makers of connected smart thermostats and smoke alarms. It is a strategic coup for the company, partly because it brings Nest’s CEO Tony Fadell on board, an engineer with a proven eye for design honed during his time as Apple where he lead the design of the iPod. However, it is also a major move as it positions Google strongly to capitalise on a new frontier: enabling web-enabled devices in the home, more commonly known as the “Internet of Things”.

This is a pretty grand ideal in theory, but what concrete, near term opportunities are there for the company to innovate? Specifically, what are the “low hanging fruit” of the Internet of Things?

Home Security System/Burglar Alarm

A prime example of a pre-digital device that is essentially redundant in its current form is the home security system or burglar alarm. Great though they must have been during an age of tight-knit local communities, the audio signal emitted when an alarm is triggered nowadays is delivered to a largely unconcerned audience. Close neighbours in big cities or even towns are largely unknown to each other, so burglar alarms tend to just add to the cacophony of the urban ether rather than acting as a call to action to apprehend burglars or call the police.

Connected Home Security Systems: the burglar alarms of the future

Features of a smart burglar alarm

A smart burglar alarm would be able to send the signal to the relevant parties by SMS, email or signal to an app on the user’s smartphone, tablet, or other connected device. In addition, GPS trackers on the devices of nominated parties (relatives, friends, and maybe the emergency services) would show the central system of the app when they are near to the house and if they are within a certain response time, they will be also sent an alert by the app so that they can intervene if the householder is too far away to do it themselves.

Nature of pre-smart alarm signal is redundant

Another critical characteristic of pre-smart burglar alarms is that the information carried by the signal is too generic to call for action in a compelling or efficient way. They are binary, with an off state (“silent”) or an on state (LOUD NOISE!!!). This leads to a confusing call to action, as there is too much ambiguity for an actor to investgiate: is there really an intrusion or is it a false alarm? Is the burglar still inside the house? Has somebody already been informed and are they already in the process of dealing with it?

A smart home security system concept

The exponential decrease in the cost of sensors means that a smart burglar alarm could actually convey more specific and hence useful data to the nominated parties, enabling a more effective call to action.

For example, the specific trigger point could be communicated (roof, ground floor windows, front door) so that the alarm points can be investigated quickly and the possibility of a false alarm ruled out in less time. Infra-red cameras could measure if there are people inside the house, counting them and perhaps even identifying them using facial recognition.

The triggering app would allow the user to see who precisely has been signalled, who has acknowledged the signal, who is acting on it, their estimated response time, and their current location.

Competitors and Innovators

Piper’s Home Security System and Mobile app interface

There are some impressive innovations in this field such as Piper and Canary, which are standalone video and sensor units acting as a “mini sentinel” in the home. Piper, which is already available for purchase, also acts as a household device controller and could therefore turn on lights in the home if signalled to do so. They both have the awesome idea of adding video to the equation, meaning that if the motion sensor is triggered, the user could immediately switch to video to see who the intruder is. I imagine the video stream could also be recorded for legal purposes in the event of a burglary.

Home CCTV enabled by Piper

Priced at $239 and $199 respectively for a single basic unit, the issue is that the devices only cover one room each, which makes them an expensive solution for a whole home, although a promising start and a massive leap forward. Canary smashed its request for crowdfunding on IndieGogo so expect to see the first units available later this year.

The miGuard alarm system from Response Electronics uses an integrated mobile phone SIM card to communicate with your phone by GSM/SMS and has a total system cost of £269.95 (about $452). This is a much more attractive price point for a whole-home system, but the technology is not smart enough to capture the full range of possibilities offered by the rapidly decreasing costs of technology and increasing connectivity of web-enabled devices.

miGuard Home Security System – schematic diagram

Other potential players

Of course, this concept is not just a possibility for Nest and the innovators outlined above, as there are other innovative technology companies who are trying to get into the smart home space.

As a Brit and Imperial college alumnus, the most notable example I can think of would be Dyson. My rationale here is that Dyson are one of the great innovators of UK industry and a global pioneer in domestic technology, highlighted by its recent partnership with Imperial College on robotic vision with a view to implementation for autonomous vacuum cleaners.

This is an intriguing partnership, given the promise of Imperial’s recent contributions to the field of Simultaneous Localisation And Mapping (SLAM) in addition to the fact that the unlocked value of Dyson’s disruption of household technology markets runs into the billions.

AlertMe, the British home monitoring controls company could also have a say in the development of this industry on the software side through their Smart Monitoring platform, linking all devices in the home.

Conclusion

A connected home security system is a complex endeavour, given all the possible flows of information and control that are being unleashed by the digital revolution. There is a range of possible ideas already in the market, addressing the various price points that could be considered by consumers.

The advantage that Nest could have if they developed a smart home security device or burglar alarm is that they already have two products on the market that could feed into it, not to mention their experience of successfully designing the necessary user interfaces and hardware for mass consumer uptake. Combined with Google’s expertise with algorithms and handling large data sets, it is a mouthwatering prospect to think what they could do together in this area.

Given the fact that smart burglar alarms will be such an improvement on the pre-digital state-of-the-art, I wouldn’t be surprised if the eggheads at Nest have already been incubating something like this for some time. This guy has even mocked up a great example of how Nest’s existing thermostat interface could be converted into a burglar alarm.

Nest’s Thermostat as a Burglar Alarm

I would not be surprised if there are further acquisitions in this sector in the coming months. These are very exciting times for this emerging technology market.

My thoughts on the Dynamic Demand Challenge Prize Finalists

To recap from my previous blog post on the Dynamic Demand Challenge Prize, the 5 finalists chosen by the judges were:

My favourite idea – Upside

Of the 5 chosen ideas, the most exciting from my perspective is Upside. Their idea is to allow the owners of UPS systems to trigger them to turn on during times of peak electrical demand, saving the customer money and reducing the burden on the electricity grid.

This demand curtailment could be coordinated through a demand response aggregator such as EnerNOC or KiWi Power, meaning that not only could the UPS owner profit on the arbitrage of cheaper energy and enjoy the carbon savings associated with avoiding high-carbon peak rate power, but they could also benefit from participation payments from the providers. Not only that, but it is inherently beneficial for customers to regularly test their UPS to ensure that it will actually work effectively in the case of an actual emergency, so why not get paid for it?

For me this idea is exciting due to the size of the UPS market in the UK. My finger-in-the-air estimate is that there is around 0.5-2.5 GW of connected UPS capacity in the UK currently that is protecting sensitive servers and equipment (a better estimate is probably available via this market study or similar). Even at the conservative end of my range, if this “dumb” capacity could be made “smart” and then mobilised during times of peak grid demand, that would be the equivalent of a virtual gas power plant turning on. Now that is exciting!

It sounds like Upside are currently very busy developing their product and customer base. If it were up to me, they would win the challenge hands down.

My second favourite idea – Powervault

However, a special mention should go to Powervault. Their technology is a battery system that can be simply installed in a UK home via a normal LV socket to allow the household to store any surplus electricity produced in the day by their solar panels to be used later on during times of high-carbon peak electricity demand.

Through the Powervault system, the user would reduce their carbon footprint in a fairly measurable way by reducing their demand at peak times, plus they would presumably save money due to the arbitrage effect of saving electricity generated at a time of low cost for use at a time of high prices (as long as the cost of the electricity lost due to the inefficiency of the storage doesn’t cost more than the marginal arbitrage benefit received).

I like the idea that the technology is easy to install for a household. It is also undeniable that energy storage will be a huge market theme in the coming years, as the UK seeks to increase its resilience to grid volatility as it integrates more renewable power into the generation mix.

The main issue with the Powervault concept for me is the target market. It is great that the team have a very focused target customer, households who own solar panels, and a defined value proposition of “be greener”. This group is clearly so concerned with “being green” that they have already shelled out thousands of pounds for solar panels, so potentially it is a strong strategy.

However, I worry that if the financial benefits don’t add up then the prospect of being greener will not be strong enough to justify the cost of the Powervault system, which I guess would have to retail at somewhere between £250-£500 to be attractive. The system would need to yield an arbitrage income of £25-£50 per year to stand even a modest chance of appealing to customers. Even then, customers will not directly see these savings in their bill, so how will they be convinced of the financial case for the product?

I also wonder if a target market of residential solar panel owners in the UK (or owners of any distributed generation technology) is too small a market to focus on. Presumably there are only around 50,000-100,000 households in the UK that currently own solar panels (my guess), which would yield a maximum serviceable market of £12.5m. Assuming that you can only grab 5% of that market (due to factors like competition and customer apathy), that would give a potential market size of around £625,000, which would yield a very unattractive proposition.

One of the first things I learned in marketing is that fear sells. If Powervault wants to increase its potential market size, and add another really compelling motivation to buy their product, I suggest that the company also targets people who are scared about power cuts and outages that would damage their household equipment and interfere with their quality of life. As someone who has lived through a 3 day blackout in the UK, I can testify that this is something that I would be quite keen to avoid with a potential £250-£500 investment (although I’m not suggesting that they should have a battery that would supply a house for 3 whole days).

My least favourite idea: Community Substation Challenges

One of the ideas – Community Substation Challenges – centred on the use of smart fridge magnets to display information in the hope of motivating households to compete against their neighbours and save energy in their homes.

I am really not a fan of the theory that consumers will enjoy or prioritise the gamification of energy efficiency in their daily lives. Will you really care about how energy efficient your house is when the kids are fighting each other, the stove is boiling over and there’s just been a knock at the door? Will customers really look at their fridge magnet display 1-2 weeks after it has been delivered? When was the last time you really looked at the front of your fridge? Recently there was even a whole hackathon event in Paris, Energy Hack, entirely based along a similar line of thought.

Obviously I’d be delighted if this idea gets built and shown to successfully lead to consistent energy savings over time. However, if I was an investor, I would want to have seen extensive market research or some form of Minimum Viable Product as discussed in the Lean Startup methodology. Good luck to them, but the idea wouldn’t be a priority for my investment capital.

thEnergy

As I understand it, the idea of this team is to use a heat storage medium embedded in the fabric of a house to store heat generated by heat pumps during periods of low demand to be used in the winter when demand for heat is high.

The issues with this one are primarily technical but there are some commercial considerations. Is the heat storage mechanism cost effective to produce, safe to operate and easy to install? Will the market understand the offering and can the team create a product offering in a way that is desirable and easy to understand?

Quite frankly, this one didn’t especially grab me during the Hackathon and there’s not a great deal on the site to understand. However, when you consider how significant a proportion of UK energy demand is in heating (44% by their numbers), it will be a promising finding if they pull something together that is feasible.

Demand Shaper

The guys at Demand Shaper plan to create a service based on a smart home control device that will allow for residential energy use to be “influenced” by their company in order to reduce peak demand.

Source: Demand Shaper’s Second Blog

It’s a mammoth task and a complicated process, although the potential savings are enormous. Due to its complexity, it wouldn’t be my first choice of project to invest in, as it has various barriers to overcome. For example, they are in discussions with Ofgem and Elexon about making a change to the UK settlement system. Now I am all for the optimistic mindset, but that is one hell of a challenge for a new startup to pursue!

I also wonder whether they have undertaken enough market research to justify the effort they are making. Time will tell – it’s certainly an interesting concept!

Hacking for a smarter grid: Nesta Dynamic Demand Challenge Hackathon

I recently attended a great Hackathon as part of the Dynamic Demand Challenge Prize.

Organised by the Nesta Centre for Challenge Prizes in partnership with the National Physical Laboratory – Centre for Carbon Measurement, the Challenge is co-funded by Nesta (the UK innovation charity) and the Department for Business, Innovation and Skills, with the National Grid as a lead sponsor.

Dynamic Demand Challenge Prize: What is it?

The Dynamic Demand Challenge Prize is an exciting competition set up to encourage innovation in the demand side management sector of the UK electricity industry. Specifically, the goal is “to create a new product, technology or service that would utilise data to help households or small businesses demonstrate measurable reduction in carbon emissions by shifting energy demand to off-peak times or towards excess renewable generation“.

Imperial College Engineering Department

The Hackathon itself was and hosted by Imperial College London and Climate-KIC, with Judges and demonstrators from OFGEM, DECC, Which?, and KiWi Power.

There’s a great briefing document on the need for demand side management in the UK, written by Marieke Beckmann of the NPL, that is available for free download here.

Why a Hackathon?

10 teams of innovators were selected from the vast number of competition entries and invited to attend a 36 hour Hackathon at Imperial’s Faculty of Engineering to make demonstrable progress on their ideas and to allow the judges to get a better feel for the potential of the both the ideas and the teams.

Although my own idea was not shortlisted, I was invited to attend the event as a “Roving Hacker”, with the task of assisting the other teams in the development of their ideas and adding value based on my experience of the energy sector and demand side management.

However, one of the invited teams dropped out at the last minute and so I was invited to join up with a fellow “Roving Hacker” to form an improvised 10th team to take part in the event. More on that later.

Hackathon structure

The Hackathon was manned by a number of knowledgeable experts (called “Hack-xperts”), demonstrators, and mentors who circulated, adding value to the development process at every stage.

Reverse engineering an electric whisk

As well as plenty of free time to go off to the lab or meeting rooms and work on your product, there were several sessions designed to stimulate and inspire the teams.The first of these was a reverse engineering session: each team selected a household object and took it into the lab to de-construct it into its individual constituent parts in order to appreciate the complexity of event the most mundane pieces of household equipment (we counted more than 78 individual parts in a £20 electric whisk!) and get our mindsets into “design mode”.

There was a great “speed-dating” style elevator pitch and feedback session, where each team had 3-5 minutes to pitch their ideas to 2 Hack-xperts and receive feedback before the bell sounded and they had to move on to the next pair. This was phenomenal as it not only forced the teams to practice and refine their elevator pitches,

Marketing and business models lecture

We received expert coaching plus talks on the formulation of business models, on marketing, on the measurement of energy efficiency and power saving claims, and on seeking finance and pitching to investors.

What was your idea?

We developed a “restricted capacity tariff” specifically targeted at the 3.5m UK households living in fuel poverty. By fitting a device into the homes of participating customers that limits the total power that can be drawn by a household, our tariff can give the household a strong discount on their electricity as this predictable load pattern will bypass the need for expensive peak-rate electricity to be bought on the Grid’s capacity auctions. Our idea will be explored in more depth in a further post to come, so subscribe to my mailing list to watch this space!

What happened?

smart grid hackathon feedback and elevator pitch

Impromptu pitch and feedback session

At the end of the weekend, each of the 10 teams pitched their idea to a panel of expert judges and the event’s attendees. The panel then asked the presenting team a series of questions to probe the inherent assumptions and to explore the potential of each idea and team in greater detail. All the pitches were recorded on camera (check out the videos on the Dynamic Demand microsite): perfect for post-event pitch improvement!

From the 10 attendees, 5 finalists were selected by the judges to progress their ideas over a six month period before the Final. Each of the 5 teams won a prize £10,000 of funding from Nesta, technical and verfication support from National Physical Laboratory scientists as well as expert business advice courtesy of Climate-KIC and Imperial College.

The winners

The 5 finalists chosen by the judges were:

Our idea for a capacity tariff was strongly commended by several of the Hack-xperts and judges but unfortunately didn’t make the final cut. However, there was no shame in this as our team was formed at 9am on the first day of the Hackathon, whereas the other teams were formed well in advance by people who had been working on their ideas for months, if not years, as part of their jobs and PhDs. In addition, our team had only just met each other, whereas many of the teams had known their colleagues for years. To be frank, it was incredible that with this competition we were even able to put something notable together within the 36 hours!

To view my detailed thoughts on the five finalists, read this blog post.

What happens next?

The winners of the Challenge will receive a prize award of £50,000 at the Celebration Event in June 2014. Fingers crossed for an invitation…

David John Kaye

Deeptech Grant Writer and Business Designer