Navigant Research Blog

Are We Approaching the Energy Singularity? Counter Point

— June 27, 2016

Cloud ComputingThe energy singularity sounds awesome, but bring your doubts. Who doesn’t appreciate the thought and effort it takes to make scientific breakthroughs? Exploring possibilities, creating new scenarios, and imagining the unimaginable. Ray Kurzweil’s singularity idea is one such notion, proposing “an era in which our intelligence will become increasingly non-biological and trillions of times more powerful than it is today—the dawning of a new civilization that will enable us to transcend our biological limitations and amplify our creativity.” Artificial intelligence (AI) taking over at an explosive rate—it sounds amazing. My colleague Mackinnon Lawrence suggests this breakthrough is possible for the energy sector within the next couple decades. Maybe.

A Different Grid of Tomorrow

To be sure, the future grid will differ from today’s grid. It might not even be a grid as we know it in 2045, the estimated year of Kurzweil’s singularity vision. Furthermore, changes are already taking place quickly, with the decline of coal-powered plants, the rise of solar power, and the promise of affordable storage technologies, to name a few. Navigant’s Energy Cloud vision already foresees an energy world full of profound changes and decentralized structures, a system more dynamic and responsive than today’s.

It is tantalizing to imagine the future power grid (or ecosystem) with blazing efficiency, unparalleled reliability, and widespread availability. My colleague cites the rapid advancements around self-driving cars and Google processing billions of search queries a day to enable deeper understanding of human thought as examples of the pace of change from machine learning. Machines are getting smarter, but there are also setbacks, particularly where grid assets, old and new, have failed, including:

  • The Fukushima Daiichi nuclear disaster in 2011
  • The San Bruno pipeline explosion in 2010
  • The Ivanpah solar power facility fire in May of this year

Even Google’s vaunted driverless car has collided with a bus. These negative events do not mean the problems can’t be overcome with powerful machines. Perhaps future super-intelligent systems will prevent or reduce the chances of such calamities. But these events do illustrate the downside of technology and the limits of machines.

In the energy sector, there is also the human constraint of regulation and business models. Even if technology breakthroughs take place, will regulators and politicians hold to the past and not allow transformations to emerge? Some are open to change. In California and New York, regulators and politicians have shown a willingness to embrace new ways of thinking about energy and new models. But others are likely to be more stubborn. Nevada regulators approved a price hike for solar customers, and SolarCity and Sunrun promptly pulled their operations from the state. In Montana and Wyoming, coal is still a powerful force for economic and political reasons.

Skepticism Abound

Among leading technology thinkers, respected names have trouble accepting Kurzweil’s future vision. Gordon Moore, cofounder of Intel and namesake of Moore’s Law, says the singularity is not likely to happen, at least not for a long time. Jeff Hawkins, cofounder of Numenta, a company developing a computer memory system based on the human neocortex and founder of Palm and Handspring, expects we will build machines that are more intelligent than humans, but there will be no singularity or runaway growth in intelligence. And Microsoft cofounder Paul Allen, who has devoted resources to his Allen Institute of Brain Science, has expressed serious doubts about the singularity occurring.

Count me among these skeptics. Predictions about breakthroughs often don’t pan out, or take way longer than expected. We were supposed to be commuting in flying cars, living in underwater cities, and colonizing other planets by now. We can imagine such things, but the future is difficult to see clearly. Some of what is imagined for the grid and energy is quite possible—I’m all for the wonderful magic, positive advancements, and geeky possibilities. Kurzweil is someone I respect. But the future also holds potential darkness, shadows, and unintended consequences. Man has a propensity to screw things up (wars), and his machines break down (think Space Shuttle Challenger or Chernobyl). Perhaps I’m stuck in a 2016 mindset, but my bet is the singularity moment is a long way off, if even possible. Moreover, the Kurzweil idea is too Panglossian. Machines will definitely grow smarter and the energy sector will benefit. But the process will be bumpy, unpredictable, and we will see a singular failure, or two, or three.

 

Are We Approaching the Energy Singularity? Point

— June 27, 2016

CodeElon Musk, doing his best Elon Musk, offered the provocative statement recently at the Code Conference that our existence is actually just a simulation being run by a highly advanced civilization. While a fringe theory, behind the statement is actually a rich vein of academic and philosophical thinking suggesting that we are approaching a point in human history at which the innovation that will occur in the next 5 minutes will outpace everything invented in the last 5 million years. Futurists like Ray Kurzweil describe this point in human history as the singularity.

The energy industry is no exception to this phenomenon. With the pace and scale of innovation accelerating across the energy landscape, grid 2.0 will be unrecognizable from the one we know today. More importantly, the inevitability of significant industry transformation is becoming increasingly difficult to ignore (see my colleague Jan Vrins’ Industry Megatrends blog series), begging the question whether we are approaching an energy singularity. This post suggests we are very likely catapulting toward such an event. In a companion post, my colleague Neil Strother argues a more skeptical approach.

The Energy Cloud and the Energy Singularity

As the end result of rapid innovation, much of which lies beyond our immediate purview, the Energy Cloud describes the confluence of many concurrent disruptions wreaking havoc on conventional ways of doing business. The full realization of the Energy Cloud’s potential as a highly networked grid ecosystem would only be accelerated by such an event.

The future grid will be cleaner, more distributed, and increasingly intelligent. These trends are expected to penetrate all corners of the industry: customers, regulation and policy, technology, business models, and grid operations. These advances will come in fits and starts and evolve differently in accordance with on-the-ground realities across various markets. That being said, the propensity for innovation and change is undeniable; the prolific (and sudden) rise of distributed energy resources (DER) server as a reminder of the destabilizing impact of innovation.

We cannot predict or anticipate all the disruptions that will be triggered by emerging technologies within the Energy Cloud and beyond. However, if you start with a potential endpoint—an autonomous, self-healing, and artificially intelligent grid emerging within the next several decades—we can begin to understand the far-reaching implications of the energy singularity.

The Neural Grid

While today’s grid is a highly transformative machine that has done a fine job powering innovation across the global economy, the crank of history has come full circle as a perfect storm of significant technological leaps that are beginning to take root and transform the industry in dramatic ways.

There is an inevitability to innovation that cannot be ignored. Consider that it was just 2013 when the Edison Electric Institute predicted in its oft-cited Disruptive Challenges paper that DER adoption, fueled by economic trends and policy, would likely cause a disruption of the utility industry, even suggesting the traditional utility could go the way of Kodak, the U.S. Postal Service, or telephone companies if they failed to adapt. Just last year, Energy Secretary Ernest Moniz noted that we are in the [energy] revolution today.

Fast forward to 2016, and the World Economic Forum is predicting that we are in the throes of the Fourth Industrial Revolution, in which the pace, scale, and impact of innovation will rapidly outpace anything we’ve seen in the past. The Fourth Industrial Revolution suggests that human intervention across the grid as we know it today will be mostly a relic of the past. It’s not far-fetched, for example, to consider Siri, Alexa, and Viv as the primary customer contact points for utilities behind the meter. Taking this a step further, a “conscious” grid could obviate the need for regulators or system operators altogether.

With artificial intelligence attracting $17 billion in investments since 2009 (and $2 billion in 2015 alone), machine learning innovation is on the march. Increasingly, this development is going open-source, which is the equivalent of putting innovation on steroids.

  • DARPA sponsored a driverless car challenge in 2004 that resulted in the winning car traveling 7.2 miles. In 2007, the winning entry went 60 miles driving under city conditions. Fast forward to 2015, where you have individuals building self-driving cars in their own garage.
  • Google’s self-driving car logged 1.5 million driving miles in 6 years; Tesla’s autopilot feature has logged 47 million miles in 6 months.
  • Google search processes 12.1 billion queries per day; each provides multiple data points to help understand what makes us human.

If you take these trends to their logical conclusion, grid learning could propel us toward an energy singularity event within the next several decades. Such an event would mark the dawn of the neural grid, with the potential to be far more transformative to human civilization than the dawn of the light bulb.

 

Demand Response Prepares for the 2016 Summer Season

— June 24, 2016

??????????????????June has been a much less newsworthy month than May was for the demand-side management industry. But it does represent the traditional start of the summer demand response (DR) season, so we’ll see what Mother Nature has in store for the weather. Will it be a busy DR season or a light one, as the last few years have been?

Drivers of DR Growth

Meanwhile, macro-level factors continue to act as both drivers and barriers for the global growth of DR. California, for example, continues to offer new opportunities for DR participation. The most recent case is the California Public Utilities Commission approving a decision that allows Southern California Edison to spend an additional $8.7 million on DR programs this summer to mitigate potential natural gas shortages stemming from the Aliso Canyon natural gas leak.

Outside of the United States, there are a number of examples of markets becoming more open and attractive for DR resources. From Canada to Europe to Asia, market structures are being reformed to allow DR to compete against generators for revenue. In Ontario, the Independent Electricity System Operator plans to launch a capacity market where DR will be able to compete with generation and other resources. Two of Europe’s largest electricity markets—France and the United Kingdom—plan to open capacity markets by 2017 that would allow DR participation. South Korea now allows DR to compete equally with generators in the electricity market.

And Barriers …

However, specific barriers to DR development still exist due to environmental and reliability concerns. The amount of DR capacity available for this summer was reduced due to the expiration of the U.S. Environmental Protection Agency’s (EPA’s) rules for emergency generators (EGs) for DR purposes. Last year, the U.S. Court of Appeals overturned an EPA rule that allowed 100 hours of EG use for emergency DR programs. It granted the EPA a 1-year stay, which expired on May 1, 2016. The EPA has no plans to make changes to the rule, meaning that the court’s ruling will remain intact, affecting upward of 20% of DR resources in some markets.

The recent PJM capacity auction cleared less DR capacity than the previous year, mostly due to lower prices. But in the longer term, PJM is phasing out its summer DR categories in favor of annual participation requirements. Industrial customers may have fairly flat load profiles throughout the year, but many commercial customers rely on air conditioning (AC) measures to respond to DR events. On a portfolio level, it will come down to a risk/reward calculation. Residential DR that gets bid into the PJM market by utilities running their own DR programs are almost exclusively focused on summer-focused loads like AC and pool pumps. These programs offer virtually no winter DR capability and would not be eligible under the new rules unless they could combine a bid with a winter-type of resource.

All of these dynamics and more are covered in the Navigant Research report, Market Data: Demand Response. I look forward to seeing anyone who will be attending the National Town Meeting on DR in Washington, D.C. in July.

 

Ralph Nader Enters Automotive Hall of Fame: A Legacy

— June 24, 2016

Electric Vehicle 2For more than 5 decades, many in Detroit and other automotive capitals have considered Ralph Nader to be public enemy number one. Despite the strong feelings against Nader throughout much of the auto industry, the lifelong consumer advocate will be inducted into the Automotive Hall of Fame in July 2016. While Nader first came to prominence with the publication of his book Unsafe at Any Speed, the industry would probably not be where it is today without his efforts.

When Nader’s book was published in 1965, there were almost no safety-related automotive regulations. A year later, the U.S. Congress enacted the first Motor Vehicle Safety Act, and the era of automotive regulation began. Within the next few years, emissions and fuel economy were also being regulated and the automobile would never be the same.

Rules Are Good

Over the past 50 years, the industry has fought virtually every new regulation tooth and nail, and in the process, it has seriously eroded consumer trust. While repeatedly claiming that new rules were technically impossible to meet and/or too costly but ultimately managing to meet the rules (for the most part), automakers and suppliers have chipped away at their own credibility.

Thanks to those rules, engineers were forced to convert vehicle systems from mechanical to electronic controls. Beginning with basics such as ignition and later anti-lock brakes, today’s vehicles have up to 100 computers and more than 100 million lines of code. There are already production vehicles on the road from Mercedes-Benz, Volvo, and Tesla with semi-autonomous capabilities. Fully autonomous vehicles aren’t far off.

Despite the animus between them, the efforts of Nader and colleagues like Joan Claybrook and Clarence Ditlow on issues such as airbags have spurred the industry to develop and adopt more capable and affordable sensing and processing systems. Those same systems have become the enablers for the transformation of urban mobility that is projected in Navigant Research’s Transportation Outlook: 2025-2050 white paper.

While there have undoubtedly been backward steps along the way—such as the ongoing Volkswagen diesel emissions scandal—overall, today’s vehicles are safer, more efficient, cleaner, and better performing than at any time in the 130-year history of the automobile. The industry also remains incredibly profitable, with more vehicles being sold than ever. The reality is that regulations have enhanced the transportation industry and personal mobility, rather than killing it.

An Inflection Point

The industry now stands at an inflection point, as mobility is about to be transformed. This is uncharted territory, and there are no rules that govern it. There are countless new players stepping up and hoping to grab a piece of the mobility pie. The potential to make a quantum leap in safety is there if autonomous vehicles are executed properly.

However, many of these new players are coming into vehicle control from a software-based technology space, where “fail fast and iterate” is the model. That’s fine when talking about apps. If they crash, it’s an annoyance. If an autonomous control system fails, lives may be at stake. If autonomous vehicles are executed poorly, it could drastically undermine a half-century of work by Nader and many others.

The time is right for the industry to step up to the plate and work with regulators to develop common-sense rules for autonomous vehicles that don’t stifle innovative ideas. At the same time, they must set standards for system performance and mechanisms to validate that performance.

Ralph Nader upset the apple cart 50 years ago; he deserves a place in the hall of fame. The auto industry needs to embrace that legacy for the future.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Digital Utility Strategies, Electric Vehicles, Energy Technologies, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Transportation Efficiencies, Utility Transformations

By Author


{"userID":"","pageName":"2016 June","path":"\/2016\/06?page=2","date":"12\/11\/2017"}