Lessons from the Grid

The electrical power grid is a study in organizational behavior. Take how electricity is generated and distributed to the point of consumption. Huge power plants or arrays – fueled by “green energy” sources such as solar, wind, biomass, geothermal, and hydroelectric, or “brown energy” sources such as fossil fuels and nuclear – concentrate electrical power generation to take advantage of “economies of scale.” The resulting current is transmitted through an extensive redundancy of power lines, cables, substations, circuit breakers, switches and transformers – oftentimes referred to as the “power grid” – to individual consumers across wide areas.

Organizationally, this is a centralized model. Power is concentrated in a select number of locations and authority is distributed to other points as needed and according to priorities driven by limited supply during periods of peak demand. The overall system, no matter how inefficient or costly, strives to be convenient, available when needed, standardized in delivery, and transparent during use. The goal is to please the most and dissatisfy the least so that fundamental assumptions about the design of the system are unquestioned, significant investments in infrastructure modernization or extensive system redesign are delayed, and increases in operational costs, along with services, are passed fluidly to the consumer. In other words, the existing power structure prevails and remains unchallenged and the consumer is dependent on that structure to get what is needed and wanted.

For every movement, there is a counter-movement. There are those who regard being “on the grid” as a lifestyle that epitomizes wanton consumerism, promoting waste, excess, banality, and destruction of the environment. Their alternative is to live “off-the-grid” disconnected from public services including electrical power. Initiated during the 1960’s and ’70’s, the “back to the land” movement is often synonymous with off-the-grid solutions such as energy from solar, wind, and biomass sources.

The off-the-grid approach represents an alternative organization structure – a decentralized model. In this instance, power is held by a wide range of relatively small, independent individuals / families who are in total control of an electrical power system that meets their consumption requirements. As with many decentralized structures, one’s destiny is in one’s hands. However, the limits of these structures become apparent when consumption patterns change and more power is required or disaster strikes and there is no opportunity for a quick recovery.

As the title of this blog article, “Solar Power FAQs: Will The Electricity Meter Run Backwards?” posted on the Alba Energy website suggests, some homes with photovoltaic (PV) panels generate sufficient electricity during the day to meet and exceed the immediate consumption needs of the home. In a different twist to back to the land homes sporting off-the-grid solar-powered systems, the scenarios presented in this article illustrate how consumers can load surplus electrical power generated by solar panels onto the grid and receive financial credit for doing so through various net metering plans.

While a national mandate for electric power companies to offer fair net metering practices is not in place – albeit Jay Draiman of Northridge, CA, author of “Mandatory Renewable Energy – The Energy Evolution – R12,” touts this as a necessary step in overcoming our dependence on fossil fuels – momentum is gaining in several states as commitment to renewable energy is strengthened. One of these is New York where the New York Energy Research and Development Authority (NYSERDA) promotes net metering / remote net metering and interconnections 1 through a range of incentive programs directed toward offsetting the installation costs for small-scale solar systems and encouraging connection to the public power grid in order to facilitate net metering.

From an organizational standpoint, this represents a very different structure – the integrated model. Although neither centralized nor decentralized, integrated structures blend a centralized surplus distribution and backup system with a decentralized network of small-scale operations. Such interdependence distributes responsibility and authority to individual members in the social system so they can engage in self-sustaining behavior patterns while linked to a broader network of resources and markets. Individuals are in control of investments, operating expenses, and utilization of resources. They can take care of themselves first, sell the surplus, or if circumstances warrant, buy what they need or want when they are unable to provide enough by themselves.

The combination of electrical power grid, PV panels, and net metering represents one way developments in technology influence organization structure and design. As systems technologies become more powerful, pervasive, and transparent, sub-systems will become more embedded, integrated, and interdependent. The same concept applies to computers, the Internet, and payment for posting articles on a website or blog. As information and communication technologies continue to evolve, they will empower individuals to THINK independently, work openly and in parallel, and collaborate when opportunities arise for bargains and balances to be struck among the various comparative advantages, surpluses, and deficits in the larger system.

Thereby comes one of the unintended but inevitable consequences of pursuing “green energy” sources for power generation in lieu of “brown energy” sources: the fundamental organization structure and assumptions for organization design shift. Control is no longer held by a central body, be it a corporation, government, or special interest group; nor is it fractured and splintered to such a degree that collective effort is no longer possible. Instead, it is held in balance at the point where production, distribution, and consumption work in unison with one another for the advantage of the system rather than favoring the interests of a few at the expense of the many. Conventional wisdom may differ, but the world will be a better place for it!

Originally posted to New Media Explorer by Steve Bosserman on Wednesday, February 7, 2007

  1. The original New York Energy $martSM Program is no longer available

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