Smart Home Market Study for Iberdrola Drivers, State of the Art, Benchmarking, Business Models and Proposals Andrés Prieto Buznego Thesis to obtain the Master of Science Degree in Energy Engineering and Management Supervisor: Prof. Manuel de Arriaga Brito Correia Guedes Examination Committee Chairperson: Prof. José Manuel Costa Dias de Figueiredo Supervisor: Prof. Manuel de Arriaga Brito Correia Guedes Member of the Committee: Prof. Luis Manuel Alves Dias November 2017 Acknowledgements I would first like to thank all my Entechs who have been an example of knowledge, passion and multiculturalism. Thanks to the Save to Donate team and Iberdrola’s Innovation Department for making this MSc Thesis possible. They allowed this paper to be my own work, but steered me in the right direction whenever I needed. I would like to offer my special thanks to my Canadian flatmates Sarah and Marco for hosting me while writing this thesis, my family because of their continuous support and Anna for always being there for me. I would also like to acknowledge the professors and staff members from both, Karlsruhe Institute of Technology and Instituto Superior Técnico de Lisboa, for being part of this EIT Innoenergy Masters program and betting for the future of the Energy sector. I am also grateful for Valerie’s help as a second reader and for my professor Manuel Guedes, both always willing to help. 2 Abstract Iberdrola is well-positioned to embrace the growth of the Smart Home market, which is expected to reach 16.1% of Spanish households by 2021. This paper examines the main factors, technologies, main players, start-ups, and current business models in the Smart Home market with a focus on the energy management area which most interests the Spanish utility. The paper highlights the drivers for customers and Iberdrola, studies the market forecasts, compares different solution providers in a benchmarking study and presents the different business approaches the market players are taking. Finally, the paper offers four different positioning proposals for Iberdrola. These proposals use an incremental approach and build on already running projects in Hardware retail, Service-tariffs and Data including Smart Electric Vehicle charging stations, Disaggregation using the data from the Spanish households’ Smartmeters, Smart Solar for neighbour communities and Demand Response using HVAC systems from office buildings. Keywords: Smart Home, Iberdrola, Market Study, Benchmarking, Proposals Portuguese Abstract Iberdrola está bem posicionada para abraçar o cresimento do mercado das Smart Homes, que espera alcaçar o 16.1% das casas espanholas antes de 2021. Este documento examina os principais fatores, tecnologias, players, start-ups e modelos do negocio atuais no mercado da Smart Home com foco na area de Energy Management que é o mais interessante para a empresa elétrica española. O documento destaca os pricipais fatores para clientes e para Iberdrola, estuda as previsões do mercado, compara diferentes soluções em um estudo de benchmarking e mostra as diferentes modelos de negócio que os players do mercado estão a tomar. Finalmente, o artigo oferece quatro propostas de posicionamento diferentes para a Iberdrola. Essas propostas usam uma abordagem incremental e baseiam-se em projetos já executados em varejo de hardware, tarifas de serviço e dados, incluindo estações de carregamento de veículos elétricos inteligentes, desagregação dos Smartmeters das famílias espanholas, o Smart Solar para comunidades dos vizinhos e a Resposta de Demanda usando sistemas HVAC dos prédios de escritórios. Palavras-chave: Smart Home, Iberdrola, Estudo de mercado, Propostas 3 Table of Contents 1 Introduction......................................................................................................................................................... 13 1.1 Approach for Innovation ............................................................................................................................ 15 2 Smart Homes Drivers ........................................................................................................................................... 16 2.1 For customers ............................................................................................................................................. 16 2.2 For Iberdrola ............................................................................................................................................... 22 2.3 Evolution of the Smart Home ..................................................................................................................... 26 3 Growth scenarios ................................................................................................................................................ 29 3.1 Market structure scenarios ........................................................................................................................ 32 Large Ecosystems ................................................................................................................................................ 34 Scattered solutions .............................................................................................................................................. 35 4 Technology and state of the art of Smart Home and Energy Management ....................................................... 36 4.1 Products and services usually offered ........................................................................................................ 38 Smart Home Energy Management ...................................................................................................................... 39 Smart Home Energy Products ............................................................................................................................. 40 4.2 System architectures .................................................................................................................................. 47 4.2.1 Smart Home System Architectures ........................................................................................................ 47 4.2.2 Network technologies ............................................................................................................................ 49 4.3 Solar PV and Energy Storage for households. ............................................................................................ 51 Solar PV ............................................................................................................................................................... 51 Battery Storage technology ................................................................................................................................. 53 4.4 EV charger................................................................................................................................................... 55 4.5 Demand Response in Spain ........................................................................................................................ 57 Demand response in other Iberdrola markets .................................................................................................... 58 Demand Response potential for Iberdrola and the Smart Home. ...................................................................... 58 4.6 The data in the Smart Home....................................................................................................................... 60 4 4.7 Disaggregation ............................................................................................................................................ 61 5 Analysis of leading solution providers ................................................................................................................. 62 5.1 Utilities........................................................................................................................................................ 63 5.1.1 North America ........................................................................................................................................ 64 5.1.2 Western Europe ..................................................................................................................................... 69 5.1.3 South America (Brasil) ............................................................................................................................ 75 5.2 New Digital Players (ITs) ............................................................................................................................. 75 5.2.1 Amazon .................................................................................................................................................. 76 5.2.2 Apple ...................................................................................................................................................... 76 5.2.3 Google .................................................................................................................................................... 77 5.2.4 Samsung ................................................................................................................................................. 78 5.2.5 Foxconn .................................................................................................................................................. 79 5.3 Telecom and Cable Companies..................................................................................................................