iEnergy

Energy and the Internet

This is preview of my upcoming book: “ iEnergy”

The Energy Revolution Will Be Streamed Live On The Internet

Energy Revolution? What Revolution? The energy grid has operated fine for more than a century! Its becoming “Smart”. Energy is cheap, secure, reliable, and, customers are happy- Right?

Ok, well, maybe not… But what does the Internet have to do with it?
Maybe a little history is in order:
Before the Internet was even a glimmer in the eye of its creators, Railroad secured the rights-of-way for laying its rails across the North American continent. This created the paths for telephone and energy distribution networks, not to mention a business model and service delivery architecture that would prevail for more than a 100 years.
Industries spawned from this legacy, owned the rails, wires and pipes that delivered “services” — which they also owned. No need for redundancy or competition. These monopolies spawned industrial advances that accelerated the growth and expansion of western population and culture across the entire US continent over a few short decades.
Nineteenth century captains of industry created megalithic businesses like paper boys on steroids. They owned and controlled not only the paper route, but the ability to report, print and distribute the news to paying customers. The telephone and energy industries adopted the same business principles — centrally controlling all aspects of their respective businesses — from production to delivery. The Grid delivery technology they developed mirrored the centralized “command-and-control” business philosophy.
The entertainment industry followed suit. Enabled by recording and broadcast technologies, entertainment empires emerged. These empires centrally controlled the creation, production and distribution of entertainment “content” — creating and owning the very broadcast and cable distribution networks used to deliver their content to the consumer.
With the threat of nuclear attack, the existing communications grid proved inadequate to survive an attack from a single, strategically delivered warhead without significant devastation. To avert this vulnerability, the US military funded a new distributed communications technology which ultimately came to be known as, The Internet.
Within 20 years of its invention, the Internet emerged as a threat in and of itself. It wreaked havoc upon the century old telecommunications, entertainment and broadcast monopolies — all of which collided by the turn of the 21st century. It was not the Internet that created the disruption per se, but what it represented:

• The Internet was, and still is, a shared and most importantly, DISTRIBUTED service delivery system. — This is contrary to the traditional monopoly model where nothing was shared.
• The Internet comprises of a multitude of private, academic and public networks, all voluntarily interconnecting. It requires that competitors cooperate and share bandwidth and infrastructure — Again, a huge diversion from the established service delivery business model.
• The Internet presents an ever evolving multitude of network connections. Multiple network operators expand and adapt their networks to meet the demand for delivery of content, information and services from multiple sources to multiple destinations over a multitude of delivery options. — In other words, content and services can be delivered over a competitor’s network!
• The Internet is not “owned” by any government or business. That’s right, the Internet is a communications protocol, not a monolithic network. No one actually owns it. It is a conglomeration of diverse networks providing shared bandwidth for the delivery of Internet content and services. — That’s enough to frustrate and outrage any captain of industry from the days of old.

The very concept of the Internet represents the single biggest threat to any business still clinging to the old service delivery mindset. The Internet revolution tore apart century old monopolies and pitted them against each other to compete for the same customers with virtually identical services. Case in point — Cable and Telephone companies today offer identical services and are redundant in many locations. Ironically, one such service offered is called “Internet” which is in fact only few hundred feet of cable that connects their customers to the Internet.
While Internet inspired de-regulation policies that significantly impacted the Telecom industry has had some affect Electric Utilities, to date, the electric utility industry has been left relatively unscathed by much of the disruption that has tormented its siblings. This doesn’t mean an Internet style revolution isn’t coming to the electric energy industry. Many utility executives and regulators understand this and do what they can to keep it at bay, at least until they can retire or exit the industry.
What will cause the Energy Revolution? Well, contrary to what was said earlier, the electric grid is hardly smart, nor showing any signs of achieving self awareness anytime soon. Generation, Transmission and Distribution architecture deployed shows no signs of evolution. Energy costs are on the increase, and many Utilities are facing insolvency.
…And then there’s reliability and security. Suffice it to say, the grid architecture created over a hundred years ago was simply not designed to meet 21st century reliability demands or, worst of all, security risks.
So the Energy Revolution IS coming. While reliability and security will be the first casualties, rising costs and distributed generation technologies will ultimately force a complete re-architecture of how (and where) energy is generated and how the delivery delivery infrastructure must function in order to deliver services — Services which ultimately will no longer come from, or be delivered by a single company.
While the peaceful atom failed to deliver energy “too cheap to meter” as promised, the threat of atomic destruction created business and technology revolutions that continue to unfold in ways we never imagined. Necessity may be the mother of invention but the threat of nuclear war has become the father of innovation.