Back in the 1990’s the LEGO company underwent a transition. For them, it was a realization of what business they were truly in. Were they in the business of selling studded blocks or was it something else? It is reported that change came to their business upon a realization that they were really competing for a share of a child’s play time. That meant competing with video screens in all of their various forms as well as other toys that were grabbing a child’s attention. Kodak, by comparison, invented the digital camera, but failed to realize or embrace the concept that they were really in the business not of selling film, but of preserving memories. The outcomes for these companies are well known.
Today in the utility business we are experiencing a shift that is just as profound as the shift was in digital photography, or for the play experience that was embraced by Lego. Technology has driven down distributed generation costs and some renewable generation assets are now affordable to even the individual consumer. Solar business models allow individuals to embrace solar power with no money down while seeing the direct effect of their energy usage. Smart devices such as learning thermostats have brought automation to energy conservation and items such as smart light bulbs and IoT connected electrical sockets that enable metering at the point of use are all causing a significant shift in how we think about our energy use.
So what do all of these technologies have in common? What is the real underlying shift that is occurring? Of course there is the economic driver of wanting to secure energy needs at the lowest possible cost, but consider that there is also an underlying driver to be in control of your own destiny. There is certainly a move toward consumer empowerment and control and pushing consumer specific usage information to the edge of the grid. Just take a look at technologies such as the Sense home energy monitor that learns your home energy use patterns and pushes that information into the palm of your hand. The amount of information that can be provided directly to the end user consumer is more sophisticated today than most of our advanced automated metering infrastructure. The better quality and real time information that is in the end user’s hands is shifting more direct control by individual consumers over their energy usage. Think instant gratification and control.
If we are going to formulate our strategies on how to deal with all of the technological challenges presented by distributed generation, battery storage, electric vehicles, and consumer empowerment perhaps we need to re-evaluate the business that we are really in. From a power distribution standpoint there is still the need to provide the reliability backbone to the consumer as most renewable sources are not yet at a 365/24/7 availability model. This is our core business. Should our business model be shifting to embrace information at the edge of the grid while automating the protection and reliability aspects to keep them invisible? Do we have a role to play in helping end users monitor their sources of waste and use energy more efficiently? Will we become Kodak or Lego? What are your thoughts?