Since its beginning, the energy industry has been centralized. That may have worked when coal was king, but as more people and companies generate their own renewable energy by wielding the power of the sun, wind, and water, that traditional model is crumbling right along with our power grid.
Decentralizing the industry is key to mainstream adoption of renewable energy sources, which is why the theme of the Cleantech Forum San Francisco 2015 was “Cleantech Meets the Cloud: The Emergence of Cleantech-as-a-Service.”
“We’ve got three [major trends],” said Cleantech Group’s CEO, Sheeraz Haji in the opening keynote on Tuesday. “The tipping point [we’ve reached], the data explosion, and personalization of energy, which is really changing industry from centralized to decentralized.”
To do so, it means turning the model on its head. Fortunately, that can be an opportunity for cleantech-as-a-service — and for startups, investors, and tech companies — because of big data and the Internet of Things.
The Cleantech Group offers events and advisory services to connect businesses with cleantech know-how: things like water management, renewable energy, and electric vehicles. They also have a web-based platform called i3, which allows startups, corporations, and investors to connect.
In the opening keynote, KR Sridhar, co-Founder and CEO of Bloom Energy — which made a power generator that uses solid oxide fuel cell technology to turn fuel into energy — discussed the importance of personalizing energy, finding unmet needs of people, and meeting them by turning cleantech into a service industry. Connecting people to personalized data is key because traditionally, people haven’t had much of a connection with their utility service provider or energy usage.
“Any service industry, for [it to last a] long time, for it to sustain and build itself, it requires differentiation and personalization,” Sridhar said.
What we’re seeing in the cleantech industry is similar to the growth of software-as-a-service and the mobile phone industry, where you paid for minutes as you used them. Sridhar said he likes that model because it incentivizes people by connecting them with exactly what they’re using energy for. Offering a service model from end-to-end and offering differentiation means driving efficiency.
“Anything done efficiently in that process, the money you save, it trickles to the bottom line. It becomes aligned with what the customer needs, what the environment needs,” he said. “It becomes a very powerful model.”
It’s the early days in the industry still, and much like with the personal computer and the cell phone, it’s about bringing the cost down in the industry. That’s starting to work — solar PV prices, for instance, costed about $8-10 per watt in 2005, but now it’s about $3 per watt. In some areas in California, solar is 20% cheaper than the traditional power grid.
It’s also about the growth and cost reduction of other devices, like sensors and tools for various sectors of the industry — from agriculture to oil and gas to renewable energy. Collecting data has always been important in all areas of the energy industry, but being able to do things in real-time or based on events is changing how the industry runs.
“What’s coming next is these groups are going to operate as a system, and that’s where I think we’re going to see the opportunities,” said Pat Kennedy, founder and CEO of OSIsoft, which provides software to connect sensor-based data.
With the Internet of Things, the scope of information is becoming much wider. That is incredibly important for driving efficiency and sustainability as the population races toward nine billion people by 2050, food production has to ramp up, and climate change presents us with many new challenges.