Where Einstein Meets Edison

Using Automation To Make Energy Efficiency Efficient

Using Automation To Make Energy Efficiency Efficient

Jun 28, 2010

Over the past two decades, automation has transformed industries as diverse as banking, retail, and automobile manufacturing.  Superior implementation of automated procedures can be a source of both cost reduction and competitive advantage.  For example, Amazon has been able to use its mastery of information technology and automation to deliver goods cheaper and faster, transforming an entire industry.

In early 2009, MIT Sloan student Shobin Uralil wondered why automation couldn’t be applied to the energy efficiency space.  He and the two other co-founders of kWhOURS (pronounced “K.W. Hours”), Colin Davis and Greg Davis, noticed that energy audits for improving commercial building efficiency had tremendous potential through increased automation.

At the time, Colin was working as an energy auditor, and he performed energy audits of commercial buildings with pen, paper, and a digital camera.  He combed through buildings, manually examining everything that consumed electricity, gas, or oil and taking digital photographs of each machine and building system.  At the end of the day, there would be 50-100 pages of handwritten notes, which included facility interviews and nameplate efficiencies.  Back at the office, Colin would spend additional time to transcribe these notes into Microsoft Excel, which was the industry standard 9 times out of 10.

Typical auditors have 10-15 years of experience, so this time-consuming process commands high fees per audit to pay auditors commensurate with their experience level.  The founders of kWhOURS have built a team of software and energy engineers and created a product that runs on a touchscreen tablet PC.  The software makes it easy for auditors to input information in the field and organizes the data in a logical way for later use.  The organized information allows auditors to skip the transcription step and move directly into making energy efficiency recommendations, saving time and money. This technology has received rave reviews from the field. A managing member of Efficient Energy Advisors commented that “the learning curve makes sense and is intuitive,” and added that he looked forward to a long future of working with kWhOURS.

Having recently signed the company’s first paying customer, Mr. Uralil does not see the logical next step to be extending the tool for residential audits.  Residential efficiency is a much harder sell, as energy expenses only represent a small fraction of a typical household budget. On the other hand, for commercial spaces, lighting and HVAC (heating, ventilation and air-conditioning) represent 50-80% of a building’s energy use and account for 20-30% of the cost of running a building.  Energy efficiency is therefore a much more pressing concern to those running commercial spaces.

Instead of extending the tool to residential audits, Mr. Uralil believes the next step is automating the implementation of energy efficiency improvements.  Studies have shown that somewhere between 10-13% of energy efficiency recommendations are actually implemented.[1]  Uralil believes kWhOURS can extend its customers’ capability and efficiency by using software to translate audit data into investment calculations and specific actions.

Presently, several energy service companies (ESCOs) offer investments in energy efficiency upgrades in exchange for a fraction of the savings over a specified time frame.  Although their services are generally beneficial from a net-present value perspective, decision-makers within large companies tend to exhibit a bias toward inaction when deciding whether to hire ESCOs.  The risk of fraud, uncertainty about the benefits, and low probability of a major cost improvement all contribute to this tendency towards inaction.   Uralil believes kWhOURS’ automation of the audit process will enhance the credibility of the process, lower its cost, and lead to the creation of additional skilled jobs in the energy efficiency space.

Uralil believes that automation can transform the energy efficiency world, much as it has transformed several other industries.  To the team at kWhOURS, the challenge is to design a useful, relevant tool that revolutionizes the economics of energy efficiency.   “We are looking forward to getting this in the hands of as many customers as possible and having them experience the benefits first-hand”, Uralil explained.  “We are firm believers that auditors should spend the majority of their time on the parts of the audit that demand their expertise and not on the manual, repetitive tasks that make their jobs difficult.  We look forward to becoming the industry standard while being able to scale the industry.”

For more, see: http://www.kwhours.com/

 

References

[1] Based on conversations with Utilities and ESCOs.

Mark Chew

About

Mark Chew presently leads the distributed generation policy and strategy at Pacific Gas and Electric Company in San Francisco. He joined PG&E in 2010 as an internal consultant, and he has also worked on demand-side management programs and forecasting distributed generation penetration. Mark received his MBA and MS in Chemical Engineering graduated from MIT; he also holds MS and BS degrees in Electrical Engineering and Computer Science from UC Berkeley. While at MIT, Mark was a founding editor of the MIT Entrepreneurship Review and was a lead organizer for the MIT Energy Conference. Before MIT, Mark spent 4 years at Qualcomm designing RF chips now used in mobile devices, including the iPad 3 and iPhone 4, 4S, and 5.