The Smart Grid and Disruptive Thinking

Silicon Valley loves buzz words almost as much as new technology.  Entrepreneurs must have “disruptive technologies” to attract funding from venture capital firms.  The migration to a Smart Grid needs disruptive technologies that will range from new materials that increase energy intensity in renewable energies to new forms of energy storage.  But more than that, we need disruptive thinking to gain the full benefits of the Smart Grid.  Borrowing a couple of well-used buzz phrases, we need to think outside of the box and expect some paradigm shifts.

Many discussions about Smart Grid solutions focus on disruptive technologies without examining the underlying implications to business models and processes.  This is akin to buying an expensive, high-performance car and then pushing it down the street.  When results don’t measure up to expectations, the technology is inevitably blamed, heads roll, and new consultants are brought in.  When we were the new consultants, the highest priority task was usually a careful review of processes asking a few questions such as, “why do you do this?”  Once we had reviewed and revised processes, along with identifying skills and training gaps to assist employers in reskilling workers, the expensive technology investments did deliver the desired results in productivity improvements, reduced costs, and increased employee and customer satisfaction.

Smart Grid technologies enable changes in the electricity supply chain that will be disruptive to existing business and regulatory models.  Decreasing prices for new solar technologies and new financing options make distributed generation of electricity more likely on a greater scale in many regions of the country.   In California, 61 school districts are receiving American Recovery and Reinvestment Act (ARRA) tax credits to offset the costs of solar panel installations and build energy-efficient classrooms.   The state schools superintendent also announced an initiative that focuses on planning, procurement, and operational processes.  Called the Schools of the Future team, it includes representatives from education, state, labor, and business to identify and remove regulatory barriers, find potential funding sources, and build best practices about smart energy management in schools.  This is a great example of disruptive thinking to accompany disruptive technology.  One financing innovation I’d like to see is creation of public/private partnerships that let California polluters offset carbon emissions with investments in these school deployments of solar and building energy efficiency technologies. 

We should consider this decade the Great Electricity Restructuring.  Regardless of where you see yourself in the electricity supply chain it’s an opportune time to ask if there’s a better way to make electricity, transmit it, or use it.  For utilities, there are growing numbers of Smart Grid technologies that improve the safety, reliability, and delivery of electricity.  For consumers, the mainstreaming of home energy management solutions and energy efficiency solutions offer many new options for intelligent consumption of electricity, as well as residential generation opportunities.  Regardless of where in the supply chain that disruptive technology is introduced, it would be a mistake to presume that organizational behaviors (processes) or home operations shouldn’t have some paradigm shifts.  The Schools of the Future team offers us a teachable moment about the application of disruptive thinking with disruptive technology.