Metcalfe's Power Law  

Forbes has an interview with internet pioneer Bob Metcalfe on his venture into the smart grid software world - his comments about the smart grid leading to greater power consumption (but of cheaper, cleaner energy) are interesting - Metcalfe's Power Law.

Forbes: Bob, you have been involved with incredibly disruptive technologies over the years, starting with networking and jumping ahead to Ember, the smart grid and embedded intelligent sensors. What are the parallels between the creation of the smart grid, and what happened in the early days of the Internet?

Robert Metcalfe: The Internet began as a project to connect many computers across the United States. But it didn't really get going until personal computers and local area networks were invented. In those cases, most of the traffic never left the building.

Well, there's a direct parallel with the smart-grid evolution.

Most people look at these big towers in the woods carrying high-voltage electricity, and they think that's "the grid," and somehow we've got to make it smart. But the parallel is that that's the WAN, the wide area network. We need to do the local area network. Meaning, we need to bring the smart grid into the building. And then we need to connect all of the things in the building, whose energy needs to be managed [to the wide area grid].

That's where Ember comes in. Ember is an embedded networking company. We're building the kinds of microcontrollers that you find in thermostats, and HVAC, or heating ventilation air conditioning systems, lighting systems [and putting them in networks]. So there's a parallel with the development of the LAN.

Really, in my view, it was the LAN that got the Internet going because it generated a lot of traffic that could then leak out [to the wider Internet]. ...

What's the best example of the old stuff that we should get rid of?

We have lots of [power] transmission facilities that are fragile. And expensive. They're sort of like what existed in the telecom network prior to the Internet. We need more transmission facilities. But what you don't want to do is go out and build a bunch more of what we already have. That would be even be more fragile and even rickety. You know, the blackout phenomenon.

So the stimulus money could have the effect of delaying the modern grid, of having us invest too much money in the old grid. Then we would have to wait to amortize it over 20 or 30 years. So that could be a negative. Not that I've seen that happen. But that could happen. The stimulus money hasn't been spent yet, you know. Everyone's very excited about this money showing up. But it hasn't shown up yet.

In a world of smart meters, will the control of my house reside with me? Or will it reside with the utility company? For instance, will I be the one who says, "I'd like my house to be warmer or colder now." Or will the utility company use the data about usage to say, "You know what? There's too much of a power draw right now. We're not going to give you as much power." Is there a debate about who controls it?

There is a debate. But I believe it is much ado about nothing. It's fear-mongering. In our house, we have your random old thermostats. They're complicated. And they can control the temperature. But my wife subverts them. There's a button that says "hold." And "hold" means ignore a lot the programming and just keep the temperature right where it is. She runs around the house hitting "hold."

That's not a good thing. You're supposed to be in the smart-metering business.

I'm just making the point that the way things work, in practice, means that if the consumer really wants his house to be at 32 degrees F in August. I cannot see anyone designing a system that will let the utility override that choice. I just can't imagine that happening. So, I think it's much ado about nothing.

Does the smart grid mean that we have to be smarter consumers, then?

The smart grid will make what's going on in your house obvious to you. A lot of what goes on in your house is broken. Fans break, and you don't know it for years because you don't check your fans generally. So the smart grid will make you aware. Then, being aware, then you will want it to work better. And to save you money.
So the smart grid will make me a better consumer?

Yeah. And then you can choose to be stupid if you want, I suppose. I cannot imagine that there will be fear about the utilities taking over my house and controlling the temperature against my will.

OK. We'll let that one go. Make one prediction for me. How will the world of the energy grid be different two years from now than it is today?

Two years is kind of a dangerous prediction. I'd like to go longer than that.

OK. You can have a couple more years.

The big surprise for people will be that as we make progress on the smart grid, we're not going to use less energy than we do today. We're going to use much, much more.

We're going to use more energy?

Yeah.

Does that defeat the whole purpose?

Well, only if it's expensive and dirty energy--that would defeat the whole purpose. But if it's cheap and clean, then, which is where I think we're going, then we're going to use more of it, not less of it.

What will we be doing with more of it?

Well, I go back to the Internet for my lessons. In the early days of the Internet, we were worried about cramming the so-called information explosion into the limited facilities of what was then the AT&T company. So we were all about conserving, and compressing, and being efficient about our information. Now 20 or 30 or 40 years has gone by. Do we use less bandwidth now than we did before we build the Internet? No. We made bandwidth cheap and clean. And we now use a million times more.

So if the goal is to make energy cheap and clean, and energy is a factor of production (because it plays a role in everything we do in our whole economy) then as it gets cheaper and cleaner, we are going use more of it.

The implication for the smart grid [is it] has to have more capacity--not less capacity--than we have now. No one should say, "Well, good. We can tear down a bunch of towers now because we're going to use less energy." That would be a mistake. We're going to use more energy. Cheap and clean energy.

We hope.

Well, we won't do it unless it's cheap and clean. Both cheap and clean. Not just cheap.

Cheap and clean. And unsubsidized?

One would hope it was unsubsidized. Is someone proposing to subsidize it?

That's been the problem with clean energy so far, hasn't it?

Oh, all these subsidies. That's because the technologies don't work yet. Well, no. But that's our challenge: to get these [clean] technologies to work. To get solar to actually be cheaper than coal. So there's 100 companies right now starting up whose purpose is to make solar energy cheaper than coal. And this will be achieved in five years--if it hasn't been achieved already.

There's a bit of a debate about what do people mean when they say "cheaper than coal." Do you mean cheaper than coal-generated power back at the plant? Or cheaper than coal-generated power when it arrives at your house?

Some people argue that solar energy has already reached what's called "grid parity" [namely, the price of solar energy matches the cost of energy provided by the grid]. If we haven't reached it yet, we're going reach it really soon. And all these new technologies will make unsubsidized solar cheaper than coal.

Then we won't have to make this trade-off. We won't have to insist that people wear sweaters in houses. We'll just use cheap and clean energy to keep people healthy and happy.