entrepreneurship forum: dr. jay taneja, senior research scientist at ibm research - africa
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Entrepreneurship in Energy and Energy Efficiency: Opportunities, Pitfalls, and Successes, in Kenya and Beyond
Dr. Jay Taneja Research Scientist
IBM Research – Africa taneja@ke.ibm.com
© 2015 International Business Machines Corporation 2
Outline of Today’s Talk
• Background on energy and key concepts
• Electricity supply in Africa
• Important trends in the energy industry • Energy entrepreneurship – pitfalls, opportunities, and examples
© 2015 International Business Machines Corporation 3
Energy and society
• A critical input to growth and prosperity
• �The electric grid is the most significant engineering achievement of the 20th century�
• An old and slow-moving industry – primed for disruption by IT
• Enormous investment happening on the continent (USAID Power Africa, etc.)
• A key driver of climate change – how can we improve energy access and quality while avoiding catastrophic climate change?
– China and India adding on average four coal plants per week – U.S. consumes 20%+ of oil, but has only 4% of world’s population
© 2015 International Business Machines Corporation 4
Some useful jargon and concepts in energy
• Energy vs. Electricity • Energy (Joules/kWh), Power (Watts), Current (Amps), Voltage (Volts), Frequency (Hz) • Electricity: Alternating Current vs. Direct Current • Renewable vs. Non-renewable • Energy efficiency and energy conservation • Smart grid vs. Not-so-smart grid • Smart meters / Advanced Metering Infrastructure (AMI) • On-grid vs. Off-grid, electrification • Urban and rural
© 2015 International Business Machines Corporation 5
5"
Baseline(+(Dispatchable(Sources( Oblivious(Loads(
Communica+on"
Non9Dispatchable(Sources(
Communica+on"
Supply9Following(Loads(
Transmission"Genera+on" Demand"Distribu+on"
Towards an aware/smart electricity infrastructure
(Source: David Culler)
© 2015 International Business Machines Corporation 6
How is electricity produced in African grids?
0%
20%
40%
60%
80%
100%
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
% o
f Ele
ctric
ity S
uppl
y
NuclearCoalNatural GasRenewablesOil/DieselHydro
0%
20%
40%
60%
80%
100%
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
% o
f Ele
ctric
ity S
uppl
y
NuclearCoalNatural GasRenewablesOil/DieselHydro
Kenya Nigeria (Source: The World Bank)
© 2015 International Business Machines Corporation 7
Rural and urban electrification disparity
!20$30%!electri-ication!in!Sub$Saharan!Africa!(~600!million!lack!
access);!rate!varies!by!country!and!by!source!!
!Challenges: low
population density, varying fuel costs, grid
connection costs, demand outstrips supply
Rural Electrification Urban Electrification
© 2015 International Business Machines Corporation 8
An industry view: the electricity ecosystem in Kenya
(Source: Henry Gichungi, KPLC)
© 2015 International Business Machines Corporation 9
Trends in energy and electricity
• The rise of natural gas and renewable generation • Emergence of demand-side grid resources • Enormous fluctuations in oil prices • Big investment into more generation, but for whose gain? • African grids not expanding quickly enough to improve access • Plummeting cost of solar and associated installation costs • Solar home systems powering AC and DC appliances • Batteries becoming affordable, and replacing diesel • Potential for microgrids for increasing electricity access and reliability
© 2015 International Business Machines Corporation 10
Scaling of technologies
(Source: Arun Majumdar)
© 2015 International Business Machines Corporation 11
Outline of Today’s Talk
• Background on energy and key concepts
• Electricity supply in Africa
• Important trends in the energy industry • Energy entrepreneurship – pitfalls, opportunities, and examples
© 2015 International Business Machines Corporation 12
What is a startup?
Definition: A startup is an organization formed to search for a repeatable and scalable business model.
“Success consists of going from failure to failure without loss of enthusiasm.”
Winston Churchill
(Source: Steve Blank - http://steveblank.com/2010/01/25/whats-a-startup-first-principles/)
© 2015 International Business Machines Corporation 13
Data Sources
• Power Meters
• Mobile Phone Chargers
• Reservoir and Power Data
(Kenya)
(Source: Javier Rosa, UCB)
Problem: electricity outages
• Spatiotemporal distribution, driven by power shortages, weather, operations, more?
• Predicting outages is difficult, predicting outage risk may be more realistic
• Benefits: Guide utility upgrades/repair/maintenance, inform consumers of outages
© 2015 International Business Machines Corporation 14
‒ API!for!change!in!power!state!(BatteryManager)!‒ GPS!for!localization!‒ Accelerometer/microphone!for!false!positive!detection!‒ Microphone/API!for!AC!mains!detection!‒ Smart!meter!bene-its!at!a!fraction!of!the!cost!
!!
Smart Phones
Possible solution: collecting outage data from mobile phones
© 2015 International Business Machines Corporation 15
Potential business models
• Sell data to utilities – Pros: Simplest business model – interested in reducing operations cost and improving service – Open questions: How to distribute software? Why will end users install? What extent of coverage?
• Sell predictions to electricity consumers – Pros: More potential customers, possible benefits from network effects – Open questions: To whom – residences, businesses? Are outage predictions useful? What is the benefit
of using phones over existing products?
• Sell predictions to telcos/tower companies – Pros: Huge consumers of energy with potential to optimize, could partner to sell data to utilities – Open questions: Are outage data already in use at tower sites – can this be done in software? How does
maintenance work?
© 2015 International Business Machines Corporation 16
‒ API!for!change!in!power!state!(BatteryManager)!‒ GPS!for!localization!‒ Accelerometer/microphone!for!false!positive!detection!‒ Microphone/API!for!AC!mains!detection!‒ Smart!meter!bene-its!at!a!fraction!of!the!cost!!!
Smart Phones
Feature Phones
‒ Single$use!device!plugged!in!with!no!battery!‒ Localization!done!a"priori"‒ Dedicated!application!periodically!reports!presence!‒ Absence!indicates!power!outage!‒ Introduced!after!-inding!“holes”!in!smartphone!monitoring!
Possible additional solution: not only smartphones
© 2015 International Business Machines Corporation 17
Pitfalls
• Not understanding your customers • Improperly identifying your competitors • Not considering competitive advantages • Taking too long to test an idea, or failure to measure your tests • Focusing on the wrong opportunities – too little impact or too small of a problem • Devices – challenges of manufacturing, maintenance, and cost • Crowdsourcing – challenges of bootstrapping, incentivization, and data quality • Partners – challenges of motivation and competition
Trust (your intuition) but verify (its relevance and scale)
© 2015 International Business Machines Corporation 18
Energy + IT startup examples
(Ukraine) / (Brazil) – uses single hardware device to monitor residential mains electricity, discerning all individual appliances and recommending conservation/efficiency measures
(USA) – collaborates with utility to monitor customers’ smart meter data to recommend conservation/efficiency measures
(USA) – uses Bluetooth-enabled sensor connected to car OBD-II port to provide driver feedback for improving acceleration and braking habits
(USA) – connects officeworkers to building climate management systems entirely via software to improve comfort and reduce energy
© 2015 International Business Machines Corporation 19
Nest: Learning occupant patterns in the home
• Introduced in 2011, Nest is a �learning thermostat� • Includes WiFi and sensors for temperature and motion • Learns models of room and home heating, user patterns,
and energy costs • Improves heating performance and reduces energy spent
with more experience • Incorporates lessons learned from millions of thermostats • Sold to Google in January, 2014, for $3.2bn
Energy and IT startups have real value.
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