We are on the cusp of a revolution, according to serial entrepreneur and former IBM executive Bill Nussey, and it’s related to a largely-invisible force that is what he calls “the foundation of modern society.”
Nussey is speaking of electricity, and of the rapidly-aging electric grid, which he believes is as outdated as the mainframe computers that kicked off the computer era last century. The career software CEO, who most recently sold his company Silverpop to IBM in 2014 and then served as Vice President of Corporate Strategy until last year, is so convinced that the entire electric industry needs an upgrade that he left that role to spend what has now been over a year researching the current industry and alternative models.
Nussey described how running the current electric grid costs around $2 trillion per year, making it the world’s largest industry. Like those old mainframe computers, he says this grid is exceptionally outdated — the American Society of Civil Engineers gave the country’s energy infrastructure a grade of D. Less than 15 percent currently takes advantage of renewable energy (solar, wind or batteries).
But while the main stakeholders in the computing industry — IBM and its competitors — recognized success would arise from consistent innovation, the players in electric seem to be pushing the exact opposite agenda. A Department of Energy proposal following recent natural disasters like Hurricanes Harvey and Irma pushes more spending on traditional power plants, run on coal and nuclear, to maintain the grid.
Those plants are getting more and more expensive to maintain as they age. But rather than exploring cheaper, more sustainable options, the proposal suggests staying the course by increasing consumer electric bills to cover costs.
Updating the grid, Nussey says, will be the computing equivalent of moving into the smartphone and tablet era. This can be accomplished by transitioning to local energy — a concept similar to the farm-to-table movement — where individual stakeholders and communities generate energy in the same place where it is used. Think of a neighborhood running a solar grid on its own or a business transitioning to energy it produces itself.
There are already examples of this happening all over the world, though as of yet they’re relatively few and far between. In New York, the Brooklyn Micro-Grid opened last year to generate secure, affordable, and clean energy for two neighborhoods — it is set up as a private B Corp that provides an alternate choice to the traditional utility suppliers. Nussey likens this micro-grid concept to a farmer’s market for electricity.
Shifting at least part of our electricity to local energy would solve a number of challenges presented by the current system, according to Nussey. One is security — a utility-dominated grid, like anything wholly-centralized, is fraught with potential for security risks. It can be taken out by extreme weather events — when Hurricane Ike hit Texas in 2008, it’s estimated that 95 percent of the widespread blackouts were caused by damage to less than 5 percent of the grid. A centralized grid is also more vulnerable to hackers.
Local energy is cheaper. In the current standard utility company model, 3/5 of a customers’ electric bill goes towards maintaining power plants. Technologies like solar, wind and batteries — and Nussey is clear in the distinction that these local, clean energy sources are technologies, as opposed to finite fuels like coal or natural gas — are only getting less expensive.
Finally, these technologies are, of course, cleaner. They don’t generate the waste of a coal, gas or nuclear plant; they don’t produce pollution. They won’t run out, and they’re increasingly getting cheaper.
Nussey is a technology guy. His vision for the future of energy is one where individuals and businesses can buy and sell power in open, local electricity marketplaces. He also has a business mind, and he feels sure that whatever his next company will be, he’ll be able to capitalize on this shift.
Of course, with a free market, other energy-minded entrepreneurs can do the same.