Smart Grid as Wikinomics

The Smart Grid is Wikinomics on a Macro Scale from Voices - HarvardBusiness.org by Don Tapscott and Anthony D. Williams
Alexander Graham Bell would not recognize today's telephone network, but Thomas Edison would feel right at home running our current electrical grid. Talking with Leonard Gross, an engineering executive at Ontario's electrical utility Hydro One, we were struck by how bereft of fresh thinking America's energy infrastructure has been. "Since Edison passed away," Gross observed, "we've created a compact fluorescent light bulb. Nothing else has happened."


The inertia is most evident in the industry's planning traditions, which emphasize centralized models of grid design, regulation, operations, and profit-making. Indeed, from an engineering perspective, everything about our current electrical systems — from the transformers, meters and breakers right through to our household appliances — is designed on the assumption that power flows one way, from large-scale generators to the consumer. Unfortunately, this centralized approach is vastly inefficient. In coal-and gas-fired power plants, almost two-thirds of the energy produced by converting fuel into kilowatts escapes as heat. Another 8%, on average, dissipates as the electricity travels over transmission lines to homes. Further inefficiencies arise because the grid must handle peak consumption — the times when local industry is at full throttle and household consumption spikes — but it has no built-in storage capacity (e.g., a nationwide network of electric car batteries). Lots of money is tied up in large-scale plants that are called into action only when needed to cover those rare moments.


Today's grid is also remarkably opaque. The typical utility company has no visibility into real-time demand for electricity and no way to know if there is a power outage in the network until a customer calls to complain. Consumers for their part have next to no visibility into their usage until presented with an aggregate bill at the end of the month. Homeowners rarely get information about pricing considerations. Precious few know what proportion of their power was generated by nuclear, coal, gas, or some form of renewable energy, or what emissions were produced in the process ... "