Look up the definition of information and you’ll see a lot of terminology circularity. It’s all-encompassing and tough to define. It’s intangible, yet it drives everything we do. But information is pretty useless without people; in fact it doesn’t really exist. Think about the tree that fell, unseen, in the forest. Did it really fall? I am interested in the velocity of information, its impact on economies, societies, institutions and as a result in the development of communication networks and exchange of ideas.
Over the past several years I have increasingly looked at the relationship between electricity and communications. The former is the number one ingredient for the latter. Ask anybody in the data-center or server farm world. The relationship is circular. One wonders why the NTIA under its BTOP program didn’t figure that out; or at least talk to the DOE. Both spent billions separately, instead of jointly. Gee, why didn’t we add a 70 kV line when we trenched fiber down that remote valley?
Cars, in moving people (information) around, are a communications network, too; only powered by gasoline. Until now. The advent of electric vehicles (EV) is truly exciting. Perhaps more than the introduction of digital cell phones nearly 20 years ago. But to realize that future both the utility and auto industries should take a page from the competitive wireless playbook.
What got me thinking about all this was a NYT article this week about Dan Akerson, a former MCI CFO and Nextel CEO, who has been running (and shaking up) GM over the past 15 months. It dealt specifically with Dan’s handling of the Chevy Volt fires. Knowing Dan personally, I can say he is up to the task. He is applying lessons learned from the competitive communications markets to the competitive automotive industry. And he will win.
But will he and the automotive industry lose because of the utility industry? You see, the auto industry, the economy and the environment have a lot to gain from the development of electric vehicles (EV). Unfortunately the utility industry, which is 30 years behind the communications and IT revolution “digitizing” its business model, is not prepared for an EV eventuality. Ironically, utilities stand in the way of their own long-term success as EV’s would boost demand dramatically.
A lot has been spent on a “smart grid” with few meaningful results. Primarily this is because most of the efforts and decisions are being driven by insiders who do not want to change the status quo. The latter includes little knowledge of the consumer, a 1-way mentality, and a focus on average peak production and consumption. Utilities and their vendors loathe risk and consider real time to be 15 minutes going down to 5 minutes and view the production and consumption of electricity to be paramount. Smart-grid typically means the opposite, or a reduction in revenues.
So, it’s no surprise that they are building a smart-grid which does not give the consumer choice, flexibility and control, nor the ability to contribute to electricity production and be rewarded to be efficient and socially responsible. Nor do they want a lot of big-data to analyze and make the process even more efficient. Funny those are all byproducts of the competitive communications and IT industries we’ve become accustomed to.
So maybe once Dan has solved GM’s problems and recognizes the problems facing an electric vehicle future, he will focus his and those of his private equity brethren’s interests on developing a market-driven smart-grid; not one your grandmother’s utility would build.
By the way, here’s a “short”, and by no means exhaustive, list of alliances and organizations and the members involved in developing standards and approaches to the smart grid. Note: they are dominated by incumbents, and they all are comprised differently!
Electricity Advisory Committee
Gridwise Architecture Council
NIST SmartGrid Architecture Council
NIST SmartGrid Advisory CommitteeNIST SmartGrid Interoperability Panel
North American Energy Standards Board (NAESB)
SmartGrid Task Force Members (Second list under Smartgrid.gov)
Global SmartGrid Federation
NRECA SmartGrid Demonstration
IEEE SmartGrid Standards
SmartGrid Information Clearinghouse