Photo of me demonstrating an unusual thermoelectric generator
with NY Times Correspondent Matthew Wald.
On Wednesday I was invited to speak on a panel at the 2012 National Electricity Forum, an event sponsored by the U.S. Department of Energy, in Washington DC.
In the audience were a thousand power industry executives, regulators, and key industry service providers.
The event was kicked off by U.S. Secretary of Energy Steven Chu, a Nobel Prize winning physicist and former director of the Lawrence Berkeley National Laboratory. Our panel took the stage immediately afterward.
Other panelists included Marina Gorbis, Executive Director of the Institute for the Future, John Petersen, President of the Arlington Institute, and our Moderator Matthew Wald, Senior Washington Bureau Correspondent for the NY Times.
As the kickoff speaker on the panel, my message to them noted that the power industry is an industry that is under attack. An attack not being carried out by terrorists or invading armies, rather it is being attacked by emerging new technologies that have been advancing quickly and are currently beginning to boil around the edges.
My advice was that they begin to make transition plans for dismantling the industry, plans that will include dismantling our national grid and replace it with a series of micro grids. But it included much more than that.
Understanding the National Power Grid
During the early years of distributing electricity, Edison's direct current (DC) was the standard for the United States and Edison focused heavily on retaining his patent royalties. DC worked well with incandescent bulbs and motors, which the principal load of that era. DC systems could be directly tied to storage batteries, providing the all-important load-leveling and backup power during interruptions of the generator.
At the time, there were no practical AC motors available. Edison invented the first electric meter to bill customers for the power they used, but this meter only worked with DC. All of these technical issues gave DC a huge advantage. However, progress stalled out because they were not able to transmit DC beyond the 1-2 miles range of the generator.
Counter to what most have been led to believe, alternating current (AC) had its origins in Europe before the time of Tesla, but didn’t progress very far until it caught the attention of George Westinghouse. Westinghouse put together a team run by William Stanley to explore ways to use AC current. In 1888 Tesla partnered with Westinghouse Electric to commercialize his own particular version of AC, which caught on in a big way.
Creating the 110-Volt Standard
Edison's DC distribution network consisted of lots of generators and lots of wires. There were no transformers to vary the voltage. Instead, the system operated at the same voltage level throughout the network. As an example, a 100-volt light in a home or office was connected to a generator producing 110 volts, with the line lost accounting for the drop in voltage.
The 110-volt standard was adopted because it was convenient for light bulb manufacturers to work with. They could produce a high-resistance carbon filament bulb that could withstand 100 volts, and still yield enough illumination to be economically competitive with gas lighting. At the time it was felt that 100 volts was not likely to present a severe hazard of fatal electric shock.
Edison, the Elephant Slayer
The world’s first AC hydroelectric plant began operations in 1889 at the Williamette Falls Station in Oregon City, Oregon, and the same company began work on an even bigger plant at Niagara Falls.
When Edison got wind of this, he set out on a national campaign to warn the world of the dangers of AC power. Through a series of town hall meetings he demonstrated how terrible AC current was by rounding up stray cats and dogs and electrocuting them on stage.
He also tried to popularize the term for being electrocuted as being "Westinghoused".
Years after DC had lost the "war of the currents," in 1903, Edison’s film crew made a movie of the electrocution of Topsy, a Coney Island circus elephant which had recently killed three men. A 23 second video of the “Electrocution of Topsy” can be seen here on YouTube.
The Birth of a National Power Grid
With Edison’s failure to find a long-range transmission system for DC power, a national AC grid was born.
Even though the “current wars” official ending can be traced to the 1891 International Electro-Technical Exhibition in Frankfurt Germany, some cities continued to use DC well into the 20th century. For example, central Helsinki had a DC network operating until the late 1940s, and Stockholm lost its last remaining DC system in the 1970s.
Since power generation through hydroelectric plants such as the one at Niagara Falls were far away from the population it served, and later coal-fired and oil-fired plants were dirty and noisy, power generation was out-of-sight and out-of-mind for the average consumer. They didn’t care where the power came from as long as long as they had power.
For the past century, nations all over the world have invested heavily in building national and international grids, based upon the assumption that local power generation was not possible. This, however, is about to change.
U.S. Energy Secretary Steven Chu
Introducing the Game-Changers
At Wednesday’s 2012 National Electricity Forum, U.S. Energy Secretary Steven Chu commented, “If someone invents a cheap, efficient form of storage, it will be a game changer.”
Secretary Chu also suggested another game-changer would be, “Breaking down the barriers between utilities so that the variability of generation can be leveled out over a larger area.”
Both of these game-changers already exist.
One technology I demonstrated at the Forum, (shown at top) was a demo version of a thermoelectric generator being developed by Phil Watts in Longmont, Colorado. This local power generator works on the temperature differential of water, with a very clever system for routing geothermally cooled water on one side of the chip and solar heated water on the other. His secret ingredient is an unusual nano-fluid that causes the system to operate with great efficiencies when there is only a minor temperature differential, even at night.
Phil’s technology is just one of many I’ve seen that solves the game-changing issue of local generation. You can see his patent application here.
The second company that I talked about at the Forum is the first I’ve seen that efficiently solves both game-changer problems – local generation and storage.
Since I am under an NDA and not able to discuss this technology in great detail, I will refer all specific questions to the company’s attorney, Karl Dakin – (Feel free to arrange a demonstration for yourself).
What I can tell you is this. The company is a startup in south Denver founded by a physicist with a strong entrepreneurial background. He’s assembling a formidable team to move the technology forward.
The technology will reside in a box that sits adjacent to every home. A series of boxes can also replace a local substation. Power can be generated for less than 2 cents per kwh. Each unit can produce three times the power needed for the average home, and whatever power is unused can be efficiently stored from one day to the next.
I’ve looked at hundreds of energy related inventions over the years and none I’ve seen have the potential of this one. The technology operates silently inside a container without the need for any external power, water, or other inputs. There is no pollution. And the best part is that it serves as a mass energy storage system, efficiently storing power from one day to the next.
I can also point out what this technology is NOT. It is not a Tesla device. It is not a solar, nuclear, geothermal, or fuel cell device. Also, it does not involve zero point energy or any other mystery science.
If we work under the assumption that both game-changing issues have been solved with this technology, the next discussion will center around commercialization, adoption rates, and rethinking the industry.
Even with a near-perfect solution for local power generation and storage, any new entrant will be faced with huge amounts of resistance. Resistance to change is a built-in byproduct of human nature. But couple that with legacy infrastructure, a century worth of reinforcing public policy, and the seemingly infinite resources of public utilities. Calling them a formidable opponent is indeed an understatement.
But the game quickly shifts once a large player forms some sort of alliance with the startup and takes them under their wing. Watch carefully to see who decides to cut this kind of deal.
The Adoption Curve
Assuming that a large player aligns with the startup in the near future, how will the adoption of this technology unfold?
Over time, the national electric grid will be converted to a series of micro grids. Grids could be eliminated completely, but there are advantages to being on some sort of a grid as I will explain later.
Since the power industry in unlikely to be an early adopter, look for local utilities and cities to step up to the plate. Industry standards and long-term visioning will lag several years behind the early adopters.
Transition planning will be difficult with the first few installations. Considering all parts of the equation, at what point will one power source be turned off and the new one be turned on?
Businesses, states, and even countries will vie for manufacturing, distribution, and installation rights. There may even be a series of auctions used to decide the winners. Product manufacturing, even with multiple players working with highly automated plants will take years to make a large dent in the current market.
As a best-case scenario, with optimal adoption rates, it is unlikely that more than 10% of the market can be converted over in less than a decade. However, the 2nd decade will see almost universal adoption.
Working from a Mindset of Scarcity
As a society, we have been conditioned to think that electric power is a scarce commodity. Twenty years ago we also thought information storage was a scarce commodity. Now we don’t even bat an eye when we store large photos or videos on our computers.
Over time, the price of power will begin to drop. As we’ve shown with progressively cheaper storage, usage will dramatically increase.
Rather than setting the thermostat to 62 degrees and freezing during the winter, what if we could set the temperature at a truly comfortable degree and not stress about going broke from it or overconsuming?
Being cost conscious of every kwh we use, we have gone through a period of sealing our houses to the point where they can no longer breath. A tightly sealed house creates a very polluted environment with the natural outgassing and chemical emissions of carpet, furniture, paint, and cooking products getting embedded in every wall. With this in mind, a draftier house can actually be a healthier house, and lower cost energy will radically realign our thinking in this area.
Power Laws of Networks
Information networks are a different breed of animal than power networks …or are they?
Over the years we have developed a number of “laws” to describe the value of having networks of people connected people. Here are three prominent laws used to describe the change in value as networks went from one-way broadcasts to two-way communication networks.
- Sarnoff's Law - The value of a broadcast network is directly proportional to the number of viewers.
- Metcalfe's Law - The value of a telecommunications network is proportional to the square of the number of users connected to the system
(images - credit UbberNoggin)
- Reed’s Law - The value of large networks, particularly social networks, will scale exponentially with the size of the network.
When it comes to a networked power grid, we currently have a poor understanding of the value that can be derived from it. It is fairly clear that the value increases dramatically if users are both sending and receiving power. It’s also clear that if power is somehow coupled with information it becomes exponentially more valuable.
Reinventing the power grid is long overdue. Over the past decade the number inventions has escalated, and caliber of the technology has greatly improved. If the two technologies I’ve mentioned fail, there are thousands of others quickly lining up to take their place.
Over the next couple decades we will witness the dismantling of the national power grid, both in the U.S. and every other nation on earth. If the U.S. fails to act quickly, several other countries will take the lead and the competitive pressure of other nations cannot be silenced by reinforcing policy decisions or failure to act.
This will be a very difficult transition because most wealthy investors have at least some of their portfolio invested in energy-related securities. This will result in many losers along the way.
Current public policy-driven efforts to deal with climate change issues will disappear, as technology will provide a much better solution.
Transformation of national grids will lead to transformation of the global economy, but it won’t solve all the problems. In fact it will create a whole set of new problems, but hopefully a better grade of problems.
Author of “Communicating with the Future” - the book that changes everything