Whether or not the current oil crunch is due to an actual shortage, or simply manufactured by shadowy interests, its effects are certainly real as it combines with the worldwide economic downturn and the very noticeable changes in our climate, signaling the end of business as usual for the global economy. It’s now up to each of us to decide whether we’re going to continue to try to eke out a profit making the stuff that got us into this mess in the first place, or begin to create new markets for technologies that will put our economy and our ecosystem onto a sustainable path. As a hard-core tech type it’s been difficult for me to imagine how we’d even begin to make such a huge change in the way we do business, but I got a few hopeful clues during my recent press tour to Canada’s high-tech belt outside Ottawa.
Although I’d originally set up the trip to visit Galazar, Tundra, Zarlink and the other chip makers who populate the QW 417 corridor, I was pleased to find out I also had a chance to see some of the fresh crop of green-tech startups that had sprouted since my last visit. I’m sure I’ll be reporting on lots of exciting stories from companies like
Blue Line,
Triacta,
Iogen,
Group IV, and
Plasco Energy over the next year, but the highlight of this trip was a conversation I had with Claude Haw, founder of the
Venture Coaches clean tech fund, and one of the area’s first green VCs.
In the world according to Haw, markets tend to evolve from the edge inward. That’s because large, entrenched industries like electric utilities or phone companies have a lot of inertia due to the huge capital investments in their core infrastructure that strongly resists any attempt at so-called "forklift upgrades." In the case of the telecommunications industry we might still be trying to access the Internet via 64-kbit ISDN lines if it had not been for the pressure exerted in the early days by things like dial-up bulletin boards, primitive IP telephony systems and third-party Internet service providers. As the edge evolved and began to diversify it placed increasing pressure on the core to evolve to serve it, giving birth to the lively mix of technologies and user-defined services that comprise today’s telecom infrastructure.
So what’s that got to do with green power? Consider Mr Haw’s thesis that the power companies are in precisely the same position that the phone companies were in 20-odd years ago and about to undergo an equally radical transformation because of what’s happening at the edge of their network. Much like the old telcos, today’s regional power companies are pretty close to regulated Soviet-style monopolies whose most complex interaction with their customers is hooking up a new feed or correcting a billing error. This worked fine for the first hundred years of their existence, but the situation is changing rapidly as energy costs and environmental issues are changing the way the once-passive customer behaves. And that’s where the fun begins.
Although it will take a couple of decades for the power companies to convert a significant fraction of their massive generating infrastructure to renewable (or nuclear) energy sources, there are changes at the edge of the grid that will happen much sooner and perhaps even accelerate the core’s evolution. Much as they try to resist it, the pressure is growing for power companies to allow anyone who is generating electricity that meets the grid’s voltage, phase and safety specs to sell it back at a competitive rate. Meanwhile, many savvy customers are also implementing their own energy management systems to cut overall usage, avoid excessive peak load charges and, where it’s available, take advantage of off-peak rates by shifting energy-intensive tasks to times when the grid has cheap surplus power to spare.
We’re already seeing utilities deploying one-way peak load management systems, but this is only the beginning. Once the utilities begin adapting their one-way distribution systems to work cooperatively with smart energy management technologies at the network’s edge they will be able to make better use of their existing infrastructure and use new services to increase their profitability. Within the next few years, we’ll see the smart power companies like Austin Energy and Florida Power & Light begin to deploy smart grid technologies that treat each customer like a node on a network that can negotiate power prices, regulate its consumption, or even back up the grid with power from rooftop solar panels or the excess capacity in parked electric vehicles.
Each one of these distributed generation, load management, and smart grid technologies represents a large and increasingly well-defined market opportunity for utilities, technology providers, and the entrepreneurs that help tie them together. Rapid adoption of the products and services that transform our power grid should help our economy ride out the worst of the disruption that’s occurring as prices for carbon-based energy sources begin to factor in their increasing scarcity and growing environmental impact. Once the transition is complete, the same technologies could become the foundation for a vibrant, sustainable economy. But, however the future actually unfolds, it’s a good bet that the investors and tech vendors following Mr Haw’s analysis today will be reaping a tidy profit tomorrow.
Tomorrow’s eco-entrepreneurs will use similar insights to create markets for the other sustainable technologies that will be necessary to pull our ecosystem back into balance and maybe even pull the economy back from the brink of a really ugly depression. Depending on how smart we are during the coming decade, we will look back on 2008 as either the beginning of an extended period of misery, or as the moment we all woke up and took charge of our planet’s future.
Comments? Questions? Great new green-technology news you want to share? Write me at
lhg at en-genius dot net or post your comments on our blog.
