NBN: Needed for "Smart Grid" and other New Century Industries

With the release by IBM of "Australia's Digital Future to 2050" by Phil Ruthven of IBISworld there is now some very good modelling to say "The Internet Changes Everything", with some Industry bulwarks of the past set to disappear or radically shrink and others, "New Century Industries" (my words), that don't yet exist at scale, will come to the fore of our economy.

Previous pieces that link the NBN/Smart-Internet with "Negawatt" programs are now more relevant:

• Smart Internet+Smart-Grid: making money and reducing carbon footprint
• Smart-Grids and Carbon Trading: Enough for an economic Negawatt scheme?

Smart-Grids and Carbon Trading: Enough for an economic Negawatt scheme?

Can the Smart-Grid and Carbon Trading create a new, economically viable marketplace in saving power?

In 1997, Amory B. Lovins co-authored a book with a radical new idea to address the Energy Crisis and our Environmental problems (now it might be "Climate Change"):

the negawatt negative watts of power consumed by creating lower demand through more efficient power use.

It is still much cheaper to "save a watt" than for a Power Generator to "build a watt", and the marginal cost of production and distribution is zero to the Generator. The consumer still has to maintain and replace their infrastructure investment.

So why hasn't the negawatt market happened? What's different now that it could work?

Smart Internet+Smart-Grid: making money and reducing carbon footprint

Two technology/commercial trends are coming our way in Australia:

• the Internet everywhere (3G wireless or NBN), means "smart controllers" will be cheap, simple and everywhere. They will be able to trivially hook into 3-7 day local forecasts, especially useful for air-conditioning units.
• "Smart Power" metering will start to charge power at different prices during the day, rather than the disconnected traditional pricing of "a single price whenever you use it".
  You can see real-time wholesale electricity prices on-line and a Pretty graph in 30-min periods.
  Yesterday (12/12/11), the 30-min price varied from $52/MWhr @ 4PM to $16/MWhr @ 2AM. In 5-min periods, the price ranged from $95 to $16.

There's a bit of background you may or may not know about Power Generators: they over-build capacity to meet any and all demands placed on them. There aren't just no incentives for Power Generators or their customers to reduce either aggregate or instantaneous demand, but the reverse: significant economic disincentives to reducing demand, and hence to lowered income and profit. This is a perverse economic outcome costing us a lot of money and burning carbon unnecessarily.

From "An EnergySmart Plan. Positioning Queensland for a Diversified Energy Future 2010 - 2050" [original dead link] (Nov 2010 report for Queensland Government):

Ergon and ENERGEX will each spend $6 billion (that is $12B combined) in capital expenditure over the next five years to cope with extraordinary consumption during a fraction of the year, rather than the average consumption over the course of the year.

To put this into perspective, ENERGEX has over $900M in assets that are only used for approximately 3.5 days per year. (Mark Paterson, ENERGEX, The SPRA Standard).

That's not good business, but how can a solution be converted into useful products that make a profit?