It is increasingly difficult to find aspects of our lives that technology has not transformed – from the phones in our hands to how we read books.
Whole industries are converting to the digital domain – the new world of information technology (IT) where software, networks, processors, and sensors fuse and exchange information.
What makes this shift so compelling that seemingly no business can resist? There are many reasons ranging from new features to faster delivery of goods and services to greater productivity. However, first and foremost, is performance over cost. Eventually, information technologies deliver faster rates of improvement because performance increases exponentially (in the numerator) while price decreases exponentially (in the denominator). Businesses that resist “digitization” are at risk of being rendered obsolete.
Look closely at the electrical grid. In contrast to many other industries, the way we generate, transmit, and distribute electrical power is still firmly rooted in “pre-IT” technologies. Despite its millions of miles of humming wires, thousands of power generators, and billions of interconnected devices, the grid still operates primarily under the control of antiquated technologies developed before the modern computer and Internet era. Nonetheless, under the hood of new grid-tied control systems, a digital revolution is under way. The revolution delivers higher performance, lower cost, and essential new features such as seamless integration of electric vehicles, grid-level energy storage, and distributed renewable energy generation. Although in its early stages, the smart grid revolution has begun and no energy business can afford to ignore it.