Where Will the Smart Grid Come From?

In historical terms, today’s electric utilities remind me a lot of the phone network, circa 1971.

These are regional, and sometimes local, monopolies, some private and others quasi-public. While we think it’s all compatible because the same power comes out of any plug, inside it’s a welter of competing, incompatible systems.

It’s a mess.

History tells us what happened to the old phone networks. They were slowly made obsolete by a data networking standard that had not yet been born in 1971. Originally called the Transmission Control Protocol (TCP), for its transport layer, and Internet Protocol (IP), for its networking layer in 1974, today we all say TCP/IP like it means something.

(Vinton Cerf, right, is called the “father of the Internet” for having co-authored the 1974 paper describing all this. He now works for Google. Picture from iBiblio.)

Over the last four decades the phone networks have worked hard to try and control the Internet, at least the last mile, but the big story of our time is that they failed. (The cellular networks on which AT&T and Verizon now depend for their business did not exist in 1971.)

Consider. Microsoft just paid $8.5 billion for a company that bypasses the phone networks, using TCP/IP to make nearly every call a local one. Verizon has begun selling some of its local systems (which are going bankrupt anyway) and the former Qwest, now owned by CenturyLink, says its strategy is to go “into the cloud,” becoming in effect a glorified time-sharing system.

These lessons are being ignored by America’s electric grid, which like its phone company predecessors is using their political control to manipulate the renewable energy market, setting prices for excess energy below-market so they can continue building big new power plants.

The powers of the grid see no alternative to their monopoly. Neither did the phone companies in 1971.

The Internet isn’t a place, nor is it really infrastructure. No, not even a series of tubes. The Internet is a set of standards that focus first on getting the job of moving bits done, and only later on the economics of it all. The standards were developed to further a public policy goal – the Cold War – by military contractors.

Can history repeat itself ? Well, there is a public policy goal here, a war on terror the military is anxious to insulate its own networks from. The military is also increasing its use of renewable, off-grid energy.

It’s nascent, but it’s a beginning. Standards for moving and storing energy created off-grid doesn’t sound much like tomorrow’s smart grid, but history tells me we’ll more likely get to one that way than waiting on today’s utility companies to support anything that they can’t fully control.

Please, feel free to disagree. And cite sources.



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Dana Blankenhorn has covered business and technology since 1978. He covered the Houston oil boom of the 1970s, began making his living online in 1985, and launched the Interactive Age Daily, the first daily coverage of e-commerce, in 1994. He has written for a host of off-line and online publications including The Chicago Tribune, Advertising Age, and ZDNet. He has covered PCs, networks, telecommunications, cable technology, Internet commerce, the Internet of Things, Open Source and Health IT, He began covering alternative energy at his personal blog, Danablankenhorn.com, in 2007.

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