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Revolutionising the energy management market

The Business Times by KOH EN LIN

Singapore

YOUR smart electricity meter is probably dumb, going by the standards of Alex Lau, the 45-year-old CEO of Anacle Systems.

"The technology needed for a smart meter to send its readings back to itself was already available 30, 40 years ago," he says. "Why is the meter reader still coming to your house every two months to read them?"

Last June, the energy management solutions company unveiled a meter with higher IQ. Named the Tesseract, it is a 96mm cube with a touch screen, an Android operating system, and an unprecedented computing power of 64-bit - compared to more common 8 or 16-bit meter. When connected to the main power line, it can control the energy expenditure of an entire building.

The Tesseract can help users better manage energy consumption when outfitted with various custom apps - apps that can switch off dormant devices, analyse the power consumption of appliances, detect malfunctioning equipment, and read the water and gas meter.

That is why Mr Lau named the Tesseract after a four-dimensional cube. It represents a device that "opens a world of possibilities", he says.

Anacle has also toyed briefly with ideas during a "thought experiment" exercise, considering the computing power at stake. It could possibly mine bitcoin, or buy and sell electricity off the market.

Throw ideas first, and think about the market and cost later, Mr Lau had told his staff.

The main point was to stamp a radical boot on the conservative energy management market.

"The industry doesn't innovate, or innovates very slowly," says Mr Lau. Even the Tesseract is "futuristic-anachronistic, because its technology is considered passe for your smartphone. But in our industry, it's light years away".

In 2006, Mr Lau had started Anacle Systems on the premise of two main observations. First, fewer buildings were being constructed in Singapore. Buildings that could be decades-old were being used without the smart tech to manage energy consumption.

Second, energy prices had been rising steadily. Developing energy-saving equipment to retrofit a building seemed downright appropriate. "Energy efficiency is actually the second-biggest source of energy in the world," says Mr Lau.

Armed with savings of his own, that of friends and family, as well as four venture capital funds, Anacle Systems took five years to create Starlight, a system of meters, servers, and software that analyses the customer's energy expenditure.

But Starlight was their first cocktail of hardware and software, and they were not prepared for an unreliable supply chain where delivered goods don't always match the specifications promised. They were also unable to locate a laboratory to do testing in South-east Asia, resorting to using one in Japan to get their products certified.

When Anacle came up with the Tesseract in 2017, they had spent S$1.8 million on research and development for the Tesseract alone. "You cannot excite people if you are only working with incremental improvement," Mr Lau says.

Now, as the Tesseract is still relatively new, it is mainly Starlight that is used by most of Anacle's clients. With systems installed in over 300 buildings in Singapore, including that of Singapore Airlines, CapitaLand and NTU, as well as in the South-east Asia region, Anacle has the biggest market share in Singapore for energy management solutions, with practically no competition.

However, being the first to introduce a 64-bit smart meter means they have to bear the brunt of convincing the market why everyone else should get one too, says Mr Lau. They have made the cost of one cube US$400 and similar to that of a regular meter so that an affordable price would encourage customers to incorporate it into their energy management systems.

They have held seminars and launched testbeds in China and Malaysia to demonstrate how their products work, compiling case studies and videos to show to customers.

At the same time, Anacle is also fending off the second problem of being local and not having a strong brand name in a market which favours international brands. "We would rather be a Japanese company with the same product so we can sell better," Mr Lau jokes.

To eradicate their nickname of being the "biggest unknown company", a series of marketing campaigns will be launched in June this year to communicate Anacle's idea of the future of the energy industry. This will include the use of social media to appeal to the younger demographic.

For an industry full of "all old people and lots of Homer Simpsons, we can afford to have more young, energetic minds join in the effort", says Mr Lau.

They also listed on the Hong Kong Stock Exchange in 2016 to better flex their brand name, using it as a springboard to China, which will be one of Anacle's target markets this year, says Mr Lau. They have not listed in Singapore because the exchange and capital market is much bigger in Hong Kong.

Mr Lau says it is also difficult to hire enough engineers locally because of the small labour market.

"We tried every trick in the book. Our office is next to the MRT, we have spent a lot of money to renovate the office, given flexible hours, and we have paid the best we can without crippling the company," he says. "But the pool is still too small."

Instead, Anacle has opened a lab in India to make hardware, and on April 25, it has - in a joint venture with Enjoytown (Hangzhou) Holdings - opened a research and design centre in Hangzhou.

The joint venture entity also signed an MOU with local authorities in China to roll out smart-city solutions across 10 towns.

"The problem with the energy market is that there's a high barrier of entry, because of the need to spend money to build hardware that lasts very long," says Mr Lau. "We eliminate that by creating the Tesseract as a platform for others to hop on, so they can just focus on software development and narrow the innovation cycle, making this conservative industry a lot more vibrant and fast-moving."

"When I was young, I was very excited to bring the car to the carwash by automated machines. Now, we have low-cost labour washing the car. Instead of robots washing the car, we are back to the Stone Age. We are trying to stop the industry from going the same way," he adds.

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