How Will Electric Utilities Respond to the Smart Grid's Data Deluge?

 

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Mahesh Bhave, a professor of business strategy at the Indian Institute of Management in Kozhikode, India, is not the first person to predict the imminent transformation of the traditional electrical utility. However, he is perhaps the most recent who has dared to do so.

In “ICT Companies as Electric Utilities of the Future,” Bhave makes that case that the “electric utility of tomorrow is more and more an information company than an energy company.” The argument that follows explains that:

As every watt becomes more valuable, we will closely monitor and measure it. Information intensity of energy will rise at every step in the value chain from generation to consumption in homes, factories, and offices . . . Very soon, for there is no technical barrier, we will differentially value and track brown watts from coal, green watts from solar panels, LED watts, microwave watts, and so forth. We will know usage by room, time of day and appliance. We will be surrounded by cell-phone like displays on all home appliances – TVs, refrigerators, fans air-conditioners and more.

The trouble with this otherwise compelling analysis starts with the seemingly harmless words, “Very soon, for there is no technical barrier . . . .”

At least in the United States, the absence of technical barriers has been necessary but not sufficient to trigger meaningful change in the deeply entrenched institutional and regulatory practices that define today’s electric utilities. Inertia has an immensely powerful grip on electric utilities. Technology alone is seldom strong enough to slay that hobgoblin. Neither is the smart grid unless it comes with smart policies.

Source: Forbes