Thursday, 23 February 2012

First installations, but no second sight

Listening to the talks at today’s ‘new energy economy’ conference, I began to fret. There were talks from both technology suppliers and energy businesses, many of them justifiably proud of their achievements in early smart energy implementations. Only a cynic would have been amused by the speaker who boasted of his company’s ‘electricity solution’ and (better still) its ‘water solution’.

It’s obvious that what we’re seeing at the moment are pioneer implementations, in a market that has a lot of evolution to do. At present, nobody seems to have even the vaguest idea of what market and regulatory structures we’ll have in say twenty years’ time. Nobody knows what control functions, data flows or communication paths the smart communities of 2032 will need: experience from other sectors suggests that it will involve features and facilities that we can’t possibly guess at now.
And yet most of today’s speakers were talking confidently about installing kit that would need a service life of twenty or even forty years, to make economic sense. My guess is that it’s kit that, in twenty or forty years’ time, won’t do what we then need it to. The long service life of today’s legacy meters was only achieved only by virtue of their great simplicity: a simplicity that I don’t see in the energy systems of the future.
So there’s a great risk that early implementors will either be stuck, down the line, with obsolete kit, or else they’ll have to replace it before it’s paid back its capital cost.
I heard a counterargument today, that so long as the early implementors deploy really good reconfigurable platform-based technology, then the unknown needs of the future will still be achievable. But I’m not at all impressed: experience suggests that the first attempts at building reconfigurable platforms, for any technology, are failures; and that it’s only the very late-developed platforms that truly offer flexibility. Compare, for example, MS DOS and Android. We’re too early in the game to have any hope of building-in the right kind of flexibility.
I drew a glib little sketch of how the early-implementation risk might play out.



It seems to me that the risk of getting things wrong will decrease in steps, as the big uncertainties are successively resolved; and that the biggest steps will be the earliest ones, as the most fundamental decisions are made. On the other hand, the value of Smart Energy technology will rise gradually, as the cost of non-renewable generation increases; increasingly rapidly, but quite smoothly.
So what makes me fret is this: that if Smart Energy adopters will only delay a little while, the benefits to them of reduced risk will greatly outweigh the lost value from delaying. Yet in the UK’s quite free and competitive market, with a government that’s keen to get things going, early implementation to seize territory is encouraged. In say five parliaments’ time, it could all be seen to be a terrible waste. Perhaps a more measured approach, with more steadying from government, would be better in the long term.

2 comments:

Anonymous said...

Are you going to add posts from the blog archive?

Clive Tomlinson said...

Watch this space!

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