Time for Electric-Power Industry to Pick up the Pace?

Engineers are highly conservative by nature. We build safety margins on top of safety margins, and rightfully so because we should avoid catastrophic failures within our areas of responsibility at all costs. Industries, such as aeronautical and civil engineering, have thrived on being cautious.

However, for much of its existence, the electric-power industry has suffered from extreme conservatism by progressing through the “rulebook” as expected …  step one, then two, so forth, and so on. This has resulted in both slow adoption and systemwide application use of new technologies.

With its reliance on an aging infrastructure, utilities and other electric-power entities have not kept up the progressive pace of nimbler industries, such as the telecommunication industry, that have taken advantage of newer innovations. Cell-phone service providers threw out the rulebooks by constantly innovating with new cell-phone models every few months and faster communication standards (2G, 3G, 4G) every few years. They chose to disrupt themselves instead of waiting until someone disrupted them.

As a result, cell-phone adoption rates are astronomical. According to the United Nations, more people globally have access to the latest cell-phone models than to a basic need, such as the toilet. A recent study found that Africa has a median landline penetration of about 2% but a median 83% cell-phone ownership rate among adults. This shows that the telecommunication market in Africa skipped, at the very least, one step. Providers burned the conservative “rulebook” and continued playing without it.

In the electric-power industry, a prime example of conservatism is the continuous use of conventional reclosers (+70-year-old technology), with no significant improvements until the arrival of PulseClosing® Technology, which is now finally mainstream. Lateral fuse-protection philosophies (in place since the advent of fusing and reclosing technologies) have seen little to no change until recently.

Now, let’s consider a bit of business-model disruption. Distributed generation and microgrids are not a new concept, but all of the sudden they’re all the rage because of the potential impact with the shift from a centralized to a distributed-generation model. This is putting large segments of the industry at risk. Moreover, energy storage, as a concept, has been around for a long time, albeit with technological limitations. Storage enables seamless integration of variable renewable generation that, in many cases—where revenue-stacking and proper regulation is in place—is on par with large conventional generation sources.

Sure, challenges remain for storage technology, but only now when the traditional-model disruption is a fact can we say the chasm between early adopters and the early majority is being crossed, as proposed by Geoffrey Moore in his book “Crossing the Chasm.”

Being conservative, or not, when deciding to use new technologies and methods is a worthy consideration. More important is the “why” factor—why remain doing what you’ve been doing, just because you’ve been doing it, perhaps for a long time? If you don’t disrupt yourself, others will do so for you and, in the process, put you and your business in a position of weakness.

I’d be interested in learning your thought on this issue in the Comments section below.