Hi Brian, appreciate your observations. At least three issues prompted this article
a) price drop do not automatically lead to more demand; demand also depends on market segments and their distinctive behaviors, especially for technological products new to the market.
b) While comparisons with telecom industry structural changes are worthwhile, and much here for the electric utilities to learn from, nevertheless going off-grid may not be compared to cutting off the landline connection.
c) Even when solar panels with batteries make for (electric) grid independence, the monitoring of power generated from the panels is very much networking, and thus we maintain the "telecom grid."
I am a big believer in distributed generation. The utilities will get into that in a big way. No doom and gloom - cannot think of a more thrilling industry to watch and participate in.
Excellent article. I think the fundamental driver why business models have to change is because the electric utility is no longer a "natural monopoly." Scale is not essential for economical generation. With distributed generation, we have co-located generation and use, thus no expense of transmission. More broadly, the electric utility business is not a networking business at all (at least for residential consumers). Thus, new technology and topology will fray and fragment the utility at the edges. What is a electric utility to do? Go "out of market" for service provision, be as NRG, and embrace DG, with microgrids rather than any one generation type. The barriers are organizational culture and mindsets, not assets.
Congratulations on this remarkable project.
When I worked at Hughes Network Systems around 2003-4, we created a similar solution using satellite connectivity where you have the 19 km hop via Wi-Fi. We installed the solution for RV parks in 3 or 4 locations in California that did not have Internet connectivity except for dial-up connections. We used directional antennas to propagate Wi-Fi signals at each location - Direcway Wi-Fi Hot Spots. The satellite connectivity was via Ku band, which allowed for acceptable speed, but not enough; the project was in anticipation of Hughes' launch of Spaceway (Ka band), a new satellite systems with much higher speed connectivity.
Our business model was based on subscriptions and pay-per-day or hour use. It was slightly more expensive than typical home subscriptions but less than what hotels charged for daily connectivity.
Your use of solar is great. What this points to is:
a) Synergy (I wish to avoid the word convergence) between telecommunications and stand-alone, distributed electricity systems,
b) Emerging new networking topologies (alternatives to today's grid) that can make distributed solar systems extensions of the Ethernet - the Internet-of-things - from a network management perspective.
The longer term business implications are significant as I have written about in REW.
Does this mean about 600 MW+ would be auctioned this year? I assume all these would be grid-tied with PPAs, and the off-grid projects would be in addition to the 20 GW proposed by 2017? It would be great if Mr. Kapoor elaborated on this in a comment.
This appears to be foresightful public policy. Natalie and Bloomberg covers India solar news very well, thank you.
This is an impressive, valuable project, and a well-written article. Thank you. Michael's and Larry's comments are also on the mark. One grid does not fit all, all power should be local. Just as we segment customers routinely in marketing, why should we not segment customers for electricity? Microgrids of this kind will allow for that. With a technology like this, entry barriers in the electricity business drop - they already have with solar - the natural monopoly arguments weaken, and entrepreneurial start-ups will enter the business. Regulations have to respond to this reality. Could there be a more exciting time than now to be participating in this bigger than the Internet (perhaps) transformation?
A fine, timely article. In addition to grid-tied solar, I hope PV sprouts up on rural households and on urban building roofs much as TV antennas once did - distributed generation, micro-grids, community power. Given the scale of India's needs, I hope the overall economics of PV solar, panels and balance of systems, improves by a few orders of magnitude. While I am hopeful, I must say the solar PV market is still in the latent phase in India - the "chasm" has to be crossed (in Geoffrey Moore's words) to reach the mass market.
What the grid failure also underscores is that about 400 million Indians have no grid electricity at all. Reaching out to them in rural areas via the traditional grid simply would not be economical. The answer: Distributed Generation.
Yes, India should embrace solar wholeheartedly. But in addition to supplying solar energy to the existing grid as the auctions in December 2011 seek to do, there should be even greater emphasis on energy self-sufficiency-oriented, community-grids or micro-grids.
Of course, the solutions Flareum has developed - pumps, ATMs, cookers ... using solar are admirable too - best wishes.
Excellent overview. I hope in part 2, you would address what "low carbon" solution and "how" it would be deployed. I'm assuming it should be solar distributed generation, in part, and supplemented or backed-up by centralized (fossil-fuel based) generation and the grid. It seems inevitable the initiative for power generation would shift to end-users. The existing business model faces increasing challenge.
James, appreciate your point about the local, community nature of water services. Peter Bradshaw echoes your point too. Pdfllc, I am planning to write about why IOUs should get into DG exactly as you suggest. Please give me a few weeks to develop that argument. Rich, appreciate the example of sunk costs as a gating factor in determining the timing and evolution of industry phases. There appears to be a 'time constant,' as it were, governing technology generations. Thank you for the insight. Alexh, I too wish to compare developments in IT/telecom to electricity and examine what the parallels yield by way of guidance, something you have tried to do. For instance, are solar panels analogous to telephone instruments? Are community power projects the MCI of electricity competing as CLECs or IXCs (Competitive Local Exchange Carriers or Interexchange Carriers)? It surprises me that not more parallels are drawn between the history of telecom deregulation as guide to today's electric utilities and their prospects. Thank you all for excellent comments.
'If the renewable scheme is such a great idea, (why) doesn't some smart Harvard guy go out raise capital and put their scheme into action. Build their own grid and put the IOU's out of business. Make lots of money ... '
This comment # 13 by Sun2Energy may be intended as rhetorical, but in telecommunications, this is exactly what happened. This is the origin of the birth of MCI (a number of books describe this history). Distributed generation - solar on home rooftops - is analogous to non-AT&T phones attached to the regulated monopoly AT&T network (See Carterphone decision). The AT&T of old did object to this just as electric utilities now are.
I foresee a similar dynamic unfold in the electric utilities business: un-bundling, dis-integration, and re-constitution of network elements, and eventually of the industry. And yes, this will give rise to new, competitive utilities challenging today's utilities, similar to Competitive Local Exchange Carriers emerged in telecom.
Lee, you are right. I hope microprosessors track and keep account of all kinds of energy usage information, personal and household-level, with privacy, and display upon sign-in on smartphones or the web.
Patrick, I'm all for multi-pronged effort, PV is a start, and as illustration.
Thank you for your comments.