Several trend waves are heading for a thunderous collision and are going to change the course of the utility sector. When billions of dollars were poured into energy “cleanies” and “greenies”, few thought about the third order ramifications and potential by-products. But, alternative energy is just that. It means we don’t need the same old companies providing the same old things that they’ve provided for the last 50 years. In fact the alternatives are starting to line up nicely. Like the telecommunications infrastructure that has rapidly gone from big infrastructure to mobile wireless due to rapid advancements in battery power, bandwidth, and miniaturization, so goes the utility sector. The three big waves that are about to hit are miniaturization and efficiencies through nanotechnologies, improvements in battery power and storage systems; and improved human economization of energy. There are a lot of concerns surrounding reliance upon a centralized power grid and its vulnerability to cyber-attacks, terrorism, solar storms, natural disasters, and other threats. Furthermore, utility companies remain over-regulated and slow to react. We all know just how well investing in telecom went for some of them. It’s great to get in, but you’ve got to know when to get out! Recent data in the electric generation utility sector saw a decline in power utilization– off by more than 6%. This is a red flag that we should all be watching. Smarter light bulbs, more energy efficient computer systems, and smarter homes are now chipping away at the power industry. Look at technologies, like piezoelectric energy harvesting, which use conductive strips to transfer vibrations from foot traffic into electrical energy. The “generate your own” power through foot traffic, wearable solar harvesters, and dozens of new technologies will continue to add incremental efficiencies while slowly siphoning users from the grid.
The decentralization trend is taking place in clusters as organizations, for their own conservation means, drop off conventional grid models and create their own. While this trend is only a spark, it will likely become a flame. Take companies like Bloom Energy whose fuel cell “server” solution (which is about the size of a parking space) can serve over 100+ homes or 90,000 square feet of facility space with a cost that is currently about 30-40% higher than electricity off the grid. Are most alternatives pricier right now? Yes, but that could change with a variety of catalysts that might include smarter manufacturing, price fluctuations in commodities, regulatory changes, further economies of scale in productions, and impending breakthroughs in battery storage technologies. The Pacific Northwest National Lab has developed a solid oxide, small scale, fuel cell that has the potential to be affordable for the average home owner. Fuel cell technologies have traditionally been expensive and, like Bloom Energy, reliant on other catalyst fuels, like natural gas. But like the telecom backbone, that has gone through phases of weaning itself off of a mega national infrastructure through wireless, satellite, and miniaturization, so will the energy backbone. Who would have thought that in a matter of years wireless routers would transform into chewing gum sized Mi-Fi devices that go everywhere? As if fuel cells sprouting up everywhere, wind energy, and solar aren’t enough, biomass reactions are also hot and getting a lot more traction. Another promising development is the creation of localized energy from biomass. This is a natural additive to logging operations, farms, ranches, and large corporations that create recyclable biological refuse. Incorporating these systems into operations is often a more local effort taking place closer to consumption. And then there’s Bechtel who is working with Babcock & Wilcox on pushing out small modular, nuclear reactors that could be loaded on flatbed trucks or railroad cars. It may take a while, but as the green and lean alternative power sources continue to improve, the stodgy old utility market is headed for a major makeover. TD
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