Technology Driving Next Wave of Growth
By Kurt Yeager, Electric Power Research Institute
The beginning of the second electricity century is a good time to assess the future of the industry. I may surprise some of you by assert-ing the electricity enterprise is about growth. “Enterprise” speaks to the industry we are becoming. And the driver is technology.
Since the 1890s, electricity has been society`s prime mover, revolu-tionizing our way of life. Its advantages in focusing and ampli-fying physical power during its first century are being complemented in the second by its even greater advantages for focusing and amplifying the power of know-ledge. When combined, it is likely electricity will expand in the next half-century to provide over half the world`s energy demands. Electricity growth over the coming decades is likely to follow an S-shaped wave, similar in size, shape and influence to two earlier waves that characterized electricity growth over the first electrical century.
The first one began about 1890, surged through the 1910s and 1920s and flattened out by the late 1930s. The second one–building on the technologies coming out of World War II–surged through the 1950s and 1960s and flattened out by the 1980s.
The “growth force” that lifts and drives each subsequent wave of growth remains innovative tech-nology. Much of the restructuring under way in the industry today can be traced to the market`s perception of the revolutionary change under way in the industry`s technology base and the new cost reduction and service opportunities that innovative technology can produce.
It is important to keep four points in mind for understanding the growth scenario for the emerging electricity enterprise: First, technology is fundamentally changing the electric power business. Second, technology is fundamentally changing our customers` business. Third, tech-nology is changing the interface between the industry and its customers. And fourth, smart investment and optimum use of technology are the strong chips for the electricity business in the emerging electricity enterprise.
Modular technologies–most notably relatively inexpensive, high efficiency combustion turbines which emerged in the 1980s along with low natural gas prices–have lowered dramatically the entry barrier to this industry, bringing in new players and, in turn, accelera-ting competition and the forces of deregulation. The industry is becoming fundamentally more diverse, disaggre-gated, commingled, unbound and, in some interesting ways, turned “upside down.” The customer, not supply, is the king. Kilowatt quality along with kilowatt hours will be the new measure of value.
Technology is fundamentally changing our customers` business. Information and capital flow to all parts of the world simultaneously by satellite telecommunications and computers. Production technology is flowing to economies outside the United States. Every industry in the United States is shopping for lower cost and better service to meet global competition. Our customers are more receptive to advanced technology. They not only want to cut costs, they want to become more productive.
Electricity remains the essential platform for productivity enhancement. Information technology, automation, robotics, process control and the amazing range of new digital electrotech-nologies are all electrically based. They have become the essential tools of competitive advantage. Customers not only need high quality power, they need knowledge and the insights of the broad electricity enterprise to help transfer new ideas and techniques to their line of work.
Technology is shaping the relationship between us and our customers. In the boundaryless world of the future, the business is more than selling electrons–it will be selling the value-added services that make customers more produc-tive and partnering with them to assimilate the accelerating pace of new technology and knowledge ahead of the competition.
The business of our customers is in fact becoming our business. Their productivity concerns become our productivity concerns. We are no longer just in the electricity business but are really in the productivity business. Isn`t that what electricity is good at–making all tasks more productive–easier, faster, more efficient? In brokering solutions to customers` productivity problems, all technology, not just power techn-ology, will be fair game.
To ignore new technology, or simply presume it or to turn one`s back on it is a sure way to be blind-sided by the overwhelming forces of technological change. Sometimes technology emerges directly out of an industry, sometimes it crosses over from another industry and sometimes technologies fuse at a critical juncture, creating entirely new fields.
Right now we see a holistic information industry being formed from today`s TV, cable and computers, but we can also envision the fusion of energy and information, electronics and biotechnology, materials and electronics, and more.
The electric power industry`s great challenges can be won. But we need to push beyond the bounda-ries of the electricity industry we have known. We need strategic, collaborative investment in the science and technology to build the emerging electricity enterprise. We need the technology vehicles that best position our industry for the new electricity growth curve. We must realize that technology no longer belongs just in the domain of the engineers, unattached to business interests. Technology is now central to an organization`s destiny.
Electricity remains the essential platform for productivity enhancement. Information technology, automation, robotics, process control and the amazing range of new digital electrotechnologies are all electrically based.
Kurt Yeager joined the Electric Power Research Institute (EPRI) in 1974 and held a series of management positions until, in 1990, he was named senior vice president of technical operations, responsible for the integrated management of all EPRI technical programs. In 1994 he was named senior vice president for strategic development and, in 1995, executive vice president and chief operating officer. Before joining EPRI, Yeager was director of energy R&D planning for the Environmental Protection Agency`s Office of Research, and prior to that he was associate head of the Environmental Systems Department of the MITRE Corp.
Yeager earned a bachelor`s of science in chemistry at Kenyon College and completed postgraduate studies in chemistry and physics at Ohio State University, The University of California at Davis and with the Air Force Nuclear Research Officersí Program. He is also a fellow of the American Society of Mechanical Engineers.