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Podcast S16E06

Home energy management – a game of interoperability

Remote home control system on a digital tablet.

Imagine a future where devices in our homes like heat pumps, batteries and electric vehicle charge points talk to each other and work out when to operate in response to the changing needs of the distribution network, the electricity system, and the intraday markets. How can we move towards this, from our current situation of having lot of closed systems that don’t communicate with each other? Jon Slowe discusses this question with LCP Delta experts Arthur Jouannic and Zuoxiang Zhang.

Episode transcript

[00:00:05.980] - Jon

Hello and welcome to the episode. Imagine a future where our devices in our homes, like heat pumps, batteries, electric vehicle charge points, seamlessly talk with each other and work out when to operate in response to the changing needs of the distribution network, the electricity system, the intraday markets and so on. Sounds fantastic. And I think that's the world that we're heading to. But it's quite an ambitious world and quite a complex world. And one of the big challenges at the moment is a topic that we refer to as interoperability. A bit of a mouthful. So the challenge being that in my house, for example, I've got a heat pump and electric vehicle charge point, don't have a battery yet, got photovoltaics. And at the moment, I have a system where home energy management device can effectively talk to the photovoltaics and the electric vehicle charge point, but it can't talk to the heat pump at all. So the devices I have are not interoperable. So can we get from today's world, where we've got lots of closed systems that don't communicate with each other or don't speak the same language, to a new world where everything speaks the same language and communication flows seamlessly from the electricity system to homes to buildings to devices?

 

Well, to explore this question, I'm joined by a couple of LCP Delta experts, Arthur Jouannic and Zouxiang Zhang. Hello, Arthur.

 

[00:02:00.500] - Arthur

Hi, Jon.

 

[00:02:01.670] - Jon

And hello, Zuoxiang.

 

[00:02:03.230] - Zuoxiang

Hey, Jon.

 

[00:02:04.580] - Jon

So, to frame the discussion, Zuoxiang, I'm going to use a cartoon that you've used. I think so I have to describe it being a podcast, but it's quite a simple cartoon. You've got two people talking saying we've got 14 different competing standards. At the moment, that's a problem. I don't know if we've got 14. Do we have 14 Zouxiang? I don't know if we have 14 amongst home energy management, but we've got lots.

 

[00:02:36.750] - Zuoxiang

We have more than that.

 

[00:02:37.820] - Jon

More than that. More than 14. Okay, so these two people say, okay, the solution, we need a common, unifying standard that can work for everything outcome. Instead of having 14 different standards, we have 15 different standards because the course of 14 don't disappear and the 15th competes for the 14. Zouxiang, how accurate is that, that cartoon that I've just described, does it sum up where we are at or is it a bit pessimistic?

 

[00:03:10.810] - Zuoxiang

Yeah, I think that is basically the story happening in this industry because think about home energy management is such a cross cutting topic, where you have heating appliances, your EV charge point, your solar PV and batteries, many, many different assets installed at home, and you got platform from the OEMs of those products, platform of some management systems managing those assets. You also got some platform from your energy providers trying to manage those products. And think about all of those systems using a different way of controlling the products, and different products needs a different language to control them. So it's really difficult to convince everyone to use the same language, which was proposed by the previous 14 and the new 15 association to connect those products. And that's really the reality today, that we cannot find one single standard to connect everything.

 

[00:04:17.030] - Jon

So can we think of it a bit like different languages? So if I'm trying to communicate with four different devices in the home, one is speaking Japanese, one is speaking Arabic, one speaking Norwegian and one speaking Spanish, for example, so how can I communicate with all of them?

 

[00:04:35.480] - Zuoxiang

Yeah, so in the home management world, Japanese can be like open term for boilers, germany can be, let's say, OCPP for EVs. So that's exactly what we can have everyone speak different language in the real world.

 

[00:04:56.550] - Jon

Arthur, you've been working on this topic for years and years and years. Are you frustrated? Do you see progress?

 

[00:05:04.580] - Arthur

Yeah, ten years, actually. I've been frustrated in the past. Now I'm just conscious - we need to find other ways to make the market grow. Frankly, I don't see any progress. I see a lot more companies active in this space, which is good, but often manufacturers of products have the same mindset. If I can protect my ecosystem, my role, then why would I share anything with others? And would that make me lose market share, for example? And also there is data in that there is services I can create, so why won't I do that myself? Often these companies are not able to do that at all, or the speed at which it's required. And therefore the decision to stay closed means that the market actually will not grow as fast as it could. So, knowing this, I am partly frustrated, but also I'm realistic and I know that we need other things to happen. There are other organisations trying to find common protocols. It's good for energy in Europe, I'm not really sure, but the market is growing very rapidly right now. Sometimes governments have tried to make things happen and it works partly. So potentially it should be the work of public organisation to force certain protocols or doing things certain ways.

 

But right now, I don't see that happening. So the market will just grow organically and interoperability will remain the biggest barrier.

 

[00:06:39.000] - Jon

And does that mean the vision I described at the beginning is we can forget about it and throw it out the window? Or does that mean that vision is still achievable, even if I've got all these different protocols? But it's going to be harder to make it work because you need translators.

 

[00:06:58.650] - Arthur

Well, the analogy with language is really good, but if you're the market leader in, let's say, batteries in Germany, so you have a 50% market share, for example, why would you want anyone to speak your language and potentially be compatible with you and your competitors? Well, instead of that, because you're the market leader, you have the power to say you guys have to work with me and work with my private protocol, which by the way, you have to pay for the integration rather than opening up to everyone. And the problem in Europe is that the market is so fragmented across every country, even within a market with different types of products, which means that there is no incentives for the bigger players to open up and to speak another language, basically to make the effort to and to risk losing market share. And that's the real issue.

 

[00:07:47.750] - Jon

So I understand that what you just described, can a translator get around that problem? So it means more work, it means maybe some reverse engineering, it means an extra device in the home, a gateway device for example, that can unpick these different languages. Is that the way that the market is trying to orchestrate or coordinate all of these devices at the moment?

 

[00:08:18.380] - Zuoxiang

Yeah, I think the situation is changing today we are being asked by large OEMs whether they should open a system or not and how to open it. I think, like Arthur said, the world is so scattered, so there are many different OEMs there in the market. If there are some new value streams suddenly become interesting in the market, like energy cost savings, like flexibility services which you can provide more value to the end users, but it can't be achieved that you only allow them to use your proprietary protocols because everyone could have different products from different brands. So it's impossible to always use your proprietary protocols to connect every product. That's why we think that gradually there will be some third party, for example Integrators trying to combine, make the products more and more compatible. Or we think to make things easier, there could be some open protocols come to the market to help achieve the interoperability for products from different brands to be able to access those additional data streams today.

 

[00:09:36.150] - Jon

Okay, so Pragmatic approaches Integrators, which is doable but hard work, but a much better solution would be common languages. As the analogy I've used to make all of this much simpler, I think. Is it fair to say that there are pockets of progress? So if I think of electric vehicle charge points in the UK for example, they will have to follow a certain standard now, does that help?

 

[00:10:10.350] - Zuoxiang

Yeah, I think so. I think since the electrical vehicle standards come out in the UK and then I think there is another ISO 15118 standard for V2G also came into it I think a few months ago. All of the EV charge point and EV companies are talking about of those two standards. And you can definitely see how powerful these kind of initiatives can achieve in every market. And we do think that that could be copied to some other markets as well, apart from the UK.

 

[00:10:49.880] - Jon

Arthur I guess that's an example from what you were saying of government intervening and saying, okay, here's a standard that everyone has to work to. You can achieve that standard for whatever way you like, but you have to be able to communicate in this way.

 

[00:11:04.590] - Arthur

Yeah, absolutely. I don't think the market will dictate standards, and we are 100% sure of that. Even with Matter now, which is a protocol being launched by Google, Apple, Amazon and the likes of the big giants of the tech industry, these guys are trying to force other companies to use the protocol because they have so much power. But when you look at pockets of applications such as EV charging, heating management, et cetera, the companies activities, they don't need Apple or Google to help them. They are not pressurised by these guys. So will they be using these protocols? I don't think so in the short term, and that's not going to affect anything in terms of penetration of technology. So regulations could actually have a huge impact on that. Problem is our European governments align on this with the different regulations in every country. Manufacturers are active in pretty much all over Europe. So do you need to adapt a product for your country? I think to be something at the European level in order to achieve through interoperability. And as far as I understand by talking to people in the market, we couldn't be as far from that result today.

 

And that's a big concern I have for the market.

 

[00:12:20.630] - Jon

Okay, let's come back to Matter - this Google Apple Samsung standard and in a minute, just taking this electric vehicle charge point standard, that's the UK standard. So step one is the UK. Step two would be to make it a European standard. Step three would be to say it's not just concerning electric vehicle charge points, it’s the same standard for a heat pump as well as an electric vehicle charge point. Zuoxiang, is that the sort of thing you think that would help and unlock a lot of the flexibility and home energy management value streams if that happened?

 

[00:13:02.120] - Zuoxiang

Yeah, definitely. Because that is the final picture we want to see for home energy management interoperability. But even let's come back to the IoT smart home protocol, matter, even though there are so many large companies joining these joint force in terms of creating a new protocol, we're still seeing that they are also struggling to involve all different types of companies. They do have some HVAC companies there, but in terms of home energy management, they do need more PV companies, EV companies and some other energy players.

 

[00:13:42.230] - Jon

Okay, so for our listeners that might not have heard what Matter is, that was a recent announcement. Can you summarise who announced it when it was announced what it is? Zuoxiang in a nutshell.

 

[00:13:55.370] - Zuoxiang

Yeah, so maybe five years ago, smart home industry is the same situation as the home energy management industry today. They are also looking for a solution for interoperability and now they have an answer, which is called Matter. It is proposed by a few large players in the smart home IoT industry, including Amazon, Google, Apple, Schneider Electric, a lot of big names, you can name them. And the aim of the protocol is really to achieve interoperability, to improve security and to facilitate the integration of different smart home products in the market. So far, they're really focusing on home automation. So we can think about smart lights, security, doorbells, et cetera. But we think that they're also developing some use cases for energy as well. That's why that's interesting for home energy management.

 

[00:14:56.900] - Jon

Okay, so it probably will start with things like a smart doorbell, talking to a security system, talking to shutters, for example, smart shutters, and enable more seamless communication between these different devices, regardless of whether it's a Google product or Samsung product or Schneider product. OK, but let's start to look forwards a bit now. Now, Arthur, you said you were pessimistic. Do you see any grounds to be optimistic when you're talking with companies, when you're hearing what the different OEMs, the different technology companies are thinking around energy? Are people talking about this question? Are they thinking about this question at the moment?

 

[00:15:48.530] - Arthur

So I would say that everybody nearly involved in this space is talking about this question. That's top three, I guess, on the agenda of the board of companies to be able to grow. I don't see any evidence of that issue being possibly sold in the next three to five years at scale and with a significant impact on saving energy for customers, on saving carbon emissions, therefore, on optimising self consumption, on optimising damage tariffs, et cetera. And that is because you have hundreds of companies involved in this space between EV charge points, PV, et cetera. And all of them have different strategies, all of them are different levels of understanding of interoperability, have a different number of tech people working on it to make hundreds of companies from Europe, China, US, Korea and other places to work together in the community for the benefits of home energy management in Europe. I don't buy it, clearly, and I've been working in space for a long time. I don't see that happening. Matter could have been the thing that helped, but so far when you talk to local companies in Italy, Spain, Germany and Netherlands, there is no interest to do something like that.

 

It's not going to help them in the short term. There is no strategy for five to ten years.

 

[00:17:13.400] - Jon

So Matter is a global standard, presumably between global giants, whereas that's one of the challenges here. Energy markets are national markets. If you look at a global level, they're highly localised markets. So we might have a standard in the UK for electric vehicle charge points. So I can understand why Matter is going to focus on doorbells and security systems, for example, and lights, which can be done globally.

 

[00:17:49.050] - Arthur

The Alexa speaker or the Google home works the same in the US as in Europe, you know, so for them it makes sense to make these devices work with each other. But as you say, the heat pump in the middle of Switzerland, will it work the same as your air conditioning in the south of Spain? And is it the same brand, is it working the same way? Market conditions are different, temperature are different, people are have different cultures and that's something that global giants don't have a short term interest in and that's why we don't believe, I don't believe the impact will be huge in the short term at least.

 

[00:18:25.610] - Jon

So I don't know, you're either a pessimist or a realistic Arthur!

[00:18:36.530] - Arthur

I am an Analyst!

 

[00:18:37.530] - Jon

Zuoxiang. Any differences in how you think?

 

[00:18:39.530] - Zuoxiang

I guess I'm also very fact driven, but driven by there are more and more interesting questions and attention being paid to the home energy management market nowadays. I think because more and more companies are interested in this market, they see the value of creating either monetize or none of the value for the homeowners. I think there will be more efforts to be put to address this problem. I think in the very near future, two or three years this might be partly solved, this problem of interoperability. So within each market the government really want to solve the energy bill, increase the problem. They might have set up some standards to standardise the residential flexibility, for example EV charging management and now Matter, the protocol we’ll come to this protocol again, is trying to standardise this smart home interoperability and I guess everyone is also watching this protocol and see how it could succeed in this market and if it can really achieve this kind of success in the smart home market. I think some of those energy players like Schneider, like Samsung could also apply the same approach to home energy management in the future. So I might be a bit more optimistic for let's say five to ten years. There might be similar things happening in home energy management.

 

[00:20:17.660] - Jon

OK, well, we'll get the crystal ball out in one sec. So you see pockets of progress and coming back to this job of integrators. Integrators are still going to have to do a lot of the heavy lifting, be it through a gateway device in the home, be it through going through APIs product by product if manufacturers are opening up their APIs. So there's a lot of legwork to do to be able to orchestrate a number of different devices in the home until we get to that. So let's get out the talking new energy crystal ball. If I set the data three years - 2025 I think you've both made your views clear, so let's go further into the future and I'm going to set the dial ten years into the future now to 2032. Will we be much further forward in ten years time? So how close will we be to that vision I set out right at the beginning of the podcast of someone in the energy sector being able to seamlessly communicate and orchestrate a battery, a heat pump, an EV charge point, a hot water tank, washing machine even in the home, or will we still be have this patchwork of some national standards and a lot of legwork around the integration to be done?

 

[00:21:56.250] - Jon

Arthur let's start with you and then Zuoxiang you.

 

[00:22:00.450] - Arthur

The main issue I see with the energy appliances in the home is that they have a lifetime of ten to 2025 years. In the next ten years, especially in the next two or three years, we will see a lot of homes equipping themselves with low carbon solutions like heat pumps, like PV, et cetera. And this system installed in the next few years won't be ever, I think, compatible with other products, because once they are installed, it's the way it is for most of them. So in ten years time, maybe then the new products installed will start to be widely interoperable with other products. There is a chance I can't say for sure. I'm not too optimistic about it, I'm not too pessimistic about. But what I know is that in the next ten years, the products being installed in the homes won't be as interoperable as they should be.

 

[00:22:53.960] - Jon

So the integrators will have lots of work over the next ten years and beyond the next ten years, with all of the products and devices that are going to be installed over the next ten years.

 

[00:23:04.880] - Arthur

Integrators or closed ecosystems, potentially. And that's the risk that we don't want to see.

 

[00:23:10.280] - Jon

Okay. Thanks, Arthur. Zuoxiang - 2032.

 

[00:23:15.300] - Zuoxiang

Yes. Actually, this time I'm aligned with Arthur. I will put this question down to two separate questions. Will there be one single open protocol connecting every product together? I think 50/50, because it really depends on how the industry reacts to the energy crisis, to how success now the smart home protocols, how it could be so hard to predict. So I would say like 50/50. But will there be an approach to achieve interoperability? I would say 100%, because I think in the future there will be more and more OEMs working with integrators to find an approach to connect their products to each other. So they might not be talking in the same language, but someone putting the effort there, trying to like a third party, trying to make sure they're compatible, being used for home energy management, so that will be my answer to that.

 

[00:24:26.960] - Jon

Okay. And I think Zuoxiang, we're already seeing the signs of that, aren't we? We're seeing integrated, successfully communicating with different brands in homes. It requires work and effort, but it can be done and is being done.

 

[00:24:41.030] - Zuoxiang

Yeah, definitely.

 

[00:24:43.430] - Jon

Okay, so the vision I described at the beginning, then if I take out the word seamlessly out of that vision, then I think that vision is still alive and kicking. And in fact, it's not just a future vision, it's something that is being done more and more at the moment. So I think we can look forward to a future where devices in the home are optimised, even if they are from different brands, different manufacturers that don't speak the same language. But there's clearly a job to be done, both by integrators in the short term and by the wider industry in getting to that common standard, common language as quickly as we can. Arthur, Zuoxiang, thanks very much for sharing your expertise and your thoughts. I feel we've gone right down into the nitty gritty issues in the energy transition today, but a critical issue if the transition is to happen as quickly, as effectively and in and most cost effectively as it can. Thanks, everyone, for listening. Hope you enjoyed the podcast and the discussion and look forward to welcoming you back next week. Thanks and goodbye.

 

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