In this presentation, Larsh Johnson, CTO of eMeter, outlines the rapidly evolving landscape of the modern electricity market and its implications for utilities, technology providers, and consumers. He begins by describing eMeter’s differentiated, frugal product offerings for developing markets such as India, China, and Brazil, which are tailored through special pricing and joint‑venture models. Johnson then shifts to policy drivers, highlighting the Clean Power Plan and related emission‑reduction mandates that are accelerating coal retirements and pushing utilities toward natural‑gas conversion, renewables, and distributed generation. He points out the twin challenges of aging grid infrastructure and an aging workforce, which are compounded by the need to integrate highly variable wind and solar resources. Technology innovation is presented as both a source of new challenges and a set of solutions: demand‑response enabled by smart thermostats (e.g., Nest), mobile‑based incentive platforms, and gamified energy‑saving programs that allow utilities to shave load across millions of homes. Johnson emphasizes the transformative impact of rapidly falling battery costs—citing Tesla, Panasonic, and a projected 50% cost reduction by 2020—on grid reliability, peak‑shaving, and consumer economics. He illustrates a personal time‑of‑use (TOU) rate example from San Diego, showing how battery arbitrage can convert high‑price peak consumption into off‑peak savings, potentially offsetting the capital cost of a residential solar‑plus‑storage system. The talk also explores small‑scale natural‑gas generation and fuel‑cell technologies (e.g., Bloom Energy) as a cost‑effective alternative to grid electricity, noting the large price differential between natural‑gas‑derived electricity and purchased power. Johnson concludes by questioning the future role of traditional transmission and distribution utilities in a world where distributed resources, storage, and consumer‑side flexibility reduce reliance on centralized generation and long‑distance power transport.
I'm going to move on now into sort of today's energy market and characteristics. So if you guys want to jump in or ask any questions, feel free. But there's a lot of things going on. Yeah, go ahead.
Do you have a frugal version that you're doing for developing countries?
You have a what?
Do you have a frugal version that you're doing for developing countries, or is it a one-size-fits-all?
No, we have different kind of models. For example, we do have a— actually, we've operated about a 100-person development team out of Noida in the Delhi area. And we have a business in India that's quite strong. We have a joint venture in China. And so we are addressing those markets with special pricing and frugal versions as well. And then we've also had a very strong presence in Brazil. So I would say those are probably the 3 dominant countries that we have that I would say impact our pricing models as well as our deployment strategies, but also have a very great need. in terms of what they're trying to do in their countries. Challenges today. There's a lot of them. There's actually an update. This slide is talking about the Clean Energy and the Standard Act of 2012, but recently you've probably read about the Clean Power Plan or you've heard about that. That's one of the Obama administration's clean initiatives that is essentially passed and now utilities are all facing some significant emission reduction programs that they have to put in place. Those are going to increase further the cost of using coal-burning plants, which will then cause more and more plants to go offline and convert them. That will raise some questions about power system reliability, because if someone says, I can't afford to operate this plant, oh, and by the way, I'm not going to build a new one, what are we going to do? That's where some of the initiatives are. Look at distributed generation, look at renewables, And look at converting coal plants to natural gas. There's some talk about nuclear, but frankly, that's a long-time prospect and unlikely to have a significant impact in the next 20 years. But in any case, we have a lot of those things going on. They're all driven by greenhouse gas emissions. I think we all understand what's going on with that. But we also have aging infrastructure. A lot of the power systems that have been put in place are getting older. There's a lot of people who are just not going into that business, so the people are getting older too. There's old people, there's old infrastructure, they're facing new cost pressures. Those new cost pressures are also being further exacerbated by the need to actually accommodate these new sources of energy from wind and from solar, all of which have high variation. They're very difficult to manage and control. That increases the risks and costs of operating the power system. You throw on top of that my new Model X, which is going to draw a little bit of power when I plug it in to charge. And all of a sudden, you can see that there are some interesting dynamics here in the business. So lots of these sorts of challenges. Some of these challenges are being helped and some are being created through technology innovation. Technology innovation in terms of being able to manage my load through something like a Nest thermostat that automatically can respond when a power system says, hey, I need you to reduce your usage. The Nest thermostat could say, okay, I'm gonna turn your temperature set point a little bit, so I'm not going to run your AC quite so much. That will drop your home's load. You do that across a million homes, it makes a meaningful difference. Other types of information systems give you that kind of information as a mobile device, or they gamify some of these things where you say you reduce your use and you'll get some savings. We can now interact with the consumer to try to get this demand response, they call it, in cases where the grid is particularly stressed or where power prices are particularly high. So they're offering you incentives. Part of that will also go into the innovations around solar. And more, probably not more importantly, but more dynamic right now, or let's say more dramatic in the way it affects the grid, is the use of power storage. Remember what I was talking about when you turn that light on? That generator has to immediately react. It really does. Now, when you put storage into the system, All of a sudden, that changes that dynamic. And that has a big impact on how we actually can operate the grid. It can really promote increased reliability. And there are a lot of really interesting things about what's going on in batteries. And of course, you all know about Tesla. And Tesla's driving the cost of batteries down in terms of the way that people are looking at it. But today, you can actually get batteries from Panasonic, one of the leading suppliers, that are competing with Tesla and actually at rates that are quite low compared to what we've seen in the past, literally half of what they used to be. And as little as a couple years ago. So the combination of new generation, whether it's from natural gas, from solar, from wind, storage, and then ways to manage demand at the customer site, are all sort of changing the dynamic and putting the customer into the loop. So the consumer is now becoming part of the operational characteristic of the power system. And that's really an important dynamic that has Really goes back to why we said, well, we need to have a meter in this overall system. The options that I have today, if I look at— this is a chart of my own home using power here just a few days ago. I am on our time of use rate in San Diego. During those darker bar areas in the middle of the day, I actually pay $0.36 a kilowatt hour. But I get a deal because the average price is closer to $0.15 per kilowatt hour, $0.20 per kilowatt hour. I get a deal of $0.09 a kilowatt hour in the off-peak. So when I use power outside that peak window, I get a pretty significant discount. But I get a big penalty using it on peak. And so what that's prompted people to do is to look at the decline in battery costs in particular, which are basically projected to be, again, halved by 2020. And allow me— I'll just look at that animation. I'm going to shift that dark bar usage To a period where I'll charge a battery to cover that so that during the on-peak time, I won't have to actually consume any power during the on-peak time. That means that I basically save $0.27 per kilowatt-hour that's in that dark section. Now, what that does is that ends up netting me some money that I can use to pay off the investment in putting that battery in place. Now, if on top of that, that battery can help me provide some kind of power system reliability, Where if I have a short outage, I can ride through that outage with an uninterruptible power supply here at my home, then I get the additional benefit of reliability. On top of that, if I look at my home usage today, it's about 36 kilowatt hours per day. That's not too bad. I can actually cover that and be net zero with about a $24,000 investment in solar panels. If I couple that with my battery, And so forth, I have a pretty nice package. I guess many of you are probably familiar with this concept. What this is doing is it's offering me a way to get lower costs of energy, generating it myself, more reliable power. Now, the interesting thing is— let me add one more thing here. I forgot about this piece. One more twist. Natural gas, when you burn it, can convert into energy, of course. If we do the equation between how much gas we burn to kilowatt hours, so I can equate it to electricity, I'm actually paying quite a bit less, 5 times, 6 times less for a kilowatt hour from my gas than I am from my electricity. If I looked and I say, wait, can I generate electricity using natural gas? Well, of course I can. I can do it from a big power plant, but I can also do it now with more smaller-scale systems as well. Folks like Bloom Energy have been building fuel cells for a long time. Today, they power buildings like this with their fuel cells. But with this kind of electric-gas price difference, there's an arbitrage possibility that I, as a consumer, could generate my own electricity, not only from solar, but also from clean-burning natural gas. Still carbon emissions, but far, far less, and without the distribution and transmission losses that come from a big central station power plant. The efficiencies of doing this are now approaching the same efficiency as a power plant. Now there's almost no reason, other than the scaled-down economics, to say, Whether this could actually work. Technically, it can. Commercially, probably not quite there yet. All this means we have questions today about what happens to that infrastructure that we built to transmit power from central stations to consumers. The questions there are, do we really need it? How are we going to continue to support it? It's getting older. As I said, the people are getting older. There's emission limits causing the power plants to come off. Reliability issues. If you remember Hurricane Sandy, that stimulated a lot of investment in system reliability. And then, of course, on the other side of the equation, all the costs are coming down in terms of these alternative distributed resourcing capabilities. So we are in this real conundrum right now in our industry to say, how is this going to go forward? What is the role of the wires company in terms of distributing energy around the grid?
