The market potential for wireless in the so-called Smart Grid – the next upgrade to the electric-power distribution network – is enormous. But economics and other practical considerations will likely result in a fairly small opportunity here for some time to come.
I was having a conversation with a wireless firm earlier this week about the potential for broadening the application of Wi-Fi to those involving telemetry and such. Along these lines, the subject of the “Smart Grid” came up, as it always does when industrial applications are the topic. While there isn’t broad agreement on exactly what the “Smart Grid” is, the idea in a nutshell is to modernize the grid for demand, management, efficiency, reliability, and undoubtedly, improving supplier revenues, using advanced technologies. Such extends all the way to the consumer (the residence, appliances, and more; read on), so the market potential of the Smart Grid is by any measure or criteria broad, pervasive, and simply enormous. But I have serious doubts as to whether we’ll ever realize the potential here, and the reasons for such have only a little to do with the degree of technological risk involved or innovation required. Both of these are relatively easy to manage.
Since I focus on wireless technology, my concern here is that the balkanization resulting from solutions based on multiple wireless technologies will require more systems integration than is really indicated for cost-effective implementation. Sure, IP (maybe even IPv6) and XML will provide the common protocols, and gateways can be used to smooth out the incompatibilities, but it’s not as pretty as, say, Wi-Fi everywhere. I still believe that the evolution of Wi-Fi will serve every application from RFID to telemetry to industrial control to, well, everything that doesn’t require the long range (on the basis of an individual subscriber link) of LTE. All those other short-range wireless technologies – Bluetooth, Zigbee, etc. – get reduced to upper-layer or encapsulated protocols running over what becomes a universal PHY.
OK, such is not fundamentally necessary to realize the vision of the smart grid; like I said, the technology part is relatively easy. But something else is: money. The recent recession has pointed out that the US, and big chunks of the rest of the world, now lack the financial resources to move to a future of a more efficient and reliable power grid, not to mention the competing demands of universal health care (not just insurance, but the services themselves), adequate supplies of housing and food, and education for all, and many more, and, well, not to paint too grim a picture or to put too fine a point on it, we’ve got a lot of work to do in order to create the wealth necessary to sustain the demand for any kind of wireless nirvana – in any market. In short, the market potential of the Smart Grid, with a few exceptions in some emerging economies, will be severely limited for some time to come. And that’s really a shame, as the Smart Grid should be a priority.
Look, we all know that the power grid in the US is held together with scotch tape, glue, and spit. It’s a fragile web just waiting for the next big crash (I was just about get into an elevator on the 44th floor of an office building in Cleveland when the last Big One hit), and putting more load on what we have today isn’t a good idea – and that load is still growing, often in questionable directions, regardless. For example, while some go all ga-ga over the prospect (and now emerging reality) of all-electric and plug-in hybrid cars, a little systems thinking is required here.
Electric cars as a concept make no sense to me. Their range is severely limited. Their batteries require lithium than can’t be sourced domestically in sufficient quantity (think the oil wars are bad? Just wait for the lithium and/or rare-earth-materials wars). Sure, electric cars are zero-emission, but the power required to charge their batteries will most likely be sourced from a coal-, oil-, or gas-fired power plant somewhere, so those emissions are only deferred, not eliminated. I remain, yes, even after Fukushima, a big fan of nuclear power, but even I have to admit that plans here may have been set back, and perhaps significantly. So, add insufficient generation capacity to that fundamentally inefficient power distribution grid (and by inefficient here, consider: we can truck a tanker of gasoline anywhere with zero loss in the potential energy of the cargo, but lots of energy is lost over the kilometers of wire than connect generator to customer), which, as noted above, is also in need of hundreds of billions of dollars of repairs and upgrades. See my point? What’s being saved or enhanced by the rush to electric cars? Forget the money we don’t have; where’s the ROI? Did I mention these things require millions in tax subsidies, which are paid for by the rest of us, again with money we don’t have? And can you imagine the rolling blackouts necessary when all those short-range commuters arrive home at dinnertime seeking Amps to re-fuel their vehicles for that big night out? And we still don’t have the money to upgrade the grid – and likely won’t, at least for many years. Will ratepayers cough up more? That doesn’t seem likely. And the federal government is about to go (temporarily, anyway) out of business later today over budgetary (and other) matters, so don’t count on them anytime soon. What a world, what a world.
This is the traditional and fundamental problem with so many visions – they fail to consider the big picture, the interconnected systems nature of solutions, and just as importantly, the economics involved. Wired, wireless, or something else, vision alone is just the first step in a very long process. And, given both the global and US economics of today, perhaps very long indeed.
