10-Year Technology Trends

Keynote/Moderator

Carole BarbeauPresident -

Energy AdvisoryAmericasDNV GL

Ben BixbyGeneral Manager &Director of Energy

Products,Nest

Joe JankoskyDirector for Energy Market

Optimization,Intel

Amar PradhanGlobal Strategy Leader,

IBM

SESSION 4

DNV GL © 2017 21 July 2016 For internal use only

Digitization – The Industrial Revolution 4.0

2

4.0

DNV GL © 2017 21 July 2016 For internal use only

Because of Blockchain - Disruptors at risk of being disrupted ?

3

DNV GL © 2017 21 July 2016 For internal use only

Digitization Revolution

4

Cloud computing

Smart phone

Big Data, analytics (machine learning)

IoT, cybersecurity

AI (deep learning, quantum computing)

DNV GL © 2017 21 July 2016 For internal use only

Smart (sensor) devices

5

DNV GL © 2017 21 July 2016 For internal use only

500B to 1T devices connected by 2025

6

DNV GL © 2017 21 July 2016 For internal use only

Deep Learning mimics the human brain structure and functions

7

Human brain neural network

Deep Learning (Node network)

Machine learning

AI

Deep

Learning

DNV GL © 2017 21 July 2016 For internal use only

AI is a “software that right itself”

8

Biped Learning to Walk Using Evolved Neural Nets (Natural Motion)

DNV GL © 2017 21 July 2016 For internal use only

AI Technologies

9

Machine Learning algorithms Deep Learning algorithms

“State-of-the-Art” technology “Cutting edge” technology

DNV GL © 2017 21 July 2016 For internal use only

Why Deep Learning is so “hot” now ?

10

Amount of data

Perf

orm

ance

Deep Learning algorithms

Machine Learning algorithms

DNV GL © 2017 21 July 2016 For internal use only

Deep Learning + Big Data (Facebook photo) = diagnose of genetic diseases from dysmorphic features

11

DNV GL © 2017 21 July 2016 For internal use only

Speech recognition

12

https://soundcloud.com/user-535691776/dialog

DNV GL © 2017 21 July 2016 For internal use only

HELLO TOMORROW

Nest Labs Confidential

10 Year Technology TrendsDNV Executive Forum • Dana Point, California • May 17, 2017

Nest Labs Confidential

Nest Labs Confidential

Nest Labs Confidential

Nest Labs Confidential

Nest Labs Confidential

Nest Labs Confidential

Nest Labs Confidential

The big problemisn’t that you can’t tweet from your refrigerator

Nest Labs Confidential

Nest Labs Confidential

1946

$6,000,000*

Nest Labs Confidential

7.44 mm

5.29

mm

1995

Nest Labs Confidential

1981

$4,500

Nest Labs Confidential

2001

$549

Nest Labs Confidential

2015

$9

Nest Labs Confidential

2015

$9

25,000

Nest customers has a Works With Nest integration

1 in 5

|

End Device

Thread Leader

Thread Router

Border Router

Thread Link

Network Topology

Nest Labs Confidential

Customers buy smart thermostats for comfort, convenience, and energy savings.

Nest Labs Confidential

Nest Labs Confidential

Key: Shading shows season ending: ● light=25% no longer cooling● medium=50%● dark=75% no longer cooling

HVAC Schedule Tuneup In-Practice: Summer 2016

Oregon Wisconsin

3-5% incremental HVAC savings

Nest Labs Confidential

of qualified customers will immediately enroll in a utility’s connected home program when given the chance.

Source: Based on real results from Nest’s deployment of 12 Seasonal Savings programs in Summer, 2016. % is of eligible customers.

Nest Labs Confidential

… and have 80,000 opt-in on the first day.

You can invite 100,000 customers to a connected home energy program...

Nest Labs Confidential

Custom Thermal Models Personalized Experiences

Nest Labs Confidential

Pre-cooling period

Rush Hour

0 072ºF73ºF74ºF75ºF76ºF77ºF78ºF

1:00PM 2:00PM 3:00PM 4:00PM 5:00PM 6:00PM 7:00PM 8:00PM

Target temperature Indoor temperature

Leakyhome

0 072ºF73ºF74ºF75ºF76ºF77ºF78ºF

1:00PM 2:00PM 3:00PM 4:00PM 5:00PM 6:00PM 7:00PM 8:00PM

Non-leakyhome

House warms up quicklyHouse warms up slowly

Nest Labs Confidential

Pre-cooling period

Rush Hour

0 072ºF73ºF74ºF75ºF76ºF77ºF78ºF

1:00PM 2:00PM 3:00PM 4:00PM 5:00PM 6:00PM 7:00PM 8:00PM

Target temperature Indoor temperature

Leakyhome

0 072ºF73ºF74ºF75ºF76ºF77ºF78ºF

1:00PM 2:00PM 3:00PM 4:00PM 5:00PM 6:00PM 7:00PM 8:00PM

Non-leakyhome

RHR will pre-cool only for a short periodRHR will pre-cool for a full hour

Nest Labs Confidential

Pre-cooling period

Rush Hour

0 072ºF73ºF74ºF75ºF76ºF77ºF78ºF

1:00PM 2:00PM 3:00PM 4:00PM 5:00PM 6:00PM 7:00PM 8:00PM

Target temperature Indoor temperature

Leakyhome

0 072ºF73ºF74ºF75ºF76ºF77ºF78ºF

1:00PM 2:00PM 3:00PM 4:00PM 5:00PM 6:00PM 7:00PM 8:00PM

Non-leakyhome

just before Rush Hour= ready to shed load and preserve comfort

Nest Labs Confidential

0 072ºF73ºF74ºF75ºF76ºF77ºF78ºF

1:00PM 2:00PM 3:00PM 4:00PM 5:00PM 6:00PM 7:00PM 8:00PM

Pre-cooling period

Rush Hour

Indoor temperature

Leakyhome

Non-leakyhome

0 072ºF73ºF74ºF75ºF76ºF77ºF78ºF

1:00PM 2:00PM 3:00PM 4:00PM 5:00PM 6:00PM 7:00PM 8:00PM

Target temperature

Requires multiple cycling eventsRequires one cycling event only

Nest Labs Confidential

0%

20%

40%

60%

80%

100%

1:00PM

Pre-cooling Rush Hour

Projected AC use without Rush Hour Rewards Actual AC use

Nest Labs Confidential

Nest Labs Confidential

0 2 0 0 7 11 3677

157

583

1 2 3 4 5 6 7 8 9 10

How likely are you to recommend Rush Hour Rewards from your utility & Nest to a friend?

53

Reliability dispatchEconomic dispatch

Energy

Collective

Data Access Point Manager

Bundled home/bldg.

services

BYOD

Energy Store

Micro grids

Local SMEs

54

ISG Influence layer

Edge compute layer

Saffron/Nirvana

M2M

AI/M2Mlayer

Customer-engagement platform

Saffron/Nirvana

M2M

Cloud compute layer

AI/M2Mlayer

Edge Devices and Things

Multi-tenant Gateways

PC Hub

Grid-edge Gateways

Visualization

Load Forecasting

Load Optimization

Device

Mgmt./Authentication

Benefits throughout Intel

55

How big is the market?

56

$-

$100.00

$200.00

$300.00

Generation T&D Energy FrequencyRegulation

Spinning Reserve Total Value

Billions / Year

Global Annual Grid Value of IoT Platform Energy Use Cases

Capacity Ancillary Services

$300

$152

$46

$73$16 $11

Connecting devices / loads across residential and C&I buildings

is worth $300 billion in annual value to the electricity system

Be able to choose your own adventure

Amar PradhanGlobal Strategy Leader, IBM Energy & Utilitieshttps://www.linkedin.com/in/amarpradhan/Amar.Pradhan@us.ibm.comMay 2017

IBM 100+ years of innovation

1974Universal Product

Code (UPC)

The Floppy Disk1973

Employee Punch Clock

1889

1936IBM Tabulating

Equipment

The IBM PC1981

Watson2011

2009 Blue Gene

supercomputer

Apple+IBMIBM+Twitter

2014

1972ATM

1954The Hard Disk Drive

SABRE Reservation

System1956

Apollo Missions

1969

2015The Weather Company

Work and Asset OptimizationEnterprise Transformation

Operations InnovationCustomer Engagement

IBM EE&U Solution Areas

We work with clients around the world to transform operations

10of the world’s 10

largest public electric utilities work with IBM

Successful projects completed with utility clients in

55countries around the world

Consumer Technology

Information Technology

Energy Technology

Grid / Operational Technology

Cognitive Computing

Solar PV

Advanced Network Management

Smart Appliances

Wind

Storage

Microgrids

Embedded Micro Processing

Automated Demand Response

SituationalAwareness

Smart Grid/Grid Digitization

ProsumerEnablement

Social Networks

Cloud

Internet of Things

Mobile

Big Data & Analytics

Fuel Cells

Electric Vehicles

Increasing new entrant threat

Incre

asin

g s

ubstitu

tion t

hre

at

CoreBusinessDisruption

Apps

Four types of technology are enabling disruptions:

IBM Confidential

Generation T&DTrading Transmission Distribution Retail

Metering

Generation

Distributed GenerationVPPMicrogrids

Consumption

ElderlyCareHealthcare Energy

Retail

TrafficInformation

AssetAnalytics

Settlement

Optimization

MarketingServices

CustomerIntelligence

SecurityInsurance

M&E

HomeAutomation

FacilitiesMgtEPC

UsageMonitoring

EnergyEfficiency

EnergyAudit

MicroGeneration

EnergyIntegration

DemandResponseGentailer

O&MServices

CommodityGeneratorRenewables VPP

Microgrid

StorageGrid

Manager

GridDeveloper

Mobility

Telco

ElectricVehicles

Metering

Energy DataServices

Forecasting

InformationServices

GridOperations

EnergyExchange(s)

HomeExperience

(B2C)

EnergyManagement

(B2B)

Leaders Will Assume Key Roles in the Energy Integrator Ecosystem

EnergyExchange

Trade Settlers

DER AggregatorsMarket MakerBid Optimizers

Clearinghouse for energy flexibility services

Conceptually “SABRE for Energy Scheduling”, “E*TRADE for Energy IoT”

Pay DER for verified micro-transactions” via some form of metering

Micro-settlement: blockchain

Optimally bid DER into markets for profitability and constraints

Match a given DER, or aggregation of DER, to specific market for a given time period to optimally generate revenue.

Aggregate DER to trade within a clearinghouse

A set of outreach programs and services for device registration, validation, orchestration.

Get energy companies to create markets for DER

Unbundle utility services into markets that can be addressed by DER: identify, incorporate or create markets that value dispatchable load

The Energy Integrator ecosystem is a platform for incumbents to deepen their roles

Key Technologies & Vendors will enable Utilities to assume these New Roles.