China and Energy

China Leading Race to Make Clean Energy

This might be, on the face of it, alarming.  However, this is focusing on the generation portion of the Smart Grid.  This article: "The Smart Grid in 2010 - Market Segments, Applications and Industry Players" from Greentech Media (perhaps the best source of information on the Smart Grid)  gives and extensive breakdown of the types of businesses that will be involved in the Smart Grid.  I draw your attention to Figure #3 on page that has their idea of the rollout of the Smart Grid.  A significant portion of it is IT an area where the US still holds a substantial lead.  Another area the US has a huge amount of experience is in system integration.  An important aspect of making this work is the development of common standards between the US and China.  This will be a major topic of future Electric Salons involving several of our partners including Silicon Valley China Wireless Association and David Gardiner and Associates, LLC.

Observations on Granovetter's talk

After the talk several people approached me and pointed out:  "it is all well and good to know how we got here, but now that we are here, how do we change?'  Of course generation is an issue, but consumption is an issue as well.  An other question is: "given today's consumption, can isolated generation provide for our power needs?'

There are a number of things to consider.  One is the type of generation.  It seems conceivable that natural gas, petroleum or even coal might be used to create small power plants, but greenhouse gases and the transportation of the fuel would still be an issue.  Granovetter argues that because the transmission was more technically interesting  engineers focused on it to the exclusion of solving such problems. 

It is important to begin investing in the future today.  Rephrasing the question above, we might ask "if we start now, will isolated generation be able to provide for our power needs in 20 years?"  At this point I doubt it.  This will be a topic of future Electric Salons.

I encourage your comments on the subject.

The Electric Salon January 26, 2010 - Mark Granovetter

Electric Salon on January 26, 2010

Publish Post

Is the future of the Smart Grid the Past?

 The January 26th 2010 meeting of the Electric Salon featured Mark Granovetter.  Granovetter has done extensive research on the formation of the electric power industry.  One of his main points was the evolution of the industry into centralized generation as opposed to isolated generation. Centralized generation is generation that takes place in a central facility and is distributed by transmission lines to the users (loads).  Isolated generation is where the generation is local.   This question will be a theme of the Electric Salon.  


The meeting was opened by Don Steiny, he described Smart Grid as like six blind men describing an elephant. Some think SG is solar, some think sensors, some meters etc

SG is different from usual Silicon Valley project in that capital requirements are huge. In the Valley we think a 1 billion project is big, but in the power industry, 1 plant can cost a billion.

In addition, the power industry is highly regulated which can make it very difficult.  The Electric Salon is a place to bring people together that see different parts of the elephant so we can get the whole picture.

Mysteries of Silicon Valley:

            What is the Smart Grid and what makes it so smart?

            To understand this second mystery we need to look at the history of the electrical power industry from the 1870s to the 1920s, when power industry took its modern form. We tend to think that the technology that becomes dominant does so due to the advantages of that technology. In terms of the electrical power industry, this tends not to be the case.

            Lets look at Thomas Edison, a young man who came out of nowhere. He was just some guy with lots of technology in his background who was bad at finance. He was bumming around trying his hand a various trades, one of which was telegraphy. He was an expert and he happened to get a job in the New York Stock Exchange. He got a reputation as a problem solver because he was the guy who could fix the machines. This is how he got to know JP Morgan, who provided financial backing for Edison at first.

            It is interesting to note that Edison did not invent the light bulb. It was invented by Swan. Edison just made lots of experiments and he built a better bulb. However, Edison was always more interested in systems then in individual devices.

            The electrical industry took the shape it has today through a series of choices between alternatives.

            The first choice concerned the distribution system for electrical power; the choice was between the alternatives of a central generation/distribution model and a isolated/local generation/distribution model. As it happened, Edison favored the central distribution model, even though it turns out in many cases that local distribution is more efficient. JP Morgan favored local distribution (he felt it would be more lucrative). Oddly, Edison also favored direct current over alternating current, even though direct current is not as effective in transmitting power over the long distances required by the central distribution system.

            In order to appreciate the second set of alternatives, it is useful to look a the model of the telephone system. When this system developed, the same company  provided the telephone equipment and the telephone service; Bell provided the service and its subsidiary, Western Electric provided the equipment. A company that provided both the equipment and the service is one alternative. The other alternative is for one company to provide the service and another company or companies to provide the equipment.  This later alternative was the one taken by the electrical power industry.

            A third set of alternatives in the electrical power industry was between smart meters (which were invented in the 1890s and which were more efficient because  allowed the company to charge more for power in peak load times and tended to level loads), vs constant meters. Smart meters were rejected because the constant meters were more profitable.

            A fourth set of alternatives for the power industry was the choice of distributing ac or dc. As I mentioned  Edison favored dc, which did not fit with his preference for central distribution, since it is harder to transmit dc over long distances. One reason for this preference was that Edison’s rival Westinghouse favored ac power. An interesting story which illustrates how much Edison disliked Westinghouse and ac power concerns capitol punishment in New Youk. Edison persuaded the NY authorities to use ac power in their electric chair to electrocute prisoners. Edison then noted that “AC power is deadly”.

            Prior to the 1920s the power industry developed with  local distribution which was more efficient and cost effective. Despite these advantages, the central distribution came to dominate the power industry, not because it was better, but because individuals (such as Edison) used their financial, technical and political resources to push the industry in the direction of central distribution. Further, while both central distribution and local distribution presented engineering problems, the problems presented by local distribution were ordinary and uninteresting. The problems presented by central distribution were more challenging and engineers were more interested in solving them. As a result the problems presented by central distribution were solved earlier. Central distribution came to dominate the power industry the forces in its favor were more politically powerful that the forces favoring local distribution.

            This was the case even though central distribution has big liabilities. For example the widespread disruption that occurs when there is a big blackout would not happen with local distribution.

            The same analysis applies to why we do not jave smart meters. Smart meters were initally developed in 1890s but, even thought they were more efficient and allowed electric loads be leveled, they were rejected by the power industry felt the alternative meters produced greater profits.

            The shape of the current power industry was not shaped so much by the techical aspects of generating and distributing power as by individuals mobilizing financial, technical and political resources through their social and professional networks.

Moral: If you want to anticipate the future shape of the power industry and the smart grid in 20 years, do not just look at the technical problems and the proposed solutions. Instead look at who is advocating which technology, how they are organized, and what their financial and political resources are.

Question: Why revisit this now?

Answer: Book by Hersh. Choices creating issues physical limitations of grid complexity

               Difficulty of management

               Pollution

Question: Given the presence of the past, what will happen in the future?

Answer: Must study-all depends on social contingencies-who-social organizations-finance

               For example Shockly and Silicon Valley. He invented transistor, moved here  and attracted some of smartest people here to work for him. He could have had a company that dominated the valley. But he was a jerk to work for and many of the smart people he attracted here could not stand him and left to start their own companies.

Question: Why did power system not develop like Bell telephone system?

Answer: Two reasons: First, bell system provided both telephone service and telephone equipment. Power industry distribution and equipment provided by different companies.

Second: It made sense for bell system to be regulated nationally, since it needed to be nationwide to work. The power industry worked to be regulated on a state  basis or municipal bais , since it was easier of the industry to manipulate and control state and municipal  regulators than it would be federal regulators.

How the power grid works

I found this excellent primer on the power grid: http://science.howstuffworks.com/power12.htm

Stanford Smart Grid Series - Efrin Ibraham

Last Wednesday I went to the first in a series on the Smart Grid.  It was an overview by Efirn Ibraham from EPRI  (Electric Power Research Institute).  He is a compelling and accomplished speaker and EPRI has some of the best available data.  Among other things he recommended looking at NIST Smart Grid Interoperability Roadmap. This paper provides a roadmap of the development of standards so that there won't be many little grids, but one Smart Grid where energy can flow to where it is most needed.

There are several points Ibraham makes whenever I see him that are somewhat surprising.  The best way to see the point of view of EPRI is to look at the document EPRI Prism Analysis.  This shows a proposed mix of energy sources that can meet carbon reduction goals and provide enough energy.  Note that renewables are only 15% of the mix.  The economics of solar puzzle me because solar panels are currently too expensive for most people to afford, yet they are subsidized by governments and utilities companies.  The consequence is that our taxes subsidize something most of us do not benefit from.  Thought it may be argued that the use of more renewables benefits us all, subsidizing the wealthy may not be the best path.  I am agnostic about this, but it is intriguing.

What do the utility companies get out of it?  Ibraham recommended a paper, The Power of Five Percent,  which show that the marginal cost of the last 5% of power is huge so reduction in peak demand makes huge returns for the power companies. 


Finally, I want to recommend that you look at this organization The Gridwise Alliance for some ideas of what is being pushed.

It is rare that even a simple project will go completely as planned.  The Smart Grid is an ill-defined scheme by hundreds of countries and many thousands of businesses so anything we hear now needs to be taken with several grains of salt.  That is why I am bringing together people with different views so we can use our own intuition to make better guesses.  Please come and contributed to The Electric Salon