3rd Smart Grid Lesson Learned: in the Enterprise side “Everything Dies a Quick Death.”

Jose Antonio Vanderhorst-Silverio | Sep 3, 2010

        

Michael Kanellos, one of the greentechmedia.com editors, responded a comment that became the EWPC post The Enterprise Side of the EWPC-AF as Integrated to the Biggest Green Market, with: “ah. I may have confused you. Quick death refers to the unusually short life of IT equipment. Servers and desktops get replaced at a somewhat rapid rate, which is great for vendors. They love the recurring revenue from refresh cycle. In solar, LED and smart grid, the refresh cycle takes place over decades. In fact, you can even argue there is no refresh cycle.” Next is my response which is a follow up to the EWPC post 2 Smart Grid Lessons Learned: Increasing Stimulus Grant was Mistaken. Utilities Must be restructured:

Thank you Michael,

You have given me a great opportunity.

 I was certainly not misled by “Everything Dies a Quick Death.” On the contrary, I architected the Enterprise side of the emerging power industry to follow the existing high tech marketing culture of the communication sector that includes IT. In the description of the EWPC-AF you will find that:

“An important part of the value creation of the EWPC-AF … comes from changing the managing by averages in retail markets to managing by “discovering new sources of profitability in a network economy… when the events are interconnected and interdependent (Hax and Wilde, the delta project)” through the development of Business Model Innovations by Second Generation Retailers (2GRs)… The second level architecture is reserved for proprietary architectures for open systems under the leadership of 2GRs. Most value creation will be the result of an architecture competition centered on the Silicon Valley Model, which will lead to the final architecture of the EWPC Smart Grid, which is just one of the disruptive components of the whole.”

The current smart grid development that starts with the Big-Bang Advanced Metering Infrastructure (AMIs), based on the utility oriented concept of Demand Side Management, is obviously a dead end when you read my above post. Part of the problems that BG&E had with the Maryland PSC were related to early obsolescence of AMI. The PSC must have based that conclusion on the large number of AMR meters that were to be replaced very early with the AMI system.

Under the EWPC-AF the obsolescence concern is replaced by “Everything Dies a Quick Death,” as many of the product-services that 2GRs will try to bring to market will die in Geoffrey Moore coined as The Chasm, “by far the most formidable and unforgiving transition in the in the Technology Adoption Life Cycle, and it is the more dangerous because it typically goes unrecognized.”

In that light, please take a look at the EWPC article Forget Demand Side Management (DSM); Think Demand Side Innovation (DSI), whose summary say: “To make the emergent power industry smarter, there is a need to restructure the power industry to enable Second Generation Retailers integrate the require demand side innovations to power system planning, operation and control.”

While looking at the EWPC article you will find a comment by Gale Horst, an inventor of smart devices, now working for EPRI, that starts with “Your concept of DSI as opposed to DSM seems to be quite on-track in my opinion.”

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