Jose Antonio Vanderhorst-Silverio | Apr 22, 2010
Under the IntelligentUtility Insight, The 'Next Big Thing', written by Phil Carson, I wrote the following comment:
“Fifteen years ago I used charred paper and card in the construction of an electric lamp on the incandescent principle. I used it too in the shape of a horse-shoe precisely as you say Mr. Edison is now using it.”
in a letter to Nature, January 1, 1880
“There you have it. No sooner does a fellow succeed in making a good thing than some other fellows pop and tell you they did it years ago.”
Hello Mr. Carson,
I like very much your contribution. However, as you will see next, I doubt whether the Next Big Thing can also be classified with more certainty as business model innovations. Your response to the title is expected.
The quotes by Swan and Edison may seem just the reverse of your article about the well respected firm KEMA and his expert Mr. Ron Willoughby. But, back in 1988, Stanley Klein made the observation that electric restructuring was "fundamentally an information technology event." I think that by itself may be sufficient to give Mr. Klein some credit.
In March of 2007, I repeated Mr. klein's quote at Carnegie Mellon University in the presentation A Generative Dialogue to Reach the End-State of the Electricity Industry, to argue in slide 3 that “I am glad to be here at CMU to suggest a generative dialogue to get the power industry in the 5th [technological] revolution.” I also argue on slide 21 that “[c]ompetitive utility retailers business model innovations are at the center of the market” and in slide 34 added that “Competitive retailers exploit economies of scope:
Segmenting customers according to demand side reliability differentiation among many other parameters.
Take control of strategic enterprise solutions to develop innovative business models that reap interdependencies.
About the same time, “Competing on Analytics: The New Science of Winning, released by Harvard Business School Press in March, is the first book to lay out a plan for businesses to use analytics to their competitive advantage. According to authors Thomas H. Davenport and Jeanne G. Harris, businesses have reached a critical juncture in the history of global competition as we enter what they call the ‘Age of Analytics.’”
Analytics is one of the ways to develop business model innovations. Yesterday, in the Knowledge Problem Blog, Michael Giberson wrote the postMore smart grid insight, under which I added the following comment:
Hello Mr. Giberson,
In response to Mr. Hunt’s article Threats to the Utility Business Model Future, I posted an additional smart grid insight:
Mr. Hunt has shown very important facts on the obsolescence of the utility business model, which I understand can be complemented to favor government restructuring in the power industry as soon as possible. Giving the benefit of the doubt to that business model, he writes that “[t]he traditional central station power generation utility business model is under assault on many fronts. It has endured for 100 years because of its reliability and low average costs.”
However, that apparently enduring front has also been already lost. I do not remember where I learn that the utility business model is nothing more than winning rate cases to the regulator. The main problem is that state regulators instructions need to change to enable business model innovations. The value destruction associated with extending business as usual regulations is not longer advisable for all stakeholders.
As Mr. Hunt will see in the post The ‘Genius’ of the Macrogrid ‘And’ Truly Fair Microgrids, it is not longer true that the business model can endure “because of its reliability and low average costs.” He will also see that microgrids are here to stay.
The conclusion of that post reiterates that: “[s]tate Legislatures need to give a new mandate to state regulators to enable truly politically correct (or better yet truly fair) microgrids. By trying to go the easy way out, microgrid proponents’ ongoing strategy won’t work; it will reveal state governments’ lack of vision that sets the poor to bid against the microgrids.”
The phrase “business model innovation” can now be found in 77 posts in the EWPC Blog, in which I think I have acted with sustained initiative. The five most viewed articles, with count number within parenthesis, and their summary are:
The Sixth Disruptive Technology (16,732): A set of 6 disruptive technologies can be identified “To do a better job of managing our dwindling energy resources…” AMI and the Smart Grid are the fourth and fifth disruptive technologies to allow a breakthrough paradigm of the power industry for the 21st Century, as the required technologies become available, and will be tightly integrated by business model innovations - the sixth disruptive technology - developed by 2GRs into a systemic superior solution. The first three disruptive technologies are demand response, distributed generation and storage, and energy efficiency.
Demand Integration is NOT the Province of Politics. (9,619): Demand integration and system reliability are not the provinces of politics, but of engineering systems and competition. FERC’s demand response staff assessment begs the question of a properly restructured electricity market. The highly complex paradigm inherent on its market structure will become even more complex if FERC’s correct instructions are implemented. A paradigm shift to the EWPC market structure and design is expected to avoid getting the developed countries’ power industry into that of third world service.
Let EWPC Come to Fruition (7,378 ): As ‘the heat of combat is over, and a decision’ about EWPC can now be reached, ‘all the bitterness disappears, and people work hard to bring’ EWPC ‘to fruition in the best possible way’ to paraphrase Uno Lamm.
EWPC’s Tipping Point (7,150): Aiming to be an irresistible article, it should help start a word-of-mouth epidemic of high proportions in the power industry. By respectfully exposing, and responding inquiries, the insidious power ofIMEUC False Facts to obstruct progress, it is one of those little things that can make a big difference. Now all stakeholders will be able to learn how Demand Integration to power system planning, operation and control, brings the clarity and direction of the breakthough EWPC market architecture and design paradigm shift to produce large coordination savings for society as a whole. I repeat that “California has a great opportunity to repair the damages of the BIG California LIE to the world.”
Leadership Answers What to do First (6,767): The answer to the question of what to do first is for the global power industry to get out of the wrong jungle to produce a EWPC based EPAct as soon as possible. That is the kind of leadership needed to face the inevitable fundamental changes required to significantly reduce today’s legislative and regulatory uncertainty.