Smart Grid is like Lego Land

As I was cleaning out the garage the other day I ran across several big blue Rubbermaid tubs stacked up in the corner.  Opening the lids I find toys safely sorted and stashed for future use.  My three kids are in their mid 20’s to early 30’s.  These toys survive and are kept because they were the most played with.  It got me thinking about what was so fascinating about these three bins.  One bin was Lego blocks, one was matchbox cars, the third was people—GI Joe, Star Wars, Power Rangers, Transformers, Barbie.  Standing up against the wall behind the bins was a large piece of masonite painted with streets.

What struck me as I thought back over the many times I saw my kids and their friends play with these toys that while the manufacturers each tried to create an ecosystem where parents were forced to buy more and more components to make the play experience ‘whole’, kids mixed and matched them imaginatively to create their own play experience.  Did you know Barbie can fit into a GI Joe uniform and carry a plastic rifle?

So what is all this nostalgia about, you ask?

One of the valuable lessons we are learning early in the smart grid era is that getting to the promise of smart grid is about more than smart meters, sensors, gadgets much as the barons of the cleantech world would have us think. Their world is the constant search for the next big deal so they merge and acquire, slice and flip, invest and harvest products and assets to extract the maximum profit. But their contribution is to turn on our imagination about new ideas, new ways to combine Legos, cars and people to make new things we didn’t even know we needed.

The dukes of the utility kingdom often have a different idea.  They want to reduce costs, gain more operating control over the system, and stay out of trouble with their regulator by complying with the king’s RPS, emissions reduction and smart grid rules.  They get paid not to maximize profits but to assure reliable service.  Spend too much and they get hammered by the king who cuts their price increases back to levels that splits the baby between investors and Main Street.  The dukes of the utility kingdom see all this cleantech mischief and get worried.  Will these cleantech barons come for us next transforming our safe, reliable, dull but profitable kingdom into something faster growing?  But what can we do? Oh we have an idea!  We’ll keep the king happy by helping him solve his emissions problem by switching all these cars and trucks from oil to electricity.  The king will be happy and we can finally grow again.

Along come politicians with aspirations of higher office.  They embrace this new idea after testing to see if it sticks to the wall or gets cast aside by vocal advocates.  In a time long, long ago inflation and ambitious construction plans lead to rising utility rates and the natives got restless.  The king responded by punishing the utilities for causing the problem and introduced wholesale competition to let others build new power plants and forced utilities to compete.  This worked so well the king let individual customers shop around but fearing volatility in prices would spook Main Street he order those bad, bad utilities to freeze rates.  In a remote kingdom called California the policy backfired and the lights almost went out.  So the king tried to put the competition genie back in the bottle, but it lingered on the wholesale side of the business just enough to punish utilities some more for causing another mess.  While the king likes this new idea from the dukes of the electricity kingdom—they bungled it the last time so he invites the barons of cleantech to help the dukes to make sure it is smartly done.

Time passed, the good economy turned sour, and everyone needed hope and change.  The old bums were kicked out of the king’s parliament to be replaced by new bums with ambitious spending plans and spend they did on many new programs to save the planet and transform the kingdom in their own image. Now it was time for the dukes of the utility kingdom to join forces with the barons of cleantech to get the king to spend money to achieve his politicians’ aspirations while helping them grow and prosper.  We need an idea to drive this plan forward.  Something smart.  Something that can’t exist without the dukes’ power grid and the cleantech barons gadgets.  Ah, Ha!  Smart Grid!  Perfect.

You get it, don’t you?

The more our politicians mess with the laws of nature and markets the more mischief they cause.  Sometimes they know what they are doing, but mostly they are responding to the squeaky wheel of change some lobbyist can believe in.  They have only two tools in their tool box: Tax and Spend!

Take that Lego set you buy at the toy store with the picture on the box of the space ship you can build with the pieces enclosed.  Give it to your kids and what do they do?  They combine the Lego pieces with the million other pieces they already have and build something entirely different with it.  You could just as easily saved the old Lego boxes and grabbed a handful of existing Lego pieces, put them in the box and handed them to the kid as a brand new toy instead of spending $29.95 for something you already had at home. The dukes don’t get it but the barons of cleantech are out to control the market for Lego boxes.

The genius of Smart Grid is that it unleashes our imagination to see the electric power grid in new ways other than what the dukes of the electricity kingdom taught us.  The genius of smart grid is that the new people coming to the party have new ideas from IT, from operations technology, system integration, automation, power electronics, communications, entertainment and a hundred other areas not related at all to the electric grid—and they all want a place on that masonite roadmap we painted long ago.

So the power grid turns into a giant monopoly game with new streets to acquire and all those new people using all that cleantech money are going after the dukes of the utility kingdom seeking to merge his kingdom with their to create scale, to sell more gadgets to more kingdoms to stimulate growth or improve profits.

The king is starting to get nervous because Main Street is beginning to push back and ask ‘how much is this going to cost me?’

Yet deep down where we feel it but can’t yet explain it, the people on Main Street think that smart grid may turn out to be a good idea not for the reasons the dukes of the utility kingdom believe, not for the profits the barons of cleantech want, and certainly not for the change the politicians and the king dream of for the future—-but because smart grid allows us to combine the energy, utility, communications, information, security, entertainment and home shopping pieces in new and different ways that frees us–the people– to be self sufficient, to be more in control of our own destiny, to force all these dukes, barons and politicians to compete for our business.  We like this toy box!  Can I get an iPad with that new service?

That is the true promise of smart grid—CHOICE and the freedom to live our lives the way WE want not the way the king, his politicians, the barons or dukes planned for us.

And one more thing, the king, politicians, dukes and barons thought that the smart grid would teach us how to follow the rules of energy efficiency and learn to live with their dynamic pricing rates, but Barbie learned how to read her smart meter there in Bakersfield—-and is she pissed!

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