Whether you believe in Climate Change or not, there is little debate that large scale weather events have become more frequent and intense. We appear unprepared and in many cases unable to deal well with these events. In September 2017 alone tropical storms Harvey, Irma and Jose battered both the southern mainland US and devastated many Caribbean islands causing billions of dollars in damage. The storms have left many areas – BVI’s, US Virgin Islands, areas of Puerto Rico effectively flattened and parts of Texas/ Florida – with severe economic and personal disruption. The core infrastructure we all take for granted will take many months if not years to return to normal Basic capabilities to communicate, transport goods, distribute power and water, not to mention both residential and commercial buildings they serve are heavily impacted. We are much more vulnerable, less secure and far less resilient than perhaps we thought.
“We are witnessing a fundamental shift in the assumptions used to build our 20th and 21st century infrastructure for energy, manufacturing, city planning, communication, transportation, supply chain/ distribution and more.”
In the past, we led with the thinking (which for a long time held in fact) that scale and centralization would lead to greater efficiencies in the production of goods, services and products. We are now at a practical limit to that thinking. As a result, we need to embed different assumptions into Design-Thinking going forward. And… we need to incorporate these assumptions in a way which will do so with limited cost penalty to our daily lives. Fortunately, this is both possible and practical. Looking as a reference example, internet protocol was created not to enable chat rooms and social media, but as a way to fundamentally increase the resilience and security of communications by breaking data into smaller pieces, providing multiple paths for it to go from sender to recipient and dramatically reduce single points of failure in that network. This was driven by military and defence needs, but as we look at the future of our commercial infrastructure, this same thinking and design approach is valid. And the role industries play may change greatly in the years to come.
All About Sensing – the new world of intelligence around us…
Today, we respond to a crisis. Tomorrow we need to sense that it is coming and act in advance. Today the Internet-of- Things (IoT) is a series of connected, but not ‘’interconnected’’ elements. We may know a great deal about whether our washing machine is running, or our house has been broken into, or what we have set our temperature to… but we’ve not stitched these things together and today have a bag of parts to deal with. Some pundits rightly claim that it is today more the ‘’internet of broken things’ since it is difficult to make these elements work alone and even harder to make them work as part of a coherent system. While the example noted is about our homes and the things we see every day, the same is true of the world around us. The energy we use and take for granted. The cities and transportation grid we assume will work and always be there. They too are today just a bag of parts held together with brute force. Being able to respond to the changes happening will force us to change in many ways.
Energy – signalling the return of distributed electric production….the rise of the ‘utility-as- a-battery ‘?
Early electric power facilities provided generation to support the local community – as a function of both technical and evolutionary limits of their time. The Pearl Generating Station built by Thomas Alva Edison in 1882 to service the New York Financial District provided the early market for his nascent electric light bulb business and quickly moved from a novelty to a necessity. The use of DC generation quickly shifted to AC as distribution areas expanded, scale grew, and the need for greater efficiency emerged into what became the public utility model for the United States in the early part of the 20th century. Until the 1970’s the model changed little. Greater scale and centralization of generating assets, higher voltage and greater distribution from those centralized facilities, and local retail delivery were the models not only in the US but globally.
As the economies of scale for traditional power generation using coal, nuclear and hydro levelled off, and the variety and cost of distributed production assets including natural gas, solar, wind and distributed hydro amongst others declined significantly. In the case of solar, for example, the price per kWh has dropped on average by 80% over the last 10 years in the US and globally (2) with the price per kWh for generation stabilizing at $0.06-0.07/ kWh. Interestingly, this is very near the cost of baseload power at scale. The story for wind, small scale hydro and natural gas is quite similar. Even more interesting, these price points for power are achieved with very limited correlation to scale (4) and for facilities built close to the area of use. In addition to competitive costs of power production, by virtue of being localized there are much lower transmission and distribution costs and losses to meet that peak power demand. That ‘power matching’ – peak gen to peak load – creates a near perfect combination to reduce the loads to the existing grid system. Solar and gas compliment both baseload generation (from coal, nuclear) and more flexible generation from hydro sources. What does this change? Lots!
This presents an incredibly interesting opportunity for the electric industry to insert a fundamental shift to over 100 years of design thinking. By being much more granular in thinking through system design, there is a unique opportunity to reduce single points of failure, enhance energy security and to create new paths for the resiliency of the power systems. Reducing single point opportunities for failure… when well done…. can = fewer catastrophic outages, reduced downtime of customers, improved return-to-service times and at the limited change in ultimate power cost. Simple examples of change such as the addition of storage in the electric system at local substations, in homes with both backup natural gas/ diesel generation and storage products such as Teslas’ PowerWall, and ultimately including the transportation network via grid-connected cars requires rethinking the electric delivery system. It requires deeper thinking in both localized system design and overall network intelligence… creating greater resilience to disruption from whatever cause at a local level requires a change in roles of the utility from the sole provider and distributor of power to the orchestrator of a much more diverse power delivery paradigm. While there are substantive steps being taken in this direction today (3), a major change to design thinking, the elements of control (IoT devices) in the network, and the existing regulatory environment will be needed to move us into this new world.
Next Up……Cities – “Smart City… Heal Thyself?”
Energy is but one part of the picture. In the next post, we’ll explore a few thoughts about the importance and current state/ evolution of design thinking toward the often highlighted topic of ‘Smart Cities’’. Energy powers the cities but what makes them ‘’smart’’, efficient, safe, effective and… ultimately more resilient? It goes much beyond marketing banter…. are we capable and ready to act?