Jose Antonio Vanderhorst-Silverio | Jul 22, 2013
Great electric service will be the result of the development of business model innovations in the retail market, for example, on the internet infrastructure. This blog post repeats a comment posted under the article Energy: The smart-grid solution, by Massoud Amin, published online in Nature on 10 July 2013, in which Dr. Amin “…outlines how the United States should make its electricity infrastructure self-healing to avoid massive power failures.”
In the well-researched book “Good to Great: why some companies make the leap… and others don’t” by Jim Collins, HarperCollins 2001, there are three overlapping circles whose intersection defined as the Hedgehog Concept result the required simplicity that guarantees sustainability. Similar work like “Change by design: how design thinking transforms organizations and inspires innovation,” HarperCollins 2009, by Tim Brown leads to the same result with different wording: overlapping innovation criteria is at the intersection of 1) (technological) feasibility, 2) (economic) viability, and 3) (social) desirability. The smart-grid solution meets the first and second criterions but not the third as a result of two scoping flaws in its underlying architecting act done in 2002 and 2003. The flaws are in industry organizational change scope and in the customer scope.
It is the lack of the social “what you are deeply passionate about” on the Hedgehog Concept that makes the smart-grid industry organizational scope unsustainable, making a non-positive sum game that goes into a start-stop changes in direction mediocre (Good) “Doom Loop”, probably like the one being proposed for making “its electricity infrastructure self-healing to avoid massive power failures.” Examples of changes in direction in the United States of America started with EPAct 92 wholesale markets, open transmission access, the California Crisis, Capacity Markets, NERC mandatory requirements.
Back in 1978, the late MIT professor Fred C. Schweppe, wrote that there was actually not need to avoid massive power failures. He introduced the concept of a societal definition of a blackout to contrast it to the technical definition that is being used in the United States, China and other countries said to be following suit with smart-grid projects. Once that is understood, the public will respond by having supplemental energy sources.
To manage supplemental energy resources, customer scope needs to take into account, for example, the internet infrastructure in the development of electric retail (not wholesale) markets. To develop product and services that people love in that internet infrastructure, after returning to Apple, Steve Jobs said that "You've got to start with the customer experience and work back to the technology, not the other way around." From Jobs standpoint, that smart-grid solution is being been done the other way around.
At present, there are at least two “smart-market and smart-grid” alternatives to the smart-grid solution: the one announced in January 2012 by Germany’s Federal Network Agency Bundesnetzagentur and the unprecedented December 2009 Electricity Without Price Controls Architecture Framework, which defines a minimalist (only two systems-of-systems), top level system architecture that I posted on the EWPC Blog and which meets the three above mentioned criterion, making a positive sum game that goes into Great non-stop “Flywheel Effect” in one direction. To guarantee the positive sum game, a business model (architecture) competition that starts with the customer experience will be set up in the smart-market.