California is again driving the world toward technologies that will disrupt how we live and work. This time California’s focus is on commercializing clean tech. The state is pioneering technologies to achieve a 40 percent reduction in greenhouse gas emissions by 2030.
But that is just the environmental element of the state’s technology strategy. California seeks to make clean energy and a smart Internet of Things (IoT) system the world’s dominate energy strategy. The state ambitiously seeks to redesign the world’s cars, homes and businesses to do more, cheaper and cleaner.
This is not a watermelon strategy. California sees a gold rush opportunity to be the global clean tech/smart IoT technology leader. This strategy is an integral part of the state’s economic development ambitions. And it is already demonstrating results. California is growing its economy faster than the U.S. economy while also reducing climate-changing emissions.
The first of this two-part series profiled the four drivers behind California’s tech ambitions for a clean, lower-cost and smart IoT electricity system. This second article identifies the five technologies California is commercializing to deliver a clean/smart IoT electricity system that will change how we live, what we drive and how we operate our businesses.
Seven elements of California’s clean, smart IoT electricity strategy
California’s approach to electricity mirrors their success in pioneering IoT and the cloud. The state is attempting to create a smart-electricity system that links consumers, buildings, cars, suppliers, digital technologies, appliances and price signals. This strategy has these seven moving parts:
- IoT technology
- Renewable energy
- Battery storage
- Real time pricing
- Reengineered utility role
- Electric cars
- Carbon pricing
Ironically, the challenge is not technological. The enabling technologies have been invented. These technologies are now on an economies-of-scale and technology-maturation path that will deliver competitive unit costs.
Special-interest resistance is the barrier to California’s tech strategy. There is significant resistance from special interests, each with their own motivation. For example, utilities want to protect their role and profits. Customers want lower prices to motivate them to choose the disruptive solution. Vendors are competing against the utilities and themselves to win market share.
Special interests are impacting policy implementation. California’s strategy is being buoyed by the legislature. In support of the legislature, the state’s governors have issued a series of executive orders setting ambitious goals for state agencies. Separate government agencies, including the California Public Utility Commission, California Energy Commission and California Air Resource Board, are enacting rules to comply with legislation and executive orders.
Politically, California is moving faster than any state, or country, toward commercializing a clean-tech and smart IoT electricity system. But in realty, the state’s political/government progress — influenced by special interests — can be characterized as two steps forward and one step back.
Five technologies driving California’s clean tech/smart IoT electricity system
Five technologies are at the core of California’s technology vision. These technologies are:
- Smart buildings. California is radically revising its building codes to make Zero Net Energy buildings the permitting standard.
- Onsite solar generation. Solar electricity is at price parity, or cheaper, with most utilities’ retail prices. In addition, solar is more reliable. If the sun is shining (including cloudy days), solar panels will produce electricity. Panel failure is very rare because there are no moving mechanical parts. Today, most solar systems are designed so if one panel fails, the others still operate. Utility and regulatory policy are the national implementation barrier to on-site solar. The day is coming when electricity prices will rise dramatically after domestically-produced natural gas prices align with global natural gas market prices. When that day arrives, there will be a customer (voter) stampede for rooftop solar that will overcome today’s utility/regulatory resistance.
- Onsite batteries. Onsite batteries are the next technology leap for solar and wind power. A new generation of battery technology is coming online in California. The state is creating demand for the battery industry like it did for the solar industry. The result will be a dramatic drop in price gained through manufacturing economies of scale. The industry is also gaining lower prices through incremental technology advancements. While still costly, California is driving batteries toward price-competitiveness with the current utility system of using fossil-fueled peak power plants.
- Smart grid. Too often the utility concept of a smart grid is that the utilities will be the smart ones. Utility smart meters are seen as the hub around which customers operate. However, the tech history points to the smart grid being a shared IoT. Smart appliances, solar systems and batteries will interface with a smart grid just like computers and smartphones interface with the Internet. ZNE buildings will search the smart grid and buy or sell electricity based on price, cleanliness and reliability. Like Amazon Web Services, utilities or a similar agency will host the grid and provide services that are least cost, clean and reliable.
- Electric cars. California has the goal of 1 million electric cars on the road by 2024. Electric cars are part of the state’s clean tech/smart IoT strategy. Electric cars are already fuel price competitive with gasoline cars at less than $1 per gallon gas prices. GM and Tesla are on track to introduce electric vehicles with 200-mile single-charge ranges that are price competitive with the average retail new car price. The real tech leap will be electric and autonomous driving cars. California’s cities are pioneering urban transportation models based on IoT, shared economy apps like Uber and electric/autonomous cars to make commuting faster, easier, cheaper and cleaner. What city or commuter would not want to buy that!
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