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An “iPhone Moment” for Electric Utilities in 2018?

In 1977, I worked as an electric meter reader, before going to university to earn my Electrical Engineering degrees. In 2012, I was directing the largest smart meter deployment in Canada, replacing some of the same meters that I had read three and a half decades earlier. In between, I worked for 20 years in telecoms, living the Internet and wireless revolutions, and then mostly with electric utilities for the last 15 years.

As this year gets to a close, I would like to reflect on the changes that technology has brought – or could bring – to utilities and what it may mean for the future.

In 1987, telephone and electric utilities were both in the wire business – perhaps 20 AWG for telephone and 4/0 for electric, but mostly copper hanging on wood poles and serviced by a fleet of bucket trucks. Telecom companies were then telephone companies, just experimenting with wireless (the first cellular call in Canada had occurred just 2 years earlier) and the Internet was still primarily a military research technology (commercial service only started in 1989). Phone and electric utilities were highly regarded companies, imbued with a duty for public service and providing lifelong employment to their loyal employees.

By 1997, I owned a cell phone and I was running what was then the largest Internet telephony network (but tiny in comparison to today), competing with international telephone carriers. However, phone companies were in denial on the Internet, seeing us as a temporary nuisance, and trying to control user experience on cellular phones, like they had been doing for a century with rotary phones on landlines.

In 2007 the iPhone was launched. Not only did it merged the Internet and wireless phone, but it profoundly changed the business of the telecom companies. Before the iPhone, the wireless carriers were subsidizing cheap handsets to get customers to lock in for 3-year contracts and using the carrier’s proprietary and closed services. But the iPhone upsets that balance of power. Apple kept control on the user interface, given choice to consumers to buy the best apps from developers. However, by fostering more innovation, the carriers’ networks got more (not less) valuable through this change. People spent – or wasted – more time on their smart phones, generating more revenue for carriers and hardware manufacturers as network capacity expanded through successive generations of technology.

In the meantime, not that much has changed in the electricity business – my father, who worked as a dispatcher at Hydro-Québec until the 1970s, would probably recognize the network today, although he would certainly envy dispatchers using electronic maps rather than the paper ones he used.

However, 2017 has seen the rise of inexpensive solar energy and energy storage. Could 2018 have an “iPhone moment” for electric utilities? After all, the Internet brought us on-demand access to information, like energy storage is bringing us on-demand power. Wireless phones allowed us to cut the cord, and so may distributed solar energy, at least to some extent. The parallel is striking.

Now who will be the next Steve Jobs? Elon Musk, perhaps?

All my best wishes for 2018!

This article was initially published at http://benoit.marcoux.ca/blog/an-iphone-moment-for-electric-utilities-in-2018/

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As much as an "iPhone moment" might be interesting both NIST and NREL find that to go off grid for a typical residence is more than $40,000. Add to that that for Ottawa, Canada - in June an average residence needs 7 KW of PV and in January it needs more than 35KW of PV. Either the residence needs to put in a lot more PV installed that will be idle most of the year or a huge amount of storage that gets cycled once or twice a year.

Unlike cell phones and minutes, kilowatt-hours don't "rollover".

If you are living in Florida, Arizona or other areas closer to the equator - the summer/winter supply and demand mis-match is much less. The further north you go, the more the mis-match makes this idea of "cutting the wires" out of reach for most people.

Energy efficiency, access to natural gas for heating and cooling, significant reduction living space, lifestyle decisions about how to live and what to forgo, all can make big changes in these requirements.

Beyond that here is the real rub - why would I tie up $40,000 in capital for no real change in what I am getting? The iPhone offered huge changes in funcationality, that going off-grid does not. A small generator for most people can deal with the largest frustration they have - power outages. And at least for the batteries the return on investment is typically beyond the life of the battery!

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Thanks Doug. I agree with you, which is why I wrote "to some extent". However, it is becoming more and more cost effective every year for a home or business owner to add solar panels simply to get energy at no marginal cost during the day, and buying from the utility for the balance of the needs. I know that this fundamental trend is worrying many Canadian utility executives I know. 

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