07 April 2009

Review: Perfect Power by Robert Galvin and Kurt Yeager

Robert Galvin knows a thing or two about technology revolutions. As founder and CEO of Motorola, Galvin helped transform the telecommunications industry. The cell phone was developed while he led Motorola and went up against a deeply entrenched and government regulated monopoly.

Galvin foresees a similar opportunity – and similar challenges – with the electricity revolution. Just as the decentralized cell phone was a threat to hard-wired phone companies, decentralized energy is a similar threat to centralized power.

In Perfect Power: How the Microgrid Revolution Will Unleash Cleaner, Greener, and More Abundant Energy, Galvin and co-author Kurt Yeager, from power-industry think-tank the Electric Power Research Institute, offer their view on the coming energy revolution.

The revolution will not be postponed, Galvin and Yeager conclude, because today's consumers and their devices demand it. But what's needed is for electricity to be viewed, as Edison originally envisioned it, "as the enabling vehicle for innovative consumer products and services, not as just another form of commodity energy."

Galvin and Yeager's answer is a new, revitalized smart microgrid system to replace the outmoded centralized system based on technologies developed prior to the 1950s. Galvin and Yeager call for investment in a transformative infrastructure and loosening of rules and regulations that inhibit decentralized, entrepreneurial responses to increasing energy needs.

One such bureaucratic barrier to distributed generation and decentralized microgrids, according to Galvin and Yeager, is that "only public utilities or governments [can] run wires that cross a public street or even to power remote villages."

While we've seen challenges to this status quo from energy entrepreneurs around the world, such as Fabio Rosa in Brazil, I wonder whether a certain amount of regulation is appropriate here in the US. I'm not sure I want my neighbor tapping into the electrical wires running down our street, potentially putting the whole system at risk. But a well-trained, certified group of service providers might be a different story.

Indeed, this is what the authors call for, envisioning "the emergence and growth of local service businesses, not unlike plumbing, heating, and electronic specialists, that install, maintain, and fine-tune the perfect power system to the highest quality standards, while dramatically cutting costs for all consumers."

Increasing energy demand in the US and around the world – almost one-third of the world's population is currently without electricity and that number is expected to double by mid-century – will force the hand, much like consumer demand for cell phones transformed the way we communicate.

Galvin and Yeager see an abundance of opportunity in the problem of upwardly spiraling demand and need, but not from government prescriptions and regulations, despite recent developments in the US.

"The key to change is free enterprise," the authors conclude. "This means no barriers to entry, the availability of clear and accurate price signals, an absence of subsidies, and the elimination of predatory practices."

In fact, the revolution has already begun. As the authors suggest, "Consumers, communities, and utilities alike are being confronted with a 'perfect storm' of converging cost, quality, and environmental issues that urgently require the smart, entrepreneurial transformation of our obsolete electricity infrastructure and its state-regulated monopoly, retail service business model."

The book struggles between being a manifesto for a new energy model and investment advice manual. The lists of companies and institutions at the end of each chapter seem tangential and superfluous. I would have cut the book by 100 pages or more, making it the perfect size for a cross country flight.

As it is, I'm not sure the audience for this book will wade through the authors' enthusiasm for their "perfect" model and promotional language associated with Galvin's Electricity Institute to find the kernels of good information about the coming energy revolution.