Electric Salon on January 26, 2010
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
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.
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