How does smart home technology relate to the deregulation of the Japanese energy market? The answer could lead to a shift in the way energy markets function, and not just in Japan. Energy markets around the globe are considering deregulation, and with that comes the need for energy companies to attract and retain their customers. Japan decided to deregulate its energy market in early 2016, a massive disruption that has expanded the market from nine energy monopolies to over 500 providers in a short period of time.
The Japanese market is generally ahead of the technology curve, with citizens open to adopting new technologies. This makes Japan the perfect place to test smart home technology, something energy companies are using to develop stronger relationships with their customers. Using Intel architecture, energy customers in Japan will now participate in an energy model where they can control the energy used in their homes. This changes the system in some dramatic—and positive—ways.
The Role of the Smart Home
Internet of Things (IoT) devices such as smart thermostats, electric vehicle chargers, motion sensors, and automated lighting make it easier for people to live comfortably, while at the same time helping them conserve energy. A smart thermostat, for example, adjusts to the behavior of the household, heating and cooling the space at the best times. This saves the consumer money and prevents wasted energy.
Oftentimes, customers who use smart technologies are interested in how their home is doing in terms of things like energy use. The information provided by smart devices can educate them not only about their own habits, but also call attention to potential maintenance issues. Building relationships with these customers can be a positive thing for many energy companies. It can help them become an end-to-end solution provider, something potentially desirable to consumers.
Intel’s Energy Collective Optimization (ECO) Platform
Intel is playing an important role in the Japanese energy market by helping the industry create and connect with smart homes. To help solve the challenges the industry is facing, we started by focusing on building an architectural reference standard for smart home technology that utilities can use. Now, Intel gateway hardware will be installed in millions of homes to connect smart home IoT technology with the energy grid.
The Intel technology, called the Energy Collective Optimization (ECO) Platform, will be deployed by the three largest utilities in Japan, which combined serve approximately 40 million customers. The hardware will be installed in homes at no cost to customers. These customers will then pay subscription fees for the services they use.
For the energy market, the value of this setup is significant, amounting to an estimated $200 per home each year. The value comes from real-time load balancing, where customers have the ability to adjust demand in response to fluctuating energy prices. We expect this system will help develop more engaged, loyal consumers, while at the same time helping energy companies handle demand and optimize their grids.
Intel’s role as a distributed grid architecture provider is growing. We’re excited to participate in these changes to the energy industry and have plans to launch the ECO platform in other international markets in the coming months. Soon we’ll see smarter homes, smarter consumers, and more competitive energy providers around the globe.
Intrigued? Read more about Intel’s work in the energy industry, smart home adoption, and how utilities are engaging with customers via smart home technology.