Wednesday, January 28, 2015


One of the topics that I am frequently invited to address at conferences and workshops is what electric utilities, especially electric distribution utilities, should be thinking about, planning for and implementing as the industry undergoes revolutionary restructuring. Here is my list of the Top Ten (Plus 1) Challenges for electric distribution utilities.

1. Bulk Power Grid - The reliability and economy of the bulk power grid has been declining at an alarming rate and is expected to continue to do so. A groundbreaking 2009 report by the industry's Electric Advisory Committee to the USDOE stated that:
" . . . the current electric power delivery system infrastructure . . . will be unable to ensure a reliable, cost-effective, secure, and environmentally sustainable supply of energy for the next two decades . . . is nearing the end of its useful life."
This is in part because the grid is simply wearing out . . . depreciation expense exceeds new investment. And, because new circumstances and requirements exist, simply investing more in the traditional centralized grid model will not suffice.

2. Climate - Even aside from the hotly disputed linkage of climate change and utility use of carbon-based fuels, the number, duration and severity of weather events have been steadily growing. The result is undeniable even if the cause may be disputed. This further degrades the reliability and economy of the grid, further reinforcing customers' interest in alternatives to grid service.

3. Security - The grid is not adequately secure. While much of the dialogue in the industry is about cyber security, the grid is, even more troublesome, dramatically insecure physically.This is especially true for large, centrally controlled, synchronous AC grids. There is really not a critical facility (e.g., generation, transmission, distribution) in the grid that is not readily approachable.

4. Change / Complexity - The fundamentals of the electric utility business have changed and will continue to do so. Not only are the foundations of the legacy industry eroding, but there are entirely new requirements that the grid was not designed for. Almost all of them make the business more complex.

5. Customers / Competitors - Customers in the 21st century have new expectations and opportunities They have an increasing variety of alternatives to the all-requirements service from their incumbent utility that prevailed for nearly a century. These range from conservation and energy efficiency to demand management to distributed generation and storage to competitive transactive energy markets.

6. Distributed Energy Generation, Storage & Management - There is now an order of magnitude more energy generation units at the distribution edges of the grid than all the utility owned generators in the entire bulk power grid. The benefit versus cost for these “grid edge” components continues to improve exponentially. Monitoring and control is not longer the sole domain of the local electric utility or it's power pool or system operator. Add to this the growing number of electric vehicles which represent roaming energy consumption, storage and even generation.

7. Costs / Revenue - Costs of generation, both fixed and variable are rising. Costs of transmission and distribution are rising. The costs of doing business are rising. On the other hand, utility revenues from energy sales are declining as a result of conservation, energy efficiency, competition and distributed generation. Utilities generally collect a majority of their revenue through charges for energy usage, a variable quantity yet the majority of their costs are due to capacity, a fixed quantity that doesn’t diminish with diminished energy consumption. Traditional approaches to rate design are no longer sufficient. Simply raising rates to overcome declining revenues only increases the incentivize for customers and competitors to further displace purchases from their utility.

8. Technology - A rapidly growing array of new energy, electronics, information, and telecommunications technologies, devices and applications are available. The Internet of Things has arrived. These are helpful, even necessary to meet the challenges of “Grid Edge.” What are they, what do they do, and how can they be properly evaluated, deployed and operated?

9. Digital Enterprise - To stay competitive, utilities must transform themselves into fully digital businesses. Information technology (IT) and operations technology (OT) must merge. Customers' expectations of digital sophistication must be met. New kinds of competitors will come into existence as digital enterprises, not slowed by the need to overcome an incumbent, non-digital business structure and culture.

10. Workforce - It is necessary to rethink the recruitment and management of utility personnel given both the new realities of the grid and the unique characteristics of the next generations of employees.

+1 - Who really knows what can and will happen next? Realize that Moore’s Law for electronic components is just a special case of a more universal truth (a la Wright's and Kurzweil's Laws) that change is exponential in technologies enabling exponential change in business. Utilities will require unprecedented agility and innovation to face a rapidly changing future and largely unpredictable future. The only way to reduce the uncertainty and risk is to aggressively shape the future.


The industry's response has been, shall we say, less than enthusiastic. In a way that is both humorous and sad, many electric utility executives, professionals and line employees tend to react to this list with something akin to the well known Kubler-Ross five sequential stages of grief:

Denial and Isolation - Insist that grid restructuring isn’t necessary, that the legacy grid just needs some tender loving care, maybe some CPR. Avoid those who say otherwise. Try to get out of the business or make it to retirement instead of facing reality.

Anger and Resentment - Assert that the new realities are unreasonable and unfair. Protest that the problems are arbitrarily caused by others and that it could be eliminated by them. Seethe and sulk because business is so hard without the beloved legacy grid.

Bargaining - Try for exemption from the future by lobbying for favorable legislation, petitioning for regulatory relief, or suing for judicial intervention. Try to persuade customers to change their behavior to make the problems go away.

Depression - Mourn for the old burnt out light bulb and take no joy in the new and better LED one. Have no joy or enthusiasm for the future of the grid.

Acceptance - This stage is attainable by only a few incumbents (e.g., NRG) who realize that denying the passing of the old grid model only hinders finding peace and success. More importantly, those who were never really attached to the dearly departed (e.g., customers, entrepreneurs, innovators, competitors, developing economies) are at this stage from the very beginning. They are free to move on to new and better things. Acceptance can be accelerated by associating with them as well as with those who have experienced and triumphed over a similar loss (i.e., a devastating industry restructuring).

To successfully meet the challenges, and, more importantly, to exploit the opportunities, they must be recognized, understood and accepted. The industry, like Norman Bates, cannot prosper by trying to preserve the departed!

Friday, May 23, 2014


I just saw a thought provoking Youtube video that's had a million views . . . 

Solar Freaking Roadways 

which got me thinking . . .

The former Saudi oil minister, Sheik Ahmed Zaki Yamani, once warned his OPEC colleagues: “The Stone Age didn’t end because we ran out of stones.” Few technologies actually become obsolete because they no longer work. Instead, they are displaced by something better. The Stone Age ended because of better tools, bronze in particular. Then the Bronze age ended with the Iron age which was eclipsed by the Industrial Age. If Neal Stephenson's sci fi is, as I believe, prophetic, the Industrial Age will give way to the Diamond Age.

I believe that the Carbon Age will end long before we have used up all the coal, oil and gas in the ground because it will be replaced by better (cleaner, more sustainable, ultimately cheaper) forms of energy. This will be accelerated as we begin to face the "hidden" costs of our profligate use of carbon:

1. The increasing costs of exploration, production, transportation, utilization of carbon fuels exacerbated by exploding global demand . . . the risk of getting so much of our energy from potentially adversarial countries . . . the immense transfer of individual, corporate and national wealth to carbon fuel producers . . . cleaning up the by products of exploration, production, production, utilization that have been dumped into what we breather, drink and eat . . . bearing the costs of their adverse effects on quality of life and productivity of business. In this regard, if our use of carbon has in fact contributed to climate change, the cost is practically incalculable.

I firmly believe that we should have an aggressive national goal, like JFK's "a man on the moon by the end of the decade," for achieving a sustainable energy supply. It should include aggressive public policy with economic incentives for R&D and even commercial deployment (just as carbon and nuclear energy have had throughout their history).

As to the solar roadways concept, there is certainly a huge amount of real estate (and growing) tied up in roads and highways. However, I'm not familiar enough with the technical / economic parameters of converting roadways to solar arrays to know whether this represents a feasible solution. In particular, what are the economic / performance penalties for having to design the panels to be able to withstand the mechanical challenges of traffic on the panels? What are the power transmission / distribution routing issues? Would it be more economical / productive to equip existing rooftops, parking lots, utility rights of way, railroad rights of way, airport rights of way, other otherwise unusable public and private lands? Would other renewable energy sources be preferable . . . hydrogen based fuel cells . . . some hitherto undiscovered technology (quantum energy generation)?

By the way, I don't think that the Carbon Age will be replaced by a Nuclear Age because burning uranium results in deadly wastes that last essentially forever. If the recent events at WIPP in my hometown are any indication, there is no certainty that they can be safely sequestered on earth. There is also the potential for irreparable damage from events like Chernobyl and Fukushima. Even if the waste were benign and/or could be safely sequestered, the economics of huge, central station generation plants (the only way that nuclear power is economically feasible at present) are increasingly nullified by risks, not to mention that the grid is moving to economies of mass production at its edges rather than massive production at its center.

Thursday, March 13, 2014


Let's talk about the issues that underly the increasing prominence of the "utility death spiral" concept. Of course, in times of economic and technological revolution, it's only the incumbent providers who focus on the possibility of a death spiral while consumers, innovators and entrepreneurs focus on the exponential growth in opportunities.

US energy sales have fallen to 2001 levels and are expected to continue to decline until 2025 or after. So far, the decline has been primarily the result of: 

(1) Continuing migration of domestic commercial and industrial business (2/3 of US energy sales) to offshore locations where labor / energy are cheaper and regulations are less confining, 

(2) Prolonged economic slowdown in the US that is exacerbated by the above,

(3) Explosive growth of developing economies which provide even more incentive for emigration of C&I activities and their energy consumption from the US, and 

(3) Growing customer deployment of conservation and energy efficiency measures which will continue, even accelerate in the short term as incumbent monopoly utilities raise rates to offset the fact that their embedded costs are not reduced as much as their revenues decline.

We already see the growing public resistance to carbon and nuclear fuels that make it more difficult or even impossible for incumbent monopoly utilities to build and operate conventional, central-station generation. This will only increase.

We haven't even started to see the full effects of: 

(1) Increased deployment of distributed generation, both conventional and renewables (primarily PV in the near future) which has the same net effect on incumbent monopoly utilities as conservation and energy efficiency (i.e., reduced sales, revenues, margins, market control, physical system control),

(i) increased deployment of energy storage (electrical, thermal, mechanical, chemical) that will further increase the amount of energy that can be obtained from distributed generation instead of using the legacy monopoly franchise grid for backup and supplemental power.

(ii) accelerating decline in cost and increase in performance of wind, PV, fuel cell, energy storage technologies that, as has already occurred with wind, make conventional coal and nuclear generation economically non-viable.

(iii) deteriorating reliability, security, resilience of the legacy centralized monopoly grid that will strongly favor decentralized energy production, storage, management, even at the extreme minigrids / microgrids / nanogrids operating partially or wholly "off the grid."

(iv) continuing exponential improvement in electronics, telecommunications, information technologies (i.e., The Internet of Things) that will make it possible to economically, reliably and securely operate an increasingly complex energy network made up of tens of billions of independent endpoints compared to today's electric grid with <<500 million centrally monitored and controlled generating plants, substations, transmission lines and electric meters.

(2) Entry into the market of a growing number of "non-utility" sellers of power and energy that will further reduce the sales of incumbent monopoly franchise utilities.

(3) Expansion of transactive energy markets in which incumbent monopoly utilities + non-utility sellers + retail customers must buy and sell capacity and energy (and coordination services) between and amongst themselves at market-based (not cost-plus!) prices in real-time and futures markets that further reduce the margins of the incumbent monopoly utilities.

Finally, there is a wild card that almost always favors new market entrants over incumbents . . . a la Kurzweil's and Wright's Laws, technology continues to exponentially improve in performance and decline in cost with occasional quantum leaps (e.g., hydrogen fuel cells, cold fusion, peer-to-peer energy distribution, wireless energy transmission, quantum energy production / transfer / storage).

Tuesday, November 26, 2013


I receive my electric power and energy from a public power system, Austin Energy. This innovative utility has taken part in the creation of a musical performance in which its employees and equipment are choreographed to music. Here is the description from the KLRU public TV station site ARTS IN SHORT:

Allison Orr has choreographed for firefighters, Venetian gondoliers, sanitation workers, and Elvis impersonators. Now her eye for extracting the beauty and artistry of the everyday is  extending to the employees and machinery of Austin Energy. Allison Orr is as much an anthropologist as a choreographer. For nearly two years, she has been shadowing and observing the technicians and linemen of Austin Energy trying to find the snippets of unseen poetry in- motion that fill their everyday lives. “I find my inspiration in watching people who are experts in what they do,” she says. “There’s habitual movement in their expertise that’s almost virtuosic in nature—it can offer a look into their lives and who they are as individuals.” PowerUP—a performance featuring the employees and machinery of Austin Energy, performed to an original score by Graham Reynolds and accompanied by a live string orchestra led by Austin Symphony Conductor Peter Bay will feature 50+ linemen and electrical technicians, bucket trucks, cranes and field trucks, a set of 25 utility poles, and an audience of over 6,000 people.

Wednesday, November 13, 2013


I work with the good folks at InterProse on articles and blog posts for IEEE Smart Grid and other industry websites and ezines. They recently asked me to express my views of what have been the most significant developments in the smart grid over the past year and what might be the most important new trends and developments next year and beyond. I thought that you might be interested in what I wrote for them.


What significant smart grid developments and trends have transpired in the U.S. over the past year? It wasn’t so much a year of dramatic technological breakthroughs, killer software apps or industry restructuring as one of dawning realization by the electric utility industry of the inevitability and scope of change in the physical grid and the way it will have to be operated. Let’s look at harbingers of this transformation.


A good place to start is the downward turn in the AMR/AMI business since this has been perhaps the principal component of what most of the industry has been referring to as smart grid. More money was spent in the name of smart grid on AMR/AMI for demand response than any other technology or application. Almost all of the incumbent AMR/AMI vendors are experiencing declining sales or shrinking market share or both. Yet considerably less than half of existing electric utility metered accounts are AMR/AMI. What gives?

Disappointing Results - A motivation for AMR/AMI deployment over the past few years has been legislative and regulatory mandates requiring demand response programs. Participating utilities were authorized to recover from customers their costs plus a reasonable return on investment in these programs. The goal was to get customers to change their consumption patterns so that utilities could avoid building increasingly expensive, carbon emitting, underutilized central station generating plants while making better use of their existing plants. Yet, as Yogi Berra observed, “If the fans don’t want to come out to the game, you can’t stop ‘em.” Customer participation proved disappointing and even when customers participated in significant numbers the results were less than hoped for. It turns out that most customers don’t want to be engaged by their utility to solve the utility’s problems meeting peak demand or providing reliable, affordable energy. Disappointing results and consumer resistance in turn caused legislators and regulators to be less enthusiastic toward utilities including the expenses and return on investment in their rates.

ARRA Smart Grid Stimulus Grants End - “We spendin’ other people’s money and we like it,” rapped Dom Kennedy. Much of the growth in smart meter deployment over the past few years was spurred by the US DOE ARRA Smart Grid stimulus grants.  Many utilities would not otherwise have deployed AMR/AMI or at least not as aggressively but for these grants. More of the stimulus grant funding went toward AMR/AMI than any other smart grid technology. By 2013 the stimulus projects were mostly done and there were no significant incentives available or apparent on the horizon. 

Today’s “Smart” Meters Aren’t Enough - As Peggy Lee asked in her classic song, “Is that all there is?” AMR/AMI and demand response can’t be all there is for a modern, intelligent grid? It hasn’t even done enough to solve the particular problem that it was designed to address. This is not just because of slow adoption and disappointing results. Better data about energy consumption and electric utility prices may make buyers and sellers better informed, but the legacy grid in many ways constrains the kind of organized energy market activity that could truly maximize economy, efficiency and sustainability. Better usage and pricing data and demand response programs don’t make the grid smarter, more controllable or more resilient. Their motivation is to persuade customers to take up the slack..

As Huey Lewis and the News lamented in song, “I need a new drug.” AMR/AMI and demand response don’t make the grid more observable, more controllable, more adaptable. They are just an electronic version of the traditional electromechanical meter that has been equipped to measure, record and report demand and energy more often and to communicate price signals between customers and providers. New and better intelligent electronic devices will be required throughout the grid and even distributed within customers’ premises. The days of a single, utility owned and controlled meter for every customer are rapidly waning. A utility that has not already deployed the AMR/AMI systems that are available today will be better served to wait for the next generation of intelligent electronic devices, telecommunications and software applications.

Inadequate Integration / Interoperability - The ‘60s rock band Canned Heat exhorted, “Let’s work together. Come on, come on, let’s work together.” The smart grid systems that are in place today in by and large don’t work together. There is little or no integration or interoperability between and among different vendor’s hardware devices, software applications or telecommunications systems. Sometimes there is not full interoperability between a vendor’s different product lines or even different vintages of the same product line. Absent this kind of “3-D” integration, which is much more prevalent in Europe, it is very difficult for a utility to augment or upgrade its AMR/AMI system with newer and better hardware, software and telecommunications from other vendors unless it entirely replaces its existing system. The cost, effort and difficulty integrating with the utility’s other systems and applications are prohibitive. 


The goal of demand response is to shift consumer demand without reducing total energy consumption too much. Otherwise the utility’s revenues are reduced by more than their costs. However, consumers are finding that they can with more certainty effect larger reductions in their power bill, their carbon footprint, their impact on the environment, their utility’s need to build new generation, their exposure to price increases in the future, by reducing the amount of energy that they purchase from their electric utility, not just shifting their demand. The simplest and least risky way to accomplish this is through conservation and energy efficiency measures. It is so much simpler just to make the changes necessary to use less energy all the time than it is to reschedule when to use it. And all it takes is a one time decision to convert to more efficient end use (e.g., LED lights, more insulation, higher efficiency appliances, etc.). 

Unfortunately for utilities, a substantial portion if not most of a utility’s fixed costs are recovered by through energy sales. So, consumers who reduce energy purchases will reduce a utility’s revenues more than its costs. If a utility raises prices to recover the lost revenue, that will just increase the economic benefit for the customers and even incentivize them to further reduce their energy purchases.


Another way customers can reduce energy purchases from their local utility is to get their energy from somewhere else. They can’t buy capacity anywhere else, but they can get energy from other sources, including deploying their own generation. A steadily increasing number of electric utility customers, residential, commercial and industrial, are doing so through standby/backup generators, rooftop and community solar PV, fuel cells, biomass fueled generation and even conventional carbon fueled generation. And they are not just doing it to reduce their utility energy purchases. Some wish to improve reliability, security or disaster preparedness while others desire to obtain renewable or “green” energy. And some consumers simply seek some measure of independence from a monopoly grid. 

Today there are only some 10,000 generating units on the North American grid. If only 1% of the population adopts some form of distributed generation and/or storage, that would mean nearly 2 million distributed generators operating on a grid that was not designed for that. Utilities and non-utility market participants, both existing and “wannabe,” are recognizing the tremendous challenges and opportunities posed by this. Some utilities seem determined to resist distributed generation through legislation, regulation, interconnection constraints and pricing penalties (e.g., not allowing customers to save as much from self generation as they do from conservation and energy efficiency). However, other utilities and many existing and emerging market participants are seeing that they can survive and prosper by embracing this irresistible trend.


At the extreme, distributed generation enables some customers to go mostly or entirely “off the grid” by having enough on-site generation and storage to meet all their needs (i.e., a microgrid) or maybe just enough for one or more critical subsystems (i.e., a nanogrid). In many cases this happens when an industrial or commercial facility requires a level of reliability / security that they are not confident will be available from the utility grid given increasingly frequent and prolonged outages caused by severe weather events, human errors and grid inadequacy. For example, a growing number of data centers, Internet hosting complexes and customer service centers are implementing the microgrid concept. The US Department of Defense is doing it for mission critical loads at their various bases and installations. This trend erodes electric utility revenues more than it reduces their costs in the short run. It also creates complications in planning and operations if the utility must occasionally serve some or all of the requirements only some of the time rather than plan to serve all of their requirements all of the time.


The past year saw steady growth in the deployment of renewable energy generation, both wind and solar, both utility scale and distributed. This in turn stressed the legacy grid because of both the stochastic, non-dispatchable nature of renewable energy and the siting of the resources in locations that the grid had not been designed for, particularly in small, customer-owned installations scattered throughout the distribution grid. 

Even more interesting, renewable energy increasingly proved to be the cheapest energy on the grid, displacing base load coal and nuclear generation which had long been the most economical way to meet customer requirements. Combined with the increasing costs of operating and maintaining coal and nuclear fueled plants, especially for meeting increasingly constraining regulatory requirements related to environmental impact, safety, security.


Once customer demand and energy consumption and utility demand and energy pricing data becomes readily available, not just to utilities, but also to their customers, it becomes easier for customers to to business with non-utility entities. These include on-site generation and storage vendors like Solar City and Power Secure. Last year saw continued growth in the aggregation of consumption and supply by non-utility third parties (e.g., Enernoc, ERCOT’s REPs, etc.). Some aggregate customers’ capability to reduce demand and energy consumption (“negawatts”) and even their distributed generation and storage output. These dreaded disintermediaries continued to unravel the cost-plus monopoly business model and offer more and more alternatives to the legacy centralized grid.


Some utilities made progress with emerging technologies and applications that make the electric distribution grid more observable and controllable:
    • Automated demand side energy management systems to optimize customer demand response while at the same time freeing customers from effort, inconvenience and uncertainty.
    • Automated Distribution Management Systems (ADMS) that can perform Fault Location, Isolation and Service Restoration (FLISR)
    • Automated Volt/VAR monitoring and control to:
        • Reduce peak demand via voltage reduction
        • Reduce energy consumption via voltage reduction
        • Improve power quality via Volt/VAR monitoring and control
    • Real-time, synchronized grid-wide monitoring and analysis with data from phasor measurement units (PMUs) also known as synchrophasors and from similar monitoring devices sometimes called “grid nodes.”
    • Distribution fault anticipation (DFA) which uses computer analysis of the power waveform to identify incipient equipment failures or other conditions that could cause services outages
    • Automated monitoring and control of energy storage to minimize on-peak demand, minimize purchased power costs, maximize energy take from renewable energy resources, enhance reliability and power quality


Nobel Laureate physicist Niels Bohr said, “Prediction is very difficult, especially if it’s about the future.” Nonetheless, I’m prepared to rush in where angels fear to tread because some trends and developments are nearly certain. What’s next? What can we expect in 2014?

My friends John Cooper and Andres Carvallo, in their excellent book published in 2011, “The Advanced Smart Grid: Edge Power Driving Sustainability,” assert that a modern, sustainable grid will emerge from the edges, in spite of the existing grid, through non-utility energy sources and systems rather than evolve from the center of the legacy grid through the traditional regulated, cost-plus monopoly utility model. A few weeks ago GreenTechMedia published a seminal report, “Grid Edge: Grid Modernization in the Age of Distributed Generation,” in which they reinforced Cooper’s and Carvallo’s assertion, calling the phenomenon Grid Edge. 

In 2014 and beyond it will continue to be more and more difficult for utilities to maintain, expand and improve the legacy grid by adding conventional generation, transmission and distribution facilities through the usual planning, operations and management approaches. Yet, the trends and developments occurring in 2013 will continue unabated, some even expanding and accelerating, portending ever greater challenges for the legacy grid. So what will bridge the gap?


Over the past two decades we’ve seen electronics technology improve in capability and decline in real cost exponentially courtesy of Moore’s Law. And network technology has as well courtesy of Metcalfe’s Law. This in turn drove revolutionary changes in entire industries. Clearly this will continue in 2014 and beyond. In fact, the work of Santa Fe Institute (SFI), reported in their working paper, Statistical Basis for Predicting Technological Progress, suggests that Moore’s Law is just a special case of a more general truth . . . that all useful technology improves exponentially. And the work of David P. Reed suggests that Metcalfe’s Law far understates the power of networks of devices and people. 

Ray Kurzweil synthesized this into his Law of Accelerating Returns:  The rate of change in a wide variety of evolutionary systems (including the growth of technologies) tends to increase exponentially. This means that the technologies that will enable a modern, intelligent grid, specifically electronics devices, telecommunications networks, software applications, will continue to improve exponentially, leading to availability of ever better components and applications. This in turn will revolutionize the entire electric energy industry.

Renewable Energy Generation & Storage - The performance versus cost of renewable energy generation, especially solar PV and fuel cells, and electrical energy storage will continue to improve exponentially, driving increased market penetration, some through grid scale projects but even more through non-utility generation facilities dispersed throughout the distribution grid.

EVs and PHEVs - Similarly, the performance versus cost of of electric vehicles will continue to increase, driving increased market penetration. This means more challenges for a grid that was designed for loads that stay put, not for the electrical demand equivalent of a residence moving around on the grid, sometimes with more than one congregating at a single location.

Intelligent Grid Nodes - The vanguard of next generation intelligent electronic devices will begin to emerge and will be far more than electronic versions of the traditional electromechanical meter that can measure, record and report demand and energy more often. They will have the capability to monitor, measure, and analyze the local state of the grid (i.e., voltage, current, phase angle, waveform), its own environment (i.e., weather, intrusion, manipulation) and the customer’s appliances, generation and storage. They will not be a single meter outside the customer’s building, nor a centrally polled and controlled SCADA point, but will be large in number and diverse in functionality, dispersed throughout the utility’s distribution grid and the customer’s premises (e.g., the Modlet), even built into some of the customer’s equipment and appliances.

Ubiquitous Wireless Internet - Public two-way, high speed, digital wireless telecommunications networks and the Internet access that they provide will continue to become more ubiquitous and powerful. They will increasingly be used by utilities, customers and disintermediaries for smart grid applications.

The Internet of Things - The increased ubiquity and capability of the Internet will mean that more and more smart of the world’s electronic devices will be connected to and their enabling software systems and applications will reside “in the cloud.” Cisco has prognosticated that 37 billion new connections will be made to this Internet of Things by 2020. The ever growing nodes of the electric grid will be part of this. A modern, intelligent grid will be a convergence of the electric grid, both legacy center and new Grid Edge, with the Internet of Things. The industry will continue in a path postulated by Bob Metcalfe, inventor of the modem, “Over the past 63 years, we met world needs for cheap and clean INFORMATION by building the INTERNET. Over the next 63 years, we will meet world needs for cheap and clean ENERGY by building the ENERNET.”


All of the above will enable non-utility market participants, existing and new, to provide customers with demand and energy response functionality, distributed generation and storage and even power and energy from transactive markets. The existing legacy electrical grid will increasingly resemble the telecommunications industry networks which are more and more carriers of products and applications provided “over the top” by non-utility providers.


There is an additional, monumental factor that is already affecting the development of a modern intelligent grid and will continue to do so. There’s another “edge” at which a new grid paradigm is emerging, and it’s not in the developed economies. Less than one-fifth of the population of the world accounts for some three-fourths of all the electric energy used in the world. The rest of the world will eventually use as much energy per capita as the developed economies because it is the central means of bringing their quality of life and productivity of business up to the same standard as the developed economies. Even assuming substantial improvements in the efficiencies of energy production and utilization throughout the world, this represents as much as a thirty times increase in the world consumption of electric energy.  

Today, though, the majority of the population of the world does not have a monolithic, centralized grid of the form that was constructed in the developed economies. It is increasingly unlikely that they will develop that kind of grid because their geographic and demographic circumstances are so starkly different. In fact, they will be able to leapfrog the developed economies captivity to what is now, in the new global energy economy, an increasingly obsolete fixed grid because they have access to new and improved technologies and applications that weren’t available when the developed economies were building their power grids. A modern grid for the developing economies will emerge first as an edge grid and not have to gradually erode and replace an outdated centralized grid. 

There are so many more people in the developing economies that now use so much less energy per capita than the people in the developed economies. As their economies develop and they use as much energy per capital, that they will drive the development of so much more of the global energy infrastructure than the developed economies. 


It is not likely that there will be big advances in 2014 in 3-D integrations between and among the incumbent, competing vendors of smart grid technologies, and not just due to a paucity of widely adopted industry standards. Most vendors will avoid investing the resources and effort required to develop open applications programming interfaces to enterprise data buses. Many will be threatened by the idea of being too easy to displace if they are 3-D interoperable with their competitors. Finally, the large installed base of AMR/AMI and other smart grid systems cannot be easily retrofitted to fully or even partially integrate and interoperate.

Well, there you have it, my view of where we’ve been over the past year and where things will be going in 2014 and after. Of course, the only certain prediction one can make about the future is that it will not be like the past, or, as Yogi Berra observed, “The future ain’t what it used to be.” Thank goodness for that! We simply must have a different grid for the future. Not just a smart one, but a transformed, modern grid that is more reliable, resilient, sustainable, adaptable, environmentally benign, decentralized and merged with the Internet of Things.