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Book Excerpt: Macrowikinomics (Part 4)

Don Tapscott and Anthony Williams explore what happens when wikinomics meets the green energy economy

...What if there was a way to integrate new sources of renewable power, including the power the homeowners, businesses and buildings generate themselves? What if you could also provide better tools and better information to allow consumers to manage their energy usage and even pump energy they generate back into the grid? This same system would allow utilities to monitor and control their networks more effectively and make new business models and dynamic pricing schedules possible for the first time. And, on top of all that, you could also sharply reduce greenhouse-gas emissions and help save the planet.

A mere fantasy? It's not as farfetched as it sounds. We just need an energy grid that is intelligent, decentralized and transparent, and where people and devices everywhere create capability and value. It's a grid for the age of networked intelligence. Call it the open source grid. After all, there is already increasingly broad agreement that our electrical systems should do more than carry electricity. They should carry information. And once the grid carries information, there are few reasons, if any, why it shouldn't benefit from all of the rich possibilities for innovation, collaboration and wealth creation that the Internet has fostered in other sectors of the economy.

In many ways, the argument for a smart grid based on open standards parallels the argument for an open Internet. The old power grid is analogous to broadcast media with its bias towards centralised, one-way, one-to-many, one-size-fits-all communication. A smart grid, if it could be built, would leverage the Internet's connective tissue to weave millions, and eventually billions, of household appliances, substations and power generators around the planet into an intelligent and programmable network. And, just as open standards and "edge intelligence" helped unleash unparalleled creativity on the Internet, a similar ethos of openness will ensure the new energy grid becomes a platform for a vast array of new energy services, not just a computerised pipeline for delivering cleaner electricity.

Treating the grid like an open platform would, for example, allow software developers to build applications to help you conserve energy the same way developers build apps for the iPhone. A straightforward application could include a service that analyses a household's electricity usage data, identifies inefficient appliances or practices in the home, and offers tips on how to reduce energy or provides special discounts on efficient appliances or electronic equipment. So you need no longer worry if your son or daughter forgets to turn the lights out when they go to bed, no matter how many times you remind them. A smart grid equipped with sensors in your home will follow your instructions to turn the lights off automatically when it's 2am and no one has moved in the house for the last hour!

An intelligent grid can also change consumer behavior with smart appliances that would save money automatically. Armed with more information about tariffs, for example, the dishwasher would wait for the price to fall below a certain level before switching on or the air-conditioner would turn itself down when the price goes up....

To date, 8.3 million homes in America have been equipped with smart meters covering 6% of the population. The number is set to grow to 33 million by 2011, while the worldwide total will reach about 155m. Cisco Systems estimates that by the time it all gets built out, the energy grid will be 1,000 times larger than today's Internet. Meanwhile, a vast and growing number of companies are already lining up to offer consumers tools to help them make sense of the smart meter data.

Typically leadership does not come from the companies that dominated the old industrial era of energy, but from a new generation of companies that understands the age of networked intelligence. Predictably Google is in the vanguard. Google's PowerMeter is one of these much anticipated tools. ...Users will be able to compare their usage by neighborhood, zip code or even with friends on Facebook. Like other tech players in the emerging energy economy, Google is actively lobbying for open standards so that consumers are able to buy smart appliances, thermostats, or energy monitors from different companies and have them talk to each other.

Pilots underway in Europe show how far the open source grid concept could go. Homes across Europe, including Manchester, Birmingham, Bristol, Rousse, and Cluj, have been equipped with advanced smart meters and sensor networks that tracks energy usage, efficiency and overall household emissions to generate a real time carbon footprint. Users pull up a web-based interface to analyze the sources of their emissions, compare their home with the neighborhood, forecast household savings, or control their energy use remotely from a PC or a mobile phone. Like Google's PowerMeter, the system developed by Manchester City Council and its partners is an open platform, which means it can be seamlessly integrated with other applications for mobiles, TV, and social networks.

Excerpted from Macrowikinomics: Rebooting Business and the World by Don Tapscott and Anthony D. Williams by arrangement with Portfolio, a member of Penguin Group (USA), Inc., Copyright © Don Tapscott and Anthony D. Williams, 2010.

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