The Quantified Other: Nest And Fitbit Chase A Lucrative Side Business | Hacker News Reader

The Quantified Other: Nest And Fitbit Chase A Lucrative Side Business

forbes.com

30 pointsRougeFemme32 comments

If I understand things correctly, what they're basically saying is that the utilities can smooth out energy consumption across the entire grid. For instance, instead of everyone having the AC on for the first 10 minutes of every hour, they can turn 1/6 of the ACs on for the first 10 minutes, then turn those off and turn on the next 1/6 for the next 10 minutes, and so on. If that's the case, then instead of a huge spike (say, 80%) at the top of the hour and a huge dip (say, 10%) for the rest of the hour, the energy usage will be more constant across the whole hour (25% for the whole hour).

This should, in theory, reduce utilities costs in general, which ideally would be passed on to the consumers. And since everyone's Nest thermostat is already turning the AC up for 10 minutes, then the consumer isn't spending/losing any money on this -- they were already doing this, it's just at a different time that helps the utilities companies.

I think that's what they're talking about. It sounds like a cool plan, and a smart way for Nest to make big bucks.

Exactly.

Most utilities already do this, but they have to come out to your house to put a controller on your AC compressor, and have separate infrastructure to communicate load shedding commands to this controller.

Nest (like all startups) abstracts away this pain, while charging based on the value provided (which is enormous, considering the cost of running peaking natural gas generators when demand is at its highest).

EDIT: http://www.nj.com/business/index.ssf/2010/07/peakers_plants_...

"Peakers like the Jersey City plant are extremely expensive to maintain. However, they are considered essential to maintaining the reliability of electricity during heat waves. So, PJM has a way for power plants to be paid for keeping these plants in operation.

It costs ratepayers about $13 million annually for PSEG to keep the plant operational. That cost could vary depending upon how many days of the year PJM decides the plant is available to operate. The more days it’s available, the higher the charge to ratepayers."

My opinion: Intelligent load shedding through Nest-like operations, along with the dramatic increase in wind and distributed solar generation, is going to do away with peaker plants.

Interesting. But I'm surprised this is necessary, I would think that the AC units are already turning on randomly, so that across a whole utility the load would be fairly level just based on statistics. Perhaps there are bigger correlations than I would guess.

Well, as an example, if everyone has their thermostat to kick on AC an hour before getting home from work, you'd expect some clustering around 5pm or so.

You are close, but not quite on point. The issue you discussed isn't really an issue that utilities face under normal circumstances, the law of large numbers tends to take care of that. Utilities typically use these systems to control the load during abnormal usage periods such as during a period of particularly hot outdoor temperatures. By throttling their customers AC usage, they can reduce demand and avoid risking blackouts/grid failures or having to resort to using 'peaker plants' which tend to be older and more polluting (and due to latency requirements, must be kept up and running for the entire peak period, even if they are never needed).

Sounds like there could be a conflict of interest though. The power company makes more money if people use more electricity in general.

Well, not necessarily. The idea being that you're planning to have it kick in at 5:00 for 10 minutes, but in order to smooth out the energy distribution levels, they push it to 5:10 instead, so you're still using your 10 minutes of AC, just at a slightly different time... That's my take on it, anyway.

True, but sometimes there really is just not enough electricity to go around. Consider power outages due to natural disasters or even extreme load on the grid. In Texas, we have a handful of days each summer where the grid is maxed out in the mid-afternoons and ERCOT (Electric Reliability Council of Texas) will come on the radio begging people to conserve their usage. This kind of product could mitigate that. There are also a lot of nuanced things that go on with utilities that influence their decisions: the electricity markets, regulations, issues at plants, industrial users, etc. Us sweating it out at our individual households don't mean a lot to them in the grand scheme of things.

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1. http://techcrunch.com/2014/04/18/nest-uses-its-data-to-turn-...

In Southern Nevada NVEnergy has a similar program. The program offered here is opt-in and basically gives you a discount if you allow them to turn your thermostat up a few degrees a few times a year on very high-demand, "Energy Event" days, or so the marketing material reads at least.

Apparently you can even override the bump-up in temperature if you desire, but I believe you lose some or all of the cost savings if you override it.

They even offer a similar-to-Nest thermostat, free of charge IIRC, called "mPowered" -- it seems to be quite similar to Nest with web-accessible functionality, programming, etc. -- and the price point is obviously much lower.

Good play by Nest and/or Google here IMO, especially since not sharing the user data means the utilities continue to have to pay Nest for the ability to interface with their devices long-term.

FWIW, I strongly suspect it would be similar to the NVEnergy program -- opt-in only, and likely with the ability to override energy events / forced thermostat settings. That said, very intriguing and interesting "pivot" of sorts.

NVEnergy's mPowered - https://www.nvenergy.com/home/saveenergy/rebates/mpowered/in...

NVEnergy's "Cool Share" Program - https://www.nvenergy.com/home/saveenergy/rebates/coolshare.c...

PS - I opted for Nest thermostats, just so convenient and they look incredibly cool on the wall. ;-)

> I strongly suspect it would be similar to the NVEnergy program -- opt-in only, and likely with the ability to override energy events / forced thermostat settings.

That's what it looks like: http://support.nest.com/article/What-is-Rush-Hour-Rewards except it uses your temperature profile to prepare for it, so it might actually turn the airco up earlier before "rush hour". The program is indeed advertised as opt-in and overridable.

I'm not sure if the wording is purposely dubious as to mis-lead the reader, but it's certainly not clear.

"The company has negotiated deals with multiple energy partners in the U.S. Some utility partners are willing to spend $30 to $50 per year and per thermostat to be able to turn the air conditioner up when it’s a hot day. This way, the utility can levels load on the grid. "

At first glance it would appear that the author is saying that Nest will make your air conditioner produce more cold air on a hot day, but the following line contradicts that.

How would it level the load to use more energy? It wouldn't.

I think the actual conclusion, is that Nest is working with energy suppliers to increase the temperature on the thermostat, which will reduce the power used by air conditioners, and that this occurs at peak power usage.

Which will save the nest owner money, the power company money, and make Nest as a company some money.

Moreover, this probably occurs at an imperceptible level to the user, or is done while they are presumably gone. Also the Nest User can turn it back down manually if they are there and uncomfortable.

This is bad sensational reporting.

"the utility can levels load on the grid."

Probably better stated as 'peak shaving' where the utility is lowering the peak (maximum) of its load profile. This pays significant dividends as utilities are required to have a certain amount of generation as backup in addition to the required power.

It would take a significant amount of homes to equal one heavy industrial customer.

I'm pretty sure that the wording is wrong and the author meant that nest will automatically turn the air conditioning down (i.e. let the temperature rise in the house, reducing air conditioning load) - at least that's the information that comes across from the referenced Forbes article.

that's the ambiguity in saying "turn the AC up", do you mean " turn the temperature up" or "make it work harder and cool the house down more"...

i would not be happy at all if i had a Nest and set it to say 78 and the electric company says, "no that's too low, bump it up to 83 or so..."

> At first glance it would appear that the author is saying that Nest will make your air conditioner produce more cold air on a hot day, but the following line contradicts that.

The wording is odd, but "turn the air conditioner up" = "raise the trigger temperature on air conditioning", that is lower the amount of air conditioning. An other option is to spread up- and down- time across users so if everybody wants 10mn of airco per hour, 16% get it in the hour's first 10mn, 16% in the next, etc… instead of everybody being on the clock.

See http://support.nest.com/article/What-is-Rush-Hour-Rewards

From what I understand, they turn the AC on earlier in the day when they know it will be a hot day, which smooths out the peak demand when everyone's AC would have turned on at the same time later in the day.

Does TechCrunch actually have any documented cases where Nest has connected to a customer's thermostat and modified the settings on it? Or are they simply talking in the realm of "we think they can probably do this"?

http://support.nest.com/article/What-is-Rush-Hour-Rewards

Right, and this is a strictly opt-in scheme. Austin Energy partnered with Nest to do this last year, offering customers an $85 rebate as an incentive to help smooth out the spikes in energy use during hot summer afternoons. Austin Energy had actually been doing this before with a less sexy programmable thermostat; they also had a program in which customers would receive SMS messages requesting that they voluntarily reduce energy usage when heavy load was expected.

Increasing energy consumption is a real problem, both in terms of environmental impact and in terms of the power grid itself. A solution that mitigates these problems using attractive consumer technology without requiring significant lifestyle adjustments on the part of those consumers is admirably pragmatic and, in my view, most welcome.

https://nest.com/energy-partners/austin-energy/

http://kut.org/post/meet-answer-texas-air-conditioning-issue...

BTW, per capita energy consumption appears to have peaked in the US and some utilities are even concerned that the combination of flat demand, increasing efficiency, and solar could cause a "death spiral". http://en.wikipedia.org/wiki/Energy_in_the_United_States#Pro... http://www.greentechmedia.com/articles/read/this-is-what-the... http://www.smartgridnews.com/artman/publish/Business_Strateg...

At a glance, this seems fairly useful/progressive. I'd imagine there are plenty of people willing to sacrifice a few degrees of cooling during peak hours to save a few bucks, and this gives them a way to do so.

Of course, these (presumably price-sensitive) consumers will have to buy a Nest to do so.

It is useful, but not particularly progressive. It's typically called "residential demand response". I worked at a company that has been building programs like these for many utilities for a long time. Typically the utility pays for the thermostats (or cheaper equipment attached directly to an A/C compressor) and gives the customers some sort of incentive for participating, like a yearly rebate.

Nest is an interesting entrant into the market because they can come to a utility and say "we already have X of your customers hooked up, you don't have to pay for anything besides the service!" One potential downside is that it is likely the utility will want more of their customers to participate in their demand response program than the number of Nest-owners. Despite its success, the Nest is still a luxury item, and these programs work best at scale. This could make it awkward for the utility to work with another provider, unless Nest is open to partnerships (which they may well be). It's a great play for Nest though, because now they have utilities aligned with their goal of selling more of their thermostats, which is probably really good for marketing.

The ability to remotely control a thermostat has been in place since at least 2006. KCPL for example has had customers who agree to adjust their thermostat downwards during hot days for a certain amount of savings.

The only major change in this instance is Google/Nest making money on it instead of just the utility/customer.

I think Nest is really nailing a pain point for traditional utilities providers and probably can be a great business model for a couple of decades, but to me the future is going to be decentralized.

I say this because the electrical grid in the US is very old and dilapidated and is a constant drain on capital just so that the electricity that is mostly generated by the increasing costs of coal and petro derivatives can flow through it; in the long run, the margins are shrinking (Nest/Google can help slow this rate down).

On the other side, there are multitude of solar alternatives (Micro CSP, photovoltaic, etc) that are powering places now in the US that wouldn't be worth the cost to put on the grid; in the long run, the margins are growing.

We're building a new house next year.

There will be no smart / aware / cloud devices anywhere in the house. There will be no conduit of information from infrastructure pieces out to the world, and different systems will not be interconnected.

There will be physical switches, obvious pathways and islands of simple function. There will be no wireless except for wifi, for computers, which can be disabled site-wide with a single switch.

I want nothing to do with this cloud aware appliance world.

Your opinion might be unpopular here, given the venue, but I agree with it. Social applications and cloud applications are predatory by nature, if not necessarily intent. They exist to make money, and do so by adding (in many cases) unnecessary complexity to processes which don't actually need it.

Not that I have anything against startups making money per se, but I like having locks whose only purpose is to make it harder for people to break into my place and steal my stuff, not to monetize my ability to do so. What Nest is doing may or may not wind up being a net gain in terms of power usage and efficiency, but as with any company, they will optimize for profit, not the convenience or freedom of their users. I just want a thermostat to make the room hotter when I turn the knob, and not possibly break because of a firmware glitch or because of an exploit in their website.

I'm amazed you're getting downvoted for an obvious and sensible set of statements. But I guess it's easier to downvote than articulate a counterargument.

Internet of things systems have terrible security at the moment, and what many such systems presently amount to is people selling a portion of their privacy and exposing themselves to security risks to save a few bucks or have some small marginal household convenience.

You're right that rsync's comment does not deserve a negative score. (I suspect that somewhat overwrought language like "I want nothing to do with" tends to attract downvotes from people who already disagree with the opinion being expressed. But this is about as minor a case as you can get.)

All: when you see a substantive, civil comment that's unfairly faded out, it's good community practice to upvote it back to par. In most cases, users already do. But this practice is more important now that we've made some downvotes more powerful.

When a comment has been downvoted unfairly, simply upvote it and keep your own post focused on the topic at hand. If instead of its first sentence this one had said "I agree", it would be a very good comment instead of a mixed bag.

A simple "I agree" or "good point" is a more effective way to pipe up for a downvoted comment than going off-topic is. Let fair-minded users notice the situation for themselves.

Yes, the security is terrible, but that's not my concern ... that is, I just assume the security is terrible and that everyone understands that ... it's just a given.

The real issue is the complexity of "smart" systems and how that complexity grows exponentially as you connect them together. It's just a rabbit hole you can never climb out of.

Or, in the words of _Normal Accidents_, a book everyone should know well, tightly coupled systems with interactive complexity fail in a predictable way that you should expect. Add some production pressures (perhaps in the form of your wife needing the thermostat to raise right now) and you're sunk.

I was completely sold on the Nest - going to buy it ASAP until I saw the following review and the related discussion: http://www.amazon.com/review/R1KD7Q92LDK4KK/ref=cm_cr_rdp_pe...

Gave me pause. Until Google bought them out, now in the wait and watch mode. Which direction will Google take this?

VCharge is another startup in the Northeast working on the peak-leveling problem: http://vcharge-energy.com/

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