Within the last ten years the deprecation expense for electric utilities in the United States and other developed economies has exceeded the investment. The current grid thrived by economies of scale, exponential growth in consumption and environmental indifference; however, the asset value for the grid is falling due to the eroding of these foundations, disrupting monopoly franchise, vertical integration, centralized monitoring and control and one-way power flow.
Everything is changing. The grid faces more challenges and requirements than ever before- the occasional sudden disaster, increase in severe weather events, substation decline in bulk power grid reliability, general public support for sustainability, electric vehicles, millions of new devices at the edge of the grid and more. And the smart grid is the answer, using digital technology to improve the reliability, security and efficiency of the electric system.
If the smart grid is the answer to our energy needs then how is it implemented? Bob Metcalfe, inventor of Ethernet said, “Over the past 63 years we met world needs for cheap and clean information by building the Internet. Over the next 63 years, we will meet world needs for cheap and clean energy by building the Enernet.”
Collier agrees that the Internet is the obvious solution to meeting energy needs. With a track record of reliability, the Internet is a tool for the self-regulating process, a homeostasis of energy, economics and environmental. Connecting anything to anyone at anytime at any place with any service or network, IoT is capable of handling many endpoints; it can handle the smart grid. IoT is also being proactively built, considering future challenges and making appropriate adjustments.
The smart grid is going in a direction where it will need to move from handling thousands of endpoints to millions, possibly billions of endpoints. The Internet has already moved in this direction as Cisco suggests that by 2020 there will be 50 billion things connected to the Internet. Therefore, Collier makes the conclusion that IoT with its reliability and ability to handle a great magnitude of endpoints is the solution to our energy needs.
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