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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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Watered-Down Energy

I’ve wondered here before how water intersects with energy conversations. As I write this on a plane leaving San Diego, which has been in a drought, I have just read of how a well meaning public agency has once again created perverse incentives on the use of scarce resources. A central tenet of sustainability is that we must consider the full external costs of our activities. It is ironic that incentives that result in perverse outcomes appear again and again in the plans for sustainability.

The developing plan appears to be based upon price-based custom rationing. Each household will receive a per month allocation based on a percentage of its historical use. Households who use more than the target will be charged at five times the normal rate for the additional water. This is rationalized as the "fairest" because it affects all houses based upon their "needs".

Long time conservationists are protesting. If you have been using water wantonly, you will experience a barely annoying reduction to some level of use that is still far above the norm. If you have been sparing in your water use, whether due to philosophy, parsimony, or poverty, you will now be asked to cut beyond inconvenience, or to pay costs far higher than your neighbor who has never conserved.

Some households were interviewed admitting that they were increasing their water use this month so they would have a bigger allocation when the rationing kicks in. Interference in free markets always creates some sort of gaming. In this case, the proposed solution is encouraging people to make the problem worse today. We need to be mindful of this effect as we consider proposals for DR (demand response) and other energy strategies that rely on technocrats trying to outthink the market.

One long-standing feature of water allocation here in the arid west is water rights. Legal recognition of water rights was necessary to quell some of the great battles of the wild west. Water rights are used to allocate shares of water from the Colorado between Nevada, Utah, Arizona, and California. Water rights support long term investments in farms and orchards by establishing long term access to a resource that is indispensable in the deserts of the southwest. If you buy land without the water rights, you may have no right to the water that falls on or flows across your land.

Water rights, or the lack of those rights, has caused great consternation in at least one new bedroom community of Denver on the western slope. The community has been marketed as green, and the homeowners are earnestly saving the planet by installing rain barrels under roof downspouts to support their gardens and landscaping. The problem is that they do not have rights to that water. Hundreds of homes impounding the water from thousands of acres of land will destroy downstream agriculture with longstanding rights to that water. Somehow this seems as a cruel joke to those now moving into the new development. After all, it is rain falling on their land!

Sustainable development activists have long advocated the trading of land rights. To sustain “rural character”, farmers have been urged to sign away the right to develop their land in return for permanent tax breaks on their land. In other areas, land conservancies have bought up those development rights for cash now. It is ironic that this same community now does not understand water rights.

Energy and water are about to become more entwined. In San Diego, there are perennial proposals for a massive desalination plant to remove this dependence on the constrained supply from the Colorado River. San Diego actually had one in the past, one that was ordered transferred to Guantanamo Bay by Kennedy following the Bay of Pigs fiasco. San Diego has debated a replacement, and who will pay for it, ever since.

The desalination plant will require electricity, and a lot of it. Proposals on the table range from a collocated nuclear plant to an untested wave generator. There is predictable high concern over the nuclear option, concern that seems to trump the unknown effects on the fragile coast and marine fauna that the large wave generator might cause. Unremarked in these conversations is that the San Diego power grid frequently receives power from mobile floating nuclear plants; the Navy has long kept their nuclear warships powered up when docked by selling power to the grid.

Water and Electricity just seem to go together.

I sometimes wonder whether energy rights will look more like water rights in the future. Google has demanded primacy of energy rights to nearby hydropower as part of economic development packages that put their data centers in rural areas. Is this right tradable or assignable?

Will regions that dedicate large tracts of land to allow the construction of alternative energy or for the transmission of energy demand energy rights as part of their payment? Do these rights transfer with the land, or are they separate? Should some communities demand or accept energy rights in return for assuming stranded costs and setting the electrical industry free? How will these markets develop?

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