Energy Economy

Dan Rogers, an economic developer from Kendall County, Texas, just told a story about a conversation that just occurred last week. A middle manager who lives in Kendall but commutes about an hour to work out of the region related to Rogers that he had negotiated an agreement with his firm to let him work two days a week from home to save on the cost of commuting. He was able to do that because he has fiber to the home and can access the corporate network as if he were sitting in his office at the main company location.

Gas prices are going to start changing the way we make decisions about where we live and where we work. Communities with fiber have a better chance of weathering those changes successfully, as it gives both workers and businesses more options.

The sharp increases in gas and diesel fuel are raising the cost of commuting. Even if fuel prices recede (as they did after the '73 oil crunch), it seems likely that we will never see $2 gas again, and it may be that $3 gas becomes the new normal.

While the cost of fuel affects everyone to some extent, rural communities may be at most risk. Many workers in rural towns drive long distances to work, and a doubling of the cost of such drives may make it too expensive to make those commutes for a $12 or $14 per hour job.

Like the Chinese ideogram that can be read both as "danger" and "opportunity," the fuel crisis may, over the long term, be an opportunity for some rural towns, and could be the end of others. If it is too expensive to drive long distances to work, some workers and families may move closer to the work, further reducing the viability of some rural communities that are already struggling with long, slow declines in population.

But some businesses may decide to move closer to workers, and rural communities with the right economic development strategy to attract such businesses may have an edge--if they have good quality of life, attractive and vibrant downtowns, and .... broadband.

Community broadband projects can have a double impact. Properly designed community networks that extend affordable broadband into residential neighborhoods and along rural roads can bring new kinds of work from home opportunities to a rural workforce--getting them off the road completely and eliminating long commutes entirely. Fiber in business and industrial parks can attract businesses, which won't even consider some communities unless fiber services are available.

Rural communities will have to respond to the fuel increases with well thought out, long term strategies to help reduce commuting costs for their residents. Those that don't will see more workers and families moving away--reluctantly, but leaving nonetheless.

Look for "fuel surcharges" to rapidly increase the cost of certain kinds of services. Our last Fedex bill included a $10 fuel surcharge on top of the normal $48 delivery charge for a single package. It's hard to imagine, given the volume of packages that Fedex handles, that every package now requires a 20% surcharge.

This little gadget would be a useful addition to any home emergency kit. It is a small, folding solar panel that fits in almost any bag or briefcase and has a variety of adapters to charge cellphones, iPods, GPS receivers, and other small portable devices. The best thing about it is its USB port, so it will charge almost anything that can be powered via USB.

Electric cars don't produce emissions, but the batteries have to be charged up by something. If that something is fossil fuel, you still have pollution and potentially high energy costs. A new generation of nuclear power plants, which emit virtually nothing into the air, may be part of the long term solution to the ever increasing cost of fossil fuels.

The new plants are smaller, safer, and loaded with safety features that make them easier and safer to manage.

If there was not already enough to worry about, the CIA has indicated that the agency has credible evidence of terrorist cyber-attacks on electric power grids outside the U.S.

The terrorist hackers are breaking into the computer systems used to manage electric power grids and, according the CIA, successfully causing blackouts. This kind of threat will likely increase the interest in decentralization of IT facilities in the U.S., making rural areas with reliable electric power and well-designed business parks attractive relocation prospects. A "well designed" business park would some Class A office space available for immediate lease and fiber and telecom duct throughout the park.

The Energy Economy continues to generate some of the most innovative new ideas we've seen in a long time. University of Delaware researchers have proposed V2G technology (Vehicle to Grid). A home and automobile designed to support V2G would be able to send electric power stored in the battery of an electric vehicle back up the grid--making your electric meter spin backwards and reducing your electric bill.

Why would you do this? You can recharge your electric vehicle at night, when the cost of electricity is lower, and sell some of that cheap power back to the electric company during peak demand periods when electric rates are higher. This approach turns electric cars into electric generation facilities.

The V2G system requires some changes to the onboard electronics of electric cars, and the home would have to have AMR/AMI (Advanced Meter Reading/Advanced Metering Infrastructure) installed so that the electric company could tell the car to send electricity back up the line.

Cities like Danville, Virginia are already designing AMR/AMI (Smart Grid) services to be part of its multi-service open broadband network. Danville's combination of a high performance, open "digital road"system combined with resilient and reliable electric power make it attractive for high tech businesses (Disclaimer: Danville is a Design Nine client).

Here is a question for local and regional planners: Do your building codes requires a separate 240 volt electric circuit to the garage to charge electric vehicles? Do you require a separate 240 volt plug in the garage for each bay (one plug per vehicle)? If not, why not?

Communities that work with developers to add the broadband and electric infrastructure to new homes to make them "Internet ready" and "electric vehicle" ready will have some real marketing advantages when promoting their communities to relocating businesses.

A California start up backed by the Google founders may have developed, finally, the break through that the solar energy business has been waiting for. Traditional solar cells have always required an expensive fabrication process that used silicon as a raw material. Nanosolar has developed a process that prints a nanotechnology based ink onto thin sheets that can be put on roofs of buildings, on top of cars and trucks, and anywhere that electric power is needed. The sheets produce electric power at about one-tenth the cost of existing panels.

If you have worried about having some alternative source of power during power outages but don't want to keep a gas-powered generator around, this new human-powered generator from Freeplay may be just the thing.

It uses foot power to generate enough electricity to charge cellphones and laptops and to run or charge other small wattage devices. It also comes with jumper cables so that you can jump start (literally, by jumping up and down on the pedal of this thing) a car. It comes with a cigarette lighter style 12 volt adapter so it can be used with any device that has a 12 volt charger.

This would be an ideal alternative energy source for someone that lives in a high rise apartment or condo where it is not possible to store a gas powered generator (and a can of gasoline).

A new manufacturing process for creating solar panels at half the cost of the old way of making them is about to come online in a new plant in Colorado. Developed by a Colorado State engineering professor and perfected over sixteen years of study, the new low cost solar electricity option could open many more opportunities to use solar power to replace fossil fuels.

For those interested in entrepreneurial and small business opportunities, expect to see rapid growth in coming years in energy businesses--not old-fashioned Manufacturing Economy energy production or delivery businesses (e.g. power plants, fuel oil and gas delivery, etc.) but instead installation of energy saving devices (solar water heaters), small scale energy production (solar panels, fuel cells), and energy management devices (timers, active power management), and energy conservation (insulation, high efficiency windows, etc.).

The net result is that over time, our homes and businesses will require less energy from traditional sources and we may be making a lot more energy at the point of use.