Tag Archives: UK

Google to acquire Dyson?

Back in 2014/2015, I wondered whether it would make sense for Google to acquire Dyson.

Growth of Alphabet/Google hardware presence

In order to keep their advantage in the search and data sphere, Google (now Alphabet) ramped up their presence in lots of emerging hardware spaces via acquisitions such as Motorola, Boston Dynamics and Nest Labs. Also, Google has developed their own technology innovations at Google X (now simply X), such as the world-leading autonomous vehicle company, Waymo.

In order to fully commercialise such acquisitions and innovations, Google needed to have access to an abundance of world-class hardware product development and marketing experience.

Google made a step towards this in 2014 when they acqui-hired a design firm based in California called Gecko Design. However, I believed Gecko Design was not big enough to fill this void alone.

This left me wondering whether Dyson would be a good fit to help satisfy this need for design engineering firepower.

Dyson’s common interests with Google

Dyson was rumoured to be working on an electric car after it acquired battery company Sakti3 (which has now been publicly confirmed) and also invested £5m with my alma mater, Imperial College, to develop next-generation robots, resulting in the Dyson Robotics Lab.

Given Alphabet’s world-leading autonomous vehicle project, Waymo, and it’s previous interest in robots, I thought that an acquisition of Dyson would give Alphabet/Google a huge advantage with its massive team of 4,800 design engineers.

Dyson and Alphabet have other visions of the future in common. One notable example is Halo (see right), Dyson’s previous prototype of a Google Glass-type device that they built 10 years before Google launched it!

Would Sir James Dyson sell?

As of 2018, a tie-up between the two companies has not yet emerged. In many ways it is unsurprising, as Sir James and his family appear to own 100% of Dyson, so why give up control? (On that topic, there is a great interview with Sir James on NPR’s How I Built This podcast about how he grew his business which explains that surprising fact).

Also, Sir James is a vocal advocate of keeping engineers in Britain and growing British talent to boost industry and our economy.

His leadership on this issue includes launching his own university with a £15m investment, called the Dyson Institute of Engineering and Technology, and his £12m donation to Imperial College to launch the Dyson School of Design Engineering (as well as the previously mentioned Dyson Robotics Lab).

In short, I’m not going to hold my breath for this one. However, it will be fascinating to see how Google and Dyson both fare in the autonomous and electric vehicle markets. Perhaps future collaboration or a joint venture could be on the cards?

Roman Roads as a Tube map

I’m a big fan of maps and I’m currently enjoying a spell of learning about Roman history (The History of Rome podcast by Mike Duncan is a particular treat).

You can imagine my excitement when I saw these maps of road networks in the Roman world made in the style of the London Underground or “Tube” map.

Produced by Sasha Trubetskoy in the USA, this one of the Roman road network in the UK is an absolute beaut:

Roman Roads of Britain

He has also produced this one of the major road network across the Roman world:

Roman Roads

Finally, here is his map of the Roman road network in Roman Italy:

Roman Roads of Italy

Great fun for the map nerds among us!

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.

Nesta Inventor Prize

Nesta, a UK-based innovation foundation, has just launched the Inventor Prize.

It’s a new challenge prize aiming to support and inspire inventors to come up with physical and digital solutions to 4 major challenges in UK society:

  1. Financial Inclusion
  2. Mental Health
  3. Ageing
  4. Air Quality

The finalists get a £5,000 grant and mentoring support to help develop and test their invention. At the end of the competition, the top prize is £50,000.

The inventor must have a working model of their idea and it must have a clear market to improve lives in the UK. The final version will be developed through the prize with extensive user testing.

The deadline for submission of ideas is 11 pm on 22nd October 2017.

If their previous Dynamic Demand Challenge is anything to go by, this new Inventor’s Prize will be a great little initiative to support upcoming inventors.

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.

Sale of Green Investment Bank

In my opinion, one of the great Liberal Democrat achievements of the Lib Dem/Conservative Coalition UK Government of 2010-2015 was the establishment of the Green Investment Bank (GIB).

The GIB was set up with UK public money to “back green projects on commercial terms and mobilise other private sector capital into the UK’s green economy”. It invests in a variety of green UK projects such as energy efficiency, waste/bioenergy, and offshore wind. By June 2017 it had invested into 99 projects, committing £3.4bn into the UK’s green economy (much of that from private co-investors).

As a Brit who is dedicated to greening the global economy, I was proud to see this excellent development and excited to think about the huge potential impact that it would have.

I envisaged a British version of KfW, the German Government-owned bank with over €489.1bn of total assets and annual revenues of over €74.1bn (in 2014). KfW has had a transformation impact on the German green economy and wider economy. It is 90% financed by the capital markets, issuing bonds that are guaranteed by the Federal Government (and therefore have an interest rate that is extremely low).

I was therefore shocked to hear that the Conservative government (2015-2017) had agreed on the £2.3bn sale of the GIB to Macquarie, an Australian infrastructure investment bank. Many have criticised the sale, saying it has been sold off on the cheap and that the bank will not stick to the green investment mantra after the obligatory 3 year period.

Apparently, the GIB chair was in favour of the sale as they believed it was important to get new investment to grow the bank’s impact and secure its long-term future. How true that is (or how much it is someone protecting their job/position) I can’t tell, but I can somewhat see the logic.

What I find odd is the fact that the GIB would surely be a key channel that the Government could use to deploy capital to support their flagship Industrial Strategy policy. This Strategy was formulated to stimulate technology and green businesses so that the UK economy is well positioned to grow and be globally competitive for years to come. Selling the GIB removes a crucial funding dispersal mechanism that could have addressed barriers to green economic development and buttressed the Government’s efforts.

Additionally, I would have thought that leaving the GIB in public hands would be ideal for the UK Government’s commitments under the Paris Agreement and the commitment to spend 0.7% of GDP on international aid. Having a bank focused on clean energy projects would have been an ideal channel to deploy capital into projects aligned with these commitments.

This year, there were rumours that the sale could be abandoned in favour of an IPO. That appeared to be the preferred option of the second favourite bidder, Sustainable Development Capital. Whether the recent election miscalculation of Theresa May has interfered with it remains to be seen.