This article is part of a series written by Don Tapscott and Anthony D. Williams, authors of the newly released book Macrowikinomics: Rebooting Business and the World. Mark Parker, the CEO of Nike calls it "A masterpiece. An iconic and defining book for our times." The Economist says it's a "Schumpeterian story of creative destruction."
The book argues that many of the institutions of the industrial age have finally come to the end of their lifecycle, and are now being reinvented around a new set of principles and a networked model.
Today's blog looks at the benefits of Wikinomics applied to the energy grid.
Humanity's ability to transform raw materials into energy powered the rise of modern civilization and shaped the fortunes of nations throughout history. James Watt's steam engine triggered the industrial revolution in Britain and ushered in a period of enormous technological, social and economic transformation. Roughly a century later, the invention of electricity and the eventual electrification of factories brought large-scale business enterprises and double-digit increases in productivity that transformed the United States into the modern economic powerhouse.
Today, the world stands at the brink of a new energy revolution -- one that will fundamentally transform the ubiquitous but largely invisible infrastructure that powers every home appliance, every medical device, every light source, and virtually every industrial process, from agriculture to construction. The fossil-fuel-based economy is coming to an end and a new green-energy economy is emerging in its place. Like past energy revolutions, there will be great payoffs for the countries and companies that master the new technologies early. The opportunity for new product and service innovation is huge, as is the potential for smart firms to create hundreds of thousands of new high-skill jobs in fields ranging from solar engineering to software.
But are we positioned to take advantage? To really tip the scale in favor of green energy, we need an infusion of Wikinomics principles. The need for cross-sector collaboration in developing and scaling new technologies is paramount. But we can and should go further. Truly opening up our energy infrastructure could catalyze new sources of supply, provide a platform for new energy services, and help foster a culture of energy "prosumption" whereby household and business users become active producers and managers of energy, not just passive consumers and ratepayers.
It's not as far-fetched as it sounds. There is already increasingly broad agreement that our electrical systems should do more than carry electricity. They should carry information. And once the grid carries information, it stands to benefit from the same kinds of innovation, collaboration, and wealth creation that the Internet has enabled in other sectors of the economy.
In many ways, the argument for a smart grid based on open standards parallels the argument for an open Internet. The old power grid is analogous to broadcast media with its bias towards centralized, one-way, one-to-many, one-size-fits-all communication. A smart grid, if it can be built, will leverage the Internet to weave millions, and eventually billions, of household appliances, substations and power generators around the planet into an intelligent and programmable network. And, just as open standards and "edge intelligence" brought forth creativity on the Internet, openness in the new energy grid will ensure it goes beyond being just a computerized pipeline for delivering cleaner electricity, and becomes a platform for a vast array of new energy services.
Building a smart grid on open standards would, for example, allow software developers to build applications just as developers build apps for the iPhone. The most straightforward application might analyze a household's electricity usage data, identify inefficient appliances or practices in the home, offer tips on how to reduce energy, and provide special discounts on efficient appliances or electronics. Armed with more information about tariffs, for example, the dishwasher would wait for the price to fall below a certain level before switching on, and the air-conditioner would turn itself down when the price goes up.
Innovations like these are especially exciting for the behavior changes they will bring about. Studies have found that when people are made aware of how much power they are using, they reduce their use by about 7%. With added incentives, people curtail their electricity use during peaks in demand by 15% or more. The Climate Group estimates that the application of digital technologies to enable smart grids and smart buildings has the potential to avert 3.71 gigatons of CO2 equivalent global emissions by 2020, delivering some $464 Billion in global energy cost savings to businesses, taxpayers and consumers.
These savings pale, moreover, in comparison to the impact we could have on future generations by transforming the way we produce and consume energy. In the face of climate change and diminishing stocks of fossil fuels, we can take one of two routes. One path leads to escalating prices, energy shortages, and economic backwardness in a world facing environmental catastrophe and increasing geopolitical conflict. The other path leads to growth, global cooperation, and an abundant supply of clean power delivered through a smart energy grid that enables consumers to become active and informed managers of their energy consumption. The choice is ours to make.
Macrowikinomics available at: Macrowikinomics.com
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Grid upgrades are needed of course, but rooftop pvs solar reduces grid load, as does small scale local waste bio char systems. The Bloom box also reduces grid load. The Smart grid makes sense too. I'm not sure that AC wiring is a good communications medium, I think running a fiber may be a better choice, but tech will decide that.
Yes the green companies to work together, to form online industry promotion sites, and work together on getting favorable regulations and subsidies.
I can see where there might be some flexibility in when dishes need to be washed, but don't peaks in electricity use also tend to coincide with when it's hot? Will a smart grid know that there's an elderly person living in the apartment so it won't shut down the air-conditioner when price goes up.
A smart grid to me is one that is more reliable. Many of our electronic devices don't like fluctuations in voltage and frequency.
I can't say that I more than start to comprehend what you are saying, but it sure feels like I should, so you've just landed near the top of my reading list. Anyone who has the sense to put human climate change and fossil fuel energy depletion together as catastrophic birds of a feather claims my vote. I look in vain for the usual miscreant economists and politicians of note, however "progressive" they might be, to make the connection. They are either clueless or refuse to be the bearer of bad news for the status quo.
No amount of tweaking will fix this. It's gonna take change that few want to believe in, and if you guys have an intellectual grounding for that change, I want to know about it.
Why be content undertaking all those processes between raw material and finished item? If ways can be found to move directly from source to product. A recent documentary examined the heating effect of large conurbations on their surroundings. Why not extract latent energy from the ground beneath a city? Rather than importing it from some far flung location.
“the impact we could have on future generations”
Considering how much food production is dependant on petrochemicals. “Drill Baby Drill” may equate to “Starve Offspring Starve”.
"Considering how much food production is dependant on petrochemicals. “Drill Baby Drill” may equate to “Starve Offspring Starve”. "
f&f just for that. Everything is so danged urban-centric that even when people start to get the idea that climate change and finite energy resource depletion are the double hammer of this century that take precedence over all other relative trivialities, they still can't make the connection between this and their basic sustenence. We'd better start thinking about soil and water again or reap the whirlwind as we hit the fossil fuel wall over the next decade.
Consider my love affair with my electric company's real-time pricing. I got it, or so I thought -- it's all about managing peak demand. If we would all just go to the beach on those 3 hyper-sultry days of summer, then a tremendous amount of capacity would not need to be kept wastefully on line. I also saw the potential for synergy -- I realized that my peak demand might coincide with some other region's valley, or somebody's else's peak solar generation if not my own.
All was well and good until the day that the pricing did not make sense -- it spiked due to no local weather pressures or local behavior that I could imagine. If I couldn't anticipate, then I couldn't plan and I couldn't achieve our mutual gain. Soon after, the electric company explained that their Eastern market was experiencing a dramatic heat wave that my Midwestern area escaped, and that they had decided this should have an impact on Midwestern pricing (in other words, I should subsidize the East and expand my planning horizon to encompass their failure to adapt which is encouraged by forcing me to pay for their failure).
See how easy it was for the electric company to use the grid to lose sight of principles?
It involves the little recognized threat of solar flares and can attract wide support once understood.
See Green Light, and other articles at: www.aesopinstitute.org for an outline of the potential problem and a few surprising ways it might be addressed.
We are at the edge of both a climate disaster and a new age of low-cost, decentralized energy.
If we are quick enough to accelerate radically new science and technology, there may still time to avoid the worst.
The most important technology is out-of-the-box and needs independent laboratory validation before it will gain acceptance by most scientists.
But, there is a possibility that revolutionary, cost-competitive, products that provide electricity will enter the market in 2011.
Ironically, a truly adequate initiative to maximize the probability of that prospect could provide large numbers of jobs and help revive the economy.
The difficult is sometimes done immediately. The seemingly impossible may surprise many skeptics and take just a little longer.
Work emerging from laboratories all over the planet suggests that will prove accurate.
Cost-competitive alternatives will be the most realistic way to end the need for carbon fuels.
We can see that they do!
With a determined effort, future cars can become power plants when parked, selling electricity to pay for themselves.
These new possibilities need nothing more than sufficient support, ideally to grow 24/7.