Google could easily become your next power company, thanks in part to its energy-related investments and its $US3.2 billion acquisition of smart thermostat maker Nest.
Google has already made a number of energy-related investments in residential solar power company SunPower, Panhandle 2 wind farm, and Elon Musk’s SolarCity. In fact, Google has invested over $US1 billion in wind and solar projects.
Meanwhile, Google’s acquisition of Nest “ought to give utility officials a sinking feeling in the pit of their stomachs,” Adrian Tuck, CEO of energy company Tendril Networks, told Bloomberg.
Tuck thinks the Nest acquisition could be just the thing that gives Google a back door into the utility industry, given that the consensus is that the battle over the next five years in electricity will be in the home.
With Nest, Google could leverage its smart, energy-saving thermostats and smoke detectors into “massive quantities of salable demand response,” Tuck said, even as it starts to directly compete with some of the companies it’s invested in.
Demand response is a service provided to property owners that helps reduce your energy consumption and save money. Already, Nest has demand response programs in place with Austin Energy, Green Mountain Energy, and Southern California Edison that use the Nest thermostat as a platform the manage energy during peak times.
The savings from demand response programs allow the provider to sell that back into the power market for a profit, or back to the utility company’s themselves. Demand response programs could potentally cut 10% off the total US peak energy demand by 2030, which would effectively create a market worth $US3.5 billion.
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