Centrica smart home

Centrica dives deeper into the smart home

Smart home offerings are growing but how can consumers be encouraged to adopt them?
Published: Fri 01 Mar 2019

While the smart home has been slow to take off companies such as Centrica and its subsidiary British Gas have been leading the way in steadily building up a portfolio of energy offerings that can form the basis. As far back as 2013 British Gas launched the Hive smart thermostat for heating and hot water control, which has developed into an expanded range of products with more than 1.6m sold in the UK, Ireland and US by 2017.

In 2015 British Gas acquired the UK smart home startup AlertMe, opening the way for connected home offerings. Then in 2016 the portfolio was supplemented with another UK startup acquisition, FlowGem, with technology to remotely detect water leaks.

Now Centrica is further expanding the scope of this activity with investments in another two startups, Munich-based GreenCom Networks and the University of Oxford spin-off Mixergy.

“These investments are an important step forward to a time when Internet of Things (IoT)-enabled technology in the home will operate as a single unit to ensure that energy is used in the most effective way,” says Sam Salisbury, Director of Centrica Innovations Labs. “Central to [home energy management] will be an offer to customers that will deliver a greater variety of choice depending on whether their priority is warmth, price or the environment.”

Smart home energy management

GreenCom Network established in 2011 has developed an IoT platform for the delivery of new energy services such as flexibility.

Mixergy has developed an intelligent hot water system combining sensory and IoT technology to keep track of hot water levels, learning the usage habits of the household so only just enough is heated to meet their needs. 

Centrica, according to a statement, is working to integrate solar, battery and heat pump technology into its customer offer. The company has estimated that the co-location of domestic battery storage alongside today’s solar installations alone could enable over 4.5GW of flexible power capacity.

Notably these investments follow the November 2017 acquisition of the Belgian demand response aggregator REstore and the ongoing development of a local energy market in Cornwall, which has included a 2018 investment into blockchain pioneer LO3 Energy.

They also are unlikely to be the last. While Centrica’s latest report is still to come, its 2017 report states further growth investments in its customer facing businesses of £250m-£350m per year out to 2020.

Most recently Centrica Hive has launched a partnership with the Silicon Valley and Shenzhen-based hardware accelerator HAX to support startups developing smart home devices for the elderly.

Do consumers want it?

While home energy management does not in itself make a smart home, it is a vital component and can serve as the foundation if integrated with other functionalities such as security, lighting control and entertainment.

Centrica quotes an expected value of this market of £2bn/year in Europe and North America by 2025.

Though there is clearly interest in energy management from consumers – as Hive’s product developments indicate – the uptake needs to be accelerated to advance the smart home concept but arguably more importantly to unlock their flexibility on a large scale. The question is how this can be achieved and for that turn to the US-based Smart Energy Consumer Collaborative’s latest research.

Although based on local consumers, both residential and small business, the findings by their nature will be similarly applicable in other regions such as Europe as well as elsewhere in the world. The top five of these are that the time is now for technology-based solutions and already engaged consumers are ready for the next step, but upfront costs are a hurdle for many, not only those with lower incomes. However, return on investment information helps consumers understand programmes and drives participation and they will enrol and participate if it is easy for them to do so.

In a post from the SECC’s President and CEO Patty Durand, published the same day as the research was released, she also highlights the importance for energy companies to reach the ‘selectively engaged’ consumers, i.e. those who engage only periodically with their suppliers and in the US comprise about 40% of consumers.

Though this group can be “somewhat ‘picky’”, Durand writes, they represent a “significant, somewhat untapped opportunity” for providers interested in boosting engagement throughout their customer base and recommends “personalised outreach and offerings that focus on their specific needs and wants.”