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Why New Daedalus?

Daedalus was the mythical great architect and artificer of the classical world. Today, embedded intelligence is enabling the most profound changes in the way we create and use buildings since his day.

Building Intelligence meets the Intelligent Building. The Intelligent Building negotiates with the Intelligent Grid. How will this transform how we interact with the physical world?

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Tuesday
Sep232008

Free markets are Live Markets

The Wall Street Journal looked at Texas Energy price increases this year and got nearly everything wrong.

The big changes in electrical prices in Texas this year mirror the price changes in all energy markets. It is unclear to me how people think that *any* industry, no matter how regulated, can repeal supply and demand for its primary supplies. Some are arguing that these price changes argue for extended market regulation. The regulated energy market is not the natural order; we have a regulated market structure only because nothing else made sense in 1908 when the current model was created in Chicago..

Renewable energy will not work until we break the dependency on the perfect grid. The current grid requires spun up power plants, always ready, to achieve reliability. This spin reserve is an effective tax on every renewable energy source because unfortunately renewable ==> unreliable

You can gain reliability by combining a number of unreliable sources, as long as the reliability profiles for the different sources are different. This requires scheduling and wide area service choreography, and perhaps even architectures with full ontologies, as some laughed about yesterday on another thread. Those interested should just google Kombikraftwerk.

There is an interesting combined power generation scheme currently underway in the inland empire area of California, that combines remote web control of household systems, including homeowner intervention (Don’t regulate anything today – my wife’s parents are in town and I do not want to listen to my mother in law complain!). What is unique about the system is that it is only installed in house that also have solar panels, and the excess output is sold back to the grid at prices as if it was one large distributed solar PV generator, a virtual power plant. This business model, and many others, only works with the extra incentives of live time-of-day pricing.

Many observe that live pricing does not work very well with the home and office infrastructure we have. Well, the internet did not work very well with the phone infrastructure we had 20 years ago. Live prices will be what creates the infrastructure of tomorrow that will work differently.

One difference will be home storage of energy. Energy storage need not be limited to batteries or lakes in the mountains. A tank of icy slush in the basement is a fine energy store if your major energy use is daytime cooling; cool it at night and use it for Air Conditioning during the day. Your heat pump to make the slush is also working more efficiently when it is cooler outside. At a 20% price difference between 2AM and 2PM, that slush might start looking pretty good. At a 50% difference, everyone might have one. We do not know what folks will come up with, and without market information on value and scarcity, we won’t.

It is these new markets that make live pricing important. New business models will change technology decisions.

Local storage becomes an additional use for any locally generated power. This increases the benefits for both generation and storage. This continues to make folks less sensitive to grid fluctuations. This ecology of local energy requires live pricing to thrive.

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