9 Dec

The Digitization of the Utility Industry: The impact of Moore’s Law and Metcalfe’s Law – Part I

first_imgAs Moore’s Law turned 50 this past Sunday, it’s amazing to see how much this ‘law’ is impacting on the Utility Industry. Back in 1965, Gordon Moore extrapolated that computing would dramatically increase in power, and decrease in relative cost, at an exponential pace. (See Gordon Moore’s Thoughts on the 50th Anniversary.) This insight, which became known as Moore’s Law, became the golden rule for the electronics industry, and a springboard for innovation.Now in the Utility Industry, the impact of Moore’s Law in what’s become known as the ‘Smart Grid’ is not new news. It’s been around for years. Do a search on the internet for Moore’s Law and Smart Grid. Multiple great papers & articles have been published over the years. Given my own personal background and role it should not be a surprise that I’ve been on about this for a while now. (See this blog from 2012.) However I’d state that it’s only in the past 12 months or so that it’s become a lot more mainstream. Specifically as it relates to the theme — the ‘Digitization of the Energy Industry’.At this year’s DistribuTECH, Dr. Michio Kaku’s excellent keynote was all about the Digitization of the Utility Industry, with Moore’s Law the driving force behind it. At Bloomberg’s New Energy Finance Summit last week in New York, Moore’s Law was a key theme throughout the 3 day event. In his “State of the Industry” keynote, Michael Liebreich referenced time and again the impact of Moore’s Law — calling out the similarities between the PC industry and both the photo-voltaic AND storage industries. The key takeaway being, why are people surprised by the current trajectory of PV and Storage…it’s just Moore’s Law in action.So before you say “hang on a minute,” the Utility Industry is undergoing huge disruption and what has Moore’s Law got to do with this? Let’s look at the main causes of this disruption below, and for each one ask yourself if Moore’s Law did not exist, would these disruptions have come to pass?Integration of Renewables ‘Prosumer’ or Utility scale renewables being added to the grid. More PV, more Storage, more eV’s coming. Consumers want to participate in the market as they have their own energy source. It’s now economically viable to install your own renewables, something 5 years ago was hard to do without some sort of subsidies…All about ‘Make energy Personal’.Customer Engagement Utility ‘customers’ are looking for more engagement, prove to me more value, help me save more, tell me my energy usage now, give me info via my bill or an app to tell me something.. or I’ll complain via social media on my smart phone. This is now reality in today’s connected world.Connected Home Whether it’s via Home Security offerings, or entertainment, or simply via all sorts of WiFi enabled devices.. my home is connected. So the Utility now has to offer something that adds value to all this.Automate the Grid  To improve stability and reliability in real time, to reduce losses, to save on ‘truck rolls’, to improve on asset utilization…. One needs to have info from all parts of the grid in real time to respond and use this ‘big data’ to make informed decisions. Thus everything has to be connected, networked and secured.Cyber SecurityIf all of the devices in the grid now connect together, then ‘others’ can also try to connect to it from their smartphone, so how to protect the grid? One needs to ‘design in’ security from the silicon all the way up the solution stack… and terms such as SEIM become commonplace.Workplace Transformation The industries employee demographic is changing. Folks with all the knowledge are retiring. Millennial’s are being hired and their usage and expectations of devices, technology and processes are very different… Now there are multiple mobile devices, wearables, drones, augmented reality.Industry Supply ChainThe established ‘supply chain’ of this industry is undergoing fundamental change, as the PC & Telco supply chain did in the past 10 years. Designing ‘every part’ of the solution from the silicon to the S/W is becoming no longer economically viable for most unless one has huge scale. It’s all heading to standard based building blocks. And this has huge implications in terms of grid architecture, maintenance policies & procurement policies in the coming few years.So is Moore’s Law the root cause of all these disruptions?  – Yes, in that it enabled all of the disruptions above to happen.Is Moore’s Law part of the ‘solution’ for the Industry? – Yes, in that the innovation Moore’s Law enables is what’s being brought to bear in order to develop new business models, new services, a new Utility Industry. It’s all about the capabilities that Moore’s law brings. How people deploy these capabilities will ultimately define how the Utility Industry will evolve.A key part of this will be related to how value is derived as more and more devices will be added to the grid. This is where Metcalfe’s Law comes in to play. And that’s a topic for a whole follow-on blog.Kev.Find Kevin on LinkedInOpens in a new windowStart a conversation with Kevin on TwitterOpens in a new windowlast_img

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