One measure of a technology's importance is the number of people it ultimately affects. Granted, the space program didn't land thousands of people on the moon, but it did introduce a generation to the wonders of powdered orange juice, not to mention putting Teflon-coated skillets in kitchens around the world. Based on this criteria, what's going on in the electric-utility industry may outweigh any number of pop technologies, even media darlings like the Internet and World Wide Web.
Three factors are driving the current interest in electrical-power distribution: market penetration, deregulation, and smart technology. How many homes or businesses have you been in recently that didn't have electricity? With a market penetration of virtually 100 percent, enabled by years of government-granted monopolies, even Bill Gates is envious.
And like the telecommunications industry of a decade or two ago, the electrical-power retail-distribution industry is undergoing fundamental changes, primarily deregulation at both the state and federal levels. Historically, regulatory compacts between utilities and government required that utilities sell electricity to customers within specified service areas, with prices and profits regulated by government. Now, regulators are pushing for a competitive market which would, among other things, eliminate traditional service areas, allowing customers to buy electricity from any provider. In some scenarios, utilities would be broken into independent companies--those which generate power and those that distribute it. San Diego Gas & Electric is already doing this, as it offloads low-margin generating facilities to focus on high-margin transmission and distribution. With the growing need to efficiently shift electricity from one power grid to another in a competitive marketplace, industry leaders have realized that, as much as anything else, success depends on building effective networks. (Just this fall, for instance, Continental Power Exchange cut a deal with the TVA to trade energy through its real-time computer network.)
Believing it knows something about networks, Novell has stepped into the fray in an ambitious effort with UtiliCorp, a Missouri-based utility company. Called the "Smart Energy Network Alliance," the Novell-UtiliCorp project will develop and market applications that let you optimize energy use on a 24-hour, real-time basis by turning ordinary electrical lines into computer networks. Ideally, to establish network communications, you'd simply plug an intelligent device into an electrical outlet.
At the heart of the proposal is Novell's Embedded Systems Technology (NEST) Powerline, which uses existing power lines for bidirectional data transfer at up to 2 Mbits/sec. Novell claims this data rate is about 20 times that of previous techniques, and powerful enough to handle more than a dozen PCs without installing special cables. At the other end of the line, utility companies could use NEST Powerline technology to automate and manage specific devices, allowing for demand-side power management. Of course, this requires NEST-enabled devices or adapters (which would have embedded chips costing about $1.00 each) that effectively turn individual devices into nodes on a LAN. Analysts estimate that if appliances were connected to intelligent power-management systems, the average household would save maybe $250 per year. But power management isn't the only application for smart electricity systems. Refrigerating systems, for instance, could signal problems with compressors or other components back to a repair shop. Meter reading for billing purposes could also be automated.
To turn the Smart Energy Network Alliance vision into a reality, Novell is seeding developers by cutting NEST-related licensing fees, and UtiliCorp will likely slash charges to customers in Missouri, West Virginia, Minnesota, Kansas, and Canada. Both companies plan on selling devices that send and receive information. At the same time, the alliance will try to convince appliance and office-equipment manufacturers to buy into the scheme, thereby providing blades for Smart Energy razors.
And Novell isn't alone in this arena. Microsoft is working with TCI--the nation's largest cable company--and Pacific Gas & Electric to develop applications for managing energy use in home appliances. Likewise, Echelon has installed processor-network nodes, which let electrical outlets and appliances communicate with each other, into hundreds of Texas homes.
The upshot of this process is that within the next few years we'll be able to choose electrical suppliers, just as we now choose telephone-service providers. Likewise, commercial customers will be able to negotiate a single low rate from utilities. Utilicorp, for instance, is already supplying electricity to over 400 Service Merchandise stores in 37 states, and Detroit Edison is trying to cut a similar deal for all General Motors facilities.
In short, new opportunities are emerging that don't necessarily target the desktop--but which potentially dwarf today's markets. From personal power generators to intelligent appliances, new markets are emerging that don't target--yet may dwarf--today's desktop. In short, you may be shocked by the opportunities that lie in the years ahead.
Jonathan Erickson
editor-in-chief
Copyright © 1995, Dr. Dobb's Journal