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Home Energy Management System (HEMS) ICT Market Study - Main Report


Citation DNV GL Home Energy Management System (HEMS) ICT Market Study - Main Report, ETI, 2014. https://doi.org/10.5286/UKERC.EDC.000553.
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Author(s) DNV GL
Project partner(s) DNV GL
Publisher ETI
DOI https://doi.org/10.5286/UKERC.EDC.000553
Download SSH_SS1403_3.pdf document type
Associated Project(s) ETI-SS1403: Smart Systems and Heat (SSH) Programme - Home Energy Management System (HEMS)
Associated Dataset(s) No associated datasets
Abstract The ETI commissioned the HEMS & ICT Market project to undertake an in depth study and assessment of HEMS along with what data, processes and controls andpotential additional services enabled via a linked ICT system. The project delivers key insights and findings in terms of potential future offerings and capabilities of these products along with market assessment information. The aim of the project was to characterise the existing market for HEMS and ICT systems and to quantify the market/commercial opportunities for future HEMS and ICT propositions for both consumer and business.

This document is the final report from the project and consists of 2 sections.

Section A covers the “Future scenarios and opportunities” for the market. This starts with an overview of the conclusions and key market opportunities with detailing of each in full. It continues with an explanation of the likely scenarios that determine how the market could develop. The latter part of Section A covers the analysis of the key drivers affecting how the market is likely to develop, as well as the main areas of value in the market which underlay the scenarios.

Section B covers the characteristics of the current HEMS and related ICT market, starting with an overview of key messages, critical success factors and risks.

Key Messages:
  • Current HEMS market in the UK is dominated by relatively simple products with slim margins
  • The real long term aim is to establish and own the customer relationship in the home; simple HEMS products are the gateway device to a connected-home
  • The connected-home market is most likely to be led by ambitious and well-funded technology players
  • Telcos are also well-placed to move into the space with bundled offerings but no sign as yet
  • Of the Big 6, currently only British Gas is demonstrating the ambition to drive development of the HEMS market
  • Advanced ESCo offers are likely to take longer to, or may never, develop in the market
  • Smart home development likely to develop later as an evolution from earlier automation
  • The big prize for ETI is in developing the Advanced ESCo proposition where there are 3 primary opportunities identified
    • Right-sizing of heating solutions
    • Optimisation of time of use and demand response benefits via local storage
    • Arbitrage-driven operation of hybrid heat pumps
  • Preparing for a non-energy led scenario may also be sensible to consider, especially in the shorter term
The report was initially prepared in August 2014. Some details and analysis may be out of date with current thinking