Good news! Soaring energy costs could get even worse, spurring a new era in which people make clean power for themselves.

Blaine Greteman | September 2008 issue

In the 1920s, millions of rural Americans got their energy the same way they got their butter—they made it themselves. Off-grid when off-grid wasn’t cool, they used some 600,000 windmills to run radios and power, maintaining sputtering lights with an electric current that ebbed, flowed and sometimes simply disappeared with the prairie wind. Fully 90 percent of those windmills disappeared within a generation, as even the most isolated farmers eagerly plugged in to the new centralized power system.
But today the same technologies that help iPod-bedecked college students steal music are reviving the model of microgeneration—clean, decentralized power that people make themselves—by linking homes into a vast network that keeps buzzing even when the wind stops blowing. Microgeneration, meet the YouTube ­generation.
“We’re talking about a new meaning of ‘power to the people,’” raves Jeremy Rifkin, alternative energy activist and adviser to the European Union and many European governments. Forget about wind farms and solar plants run by conventional utility companies, he says. “In the new energy regime, the people are the utilities and their houses are the power plants.”
From Rifkin’s perspective, the problem with those early windmills wasn’t only the technology, which was primitive, but the zeitgeist, which had gotten going in a totally different direction. A global industrial revolution was afoot, and its ethos wasn’t rural self-sufficiency but centralization.
According to Hermann Scheer, a member of Germany’s Bundestag and president of the European Association for Renewable Energies, “The route to modernity was like the Olympic principles, ‘faster, higher, stronger’—centralized technologies and societies.” Growing central governments built centralized power plants that ranked as the largest human structures ever created, quickly electrifying everything from big new factories to sprawling new homes to giant media companies that piped a steady stream of information to everyone on the vastly expanded grid. The model for both energy and information was the one-way street.
Today, however, pioneers on the green energy frontier are remaking the power grid in the image of the Internet. “Can you imagine the generation that grew up on file-sharing, Wikipedia and MySpace surrounded by coal-fired or nuclear power plants?” asks Rifkin. “It doesn’t make sense. It doesn’t fit the gestalt of anyone under 40. It’s just old-fashioned, centralized top-down technology.”

The dawning alternative, he claims, will not only remake the way we get our power but represents a paradigm shift so complete that it will also change human consciousness and social relations. “When energy revolutions converge with communications revolutions, those are the pivotal points in history that change the human equation.”
The cornerstone of this new grid is buildings that produce, rather than just consume, energy. (See “Power couple” on page 28.) Instead of sucking energy from a centralized plant, these homes and office buildings convert wind, solar and biomass into electricity, which they use, store for later as hydrogen and “upload” onto the grid. The technology is leaping forward at the same pace that turned personal computers from geeky boutique items to essential home appliances in less than a decade—in fact, it’s being developed and financed by the same high-tech titans who led that charge.
You can see the shape of things to come in an office park just outside Paris. There, the French property development firm Bouygues Immobilier recently laid the foundation for one of the world’s first large energy-positive buildings (oil giant Abu Dhabi is competing for the title of “first” with the building that will serve as headquarters for its planned zero-carbon city, Masdar). When completed in early 2010, the 23,300-square-metre (250,000-square-foot) French facility will generate 69,900 kilowatts more per year than it consumes—enough to power 14 average European homes.
The American snack food company Frito Lay is even proving that energy-intensive manufacturing plants can be made to fit this model. Its factory in Casa Grande, Arizona, once used enough natural gas to heat 13,000 homes; after a retrofit due for completion by 2010, it’ll power itself using only the sun and biomass from leftover food scraps like potato peels.
Experts like Rifkin and Scheer argue that soon our power could come from tens of millions of buildings like these—large and small, making their own energy plus a little bit extra to sell back to the grid—instead of a handful of big power plants. The same technology that fuelled the Internet revolution could link them, so if it’s cloudy in Brussels, solar-fuelled homes there could draw their energy from beach houses on the Costa del Sol in Spain or office parks in the Parisian suburbs.
Moreover, as Rifkin explains, “Sensors and software will connect every appliance across the continent—every washing machine, every toaster—so if there’s too much demand in a region at some point, the software can tell 100,000 washing machines to go down one cycle per rinse or adjust 50,000 thermostats by one degree.” Users will be able to pre-set their own consumption limits so they never have to worry about involuntarily taking cold showers when they’ve consumed their quotas—unless, of course, they decide it’s worth a cold shower to sell premium-priced, peak-load electricity back to the grid. Rifkin likes to call this kind of network an “intergrid.” Others describe it as a “smart grid” or “intelligent utility network.”
This connective, decentralized model answers the primary argument that has made renewables the poor stepchild of the big energy family for so long. Renewables ebb and flow and are, by definition, distributed all over the globe. So you can’t build enough big power plants to collect their energy and run a national economy—much less a global one—even though enough sunlight shines on the planet every hour to power it for a year. By contrast, fossil fuels are concentrated and ready to extract and feed into big, powerful plants.
But the Internet has taught us a few things about harnessing distributed power; namely, that if you hook thousands of small home computers together on a network, you can generate computing power at a magnitude that could never be matched by the largest mainframe supercomputer. Many have experienced this phenomenon while “sharing” music on the Internet: programs like LimeWire allow hundreds of people to download a single file, without crashing anyone’s system or eating up too much bandwidth, by carefully redistributing the load. Likewise, Rifkin notes, “We can take IT to the power grid, too, and it will exceed anything you could produce with centralized coal-fired or nuclear power plants.”
This isn’t just wishful thinking. A study by the U.S. Department of Energy showed that Seattle area residents reduced energy bills 10 percent and peak loads 50 percent by using smart grid technology—even without installing green generating capacity. If the Bouygues Immobilier building were connected to this kind of grid instead of to the current one, it could help power not 14 houses but more like 14,000, while making its owners lots of money. And none of us would have to turn off our computers and sing “Kumbaya” when the fog rolled in.

The Seattle project incorporated IBM’s “service oriented architecture” (SOA), now being used to build smart grids in several U.S. states and Australia. Country Energy, Australia’s largest utility, hopes to have a 10,000-home pilot project running by the end of the year, and convert its entire network by 2020.
An IBM survey of 1,900 households around the world uncovered a surprising finding: The ability to “be on a more equal footing with their providers” was a bigger incentive than either cost or environmental impact in opting for a smart grid. Given the chance to upend the traditional power structure by selling energy back to the utility companies, 62 percent of households were eager to turn their homes into power plants—a case of ethos over economic interest.
Hermann Scheer, who authored Germany’s groundbreaking Renewable Energy Sources Act, has seen how powerful this model can be. “Scheer’s law,” as it’s sometimes called, provided guaranteed rates to those selling renewable power back to the grid, and helped catapult Germany’s green energy industry forward. The country now adds more than 3,000 megawatts of renewable energy each year.
To put that into perspective, it takes about 18 months to build a typical 500-megawatt natural gas plant, and it took 23 years for the U.S. to build its last nuclear power plant, the 1,161-megawatt Watts Bar reactor. “It can be done as fast as the transition to mobile telephones,” says Scheer. “Society begins to reorganize itself around the reorganization of energy.”
That empowering potential is especially promising for the developing world. Energy access is perhaps the most profound divide separating the rich North from the abject South. Right now, a quarter of humanity has no access to electricity whatsoever, and those 1.6 billion people are among the least economically and politically empowered on Earth. Stats like that are especially troubling since the UN has long argued that energy access is crucial to facilitating its wide-ranging Millennium Development Goals, from improving education to reducing infant mortality and HIV/AIDS. Indeed, studies of South Africa’s massive post-apartheid electrification program show that for every 100 households electrified, 10 to 20 businesses are created. Women, who previously spent much of their days gathering cooking fuel, made particularly large strides in health and employment.
Meanwhile, development campaigners have despaired of ever building a central infrastructure that could solve the problem. In fact, Scheer argues that centralized power structures helped create the problems: “We took a highly centralized power system that had developed in our countries over 100 years, and transplanted it to these rural societies overnight. It was a disaster for these civilizations.” Without money to extend the central grid to remote areas, only the cities were electrified, and they soon experienced an immigration boom that overburdened infrastructure and left rural areas behind.
Mobile phones, however, have already shown one way new technology can leapfrog the old infrastructure in the developing world. Africa, for example, has only 35 million fixed lines but has added 70 million mobile connections in the past year, for a total of 282 million cellular links. Smart grid technologies may have the same potential.
In fact, a pioneer of the mobile phone revolution in the developing world, Iqbal Quadir, has already taken up the gauntlet. In a little over a decade, Quadir’s company, GrameenPhone, revolutionized his native Bangladesh, adding 20 million subscribers in one of the world’s poorest countries and inspiring hundreds of thousands of “phone ladies” to start small businesses offering cellular service to neighbours. GrameenPhone registered net profits of $137 million in its most recent annual report, which is why Quadir believes his new venture, Emergency Energy, won’t only save lives and eradicate poverty, but make money.
Emergency Energy plans to put small, biogas-fuelled generators in the hands of rural entrepreneurs throughout the country. Each generator can electrify up to 20 homes, and in trial runs consumers eagerly paid to plug in and power up. Such models aren’t just a good option for areas that have been left behind by globalization, says Scheer, they’re “the only chance.” Rifkin agrees. “We just need to get the technology cheap enough and we can empower a revolution that will give us globalization from the bottom up.”
Scheer recalls critics of the Renewable Energy Sources Act who were determined to derail it, telling him, “You’re illusionists, dreamers that would endanger the economy.” Now, Germany’s Federal Ministry for the Environment estimates the act has helped create in excess of 130,000 jobs. Even German Chancellor Angela Merkel, a conservative whose election spooked some in the renewables sector, enlisted Rifkin to help formulate and implement a plan to revitalize the world’s third-largest economy.
Indeed, the timing for a paradigm shift couldn’t be better, in part because things in the traditional energy sector can’t get much worse. When Frito Lay announced its Casa Grande project in 2007, oil prices were far below $100 per barrel and some observers saw it as more of a publicity stunt than a smart business decision, since it would take 25 years to pay off. Today, with oil racing toward $150 per barrel, such decisions look even better on the bottom line than they do in the press.
Jeremy Leggett, CEO of the UK’s largest solar company, Solar Century, cites the recent unexpected depletion of the world’s second-largest oil field, Mexico’s Cantarell, as a sign of things to come. “When the world oil supply starts Cantarell-ing, we’ll have to make very rapid choices, and this debate won’t last very long,” he says. “It really is possible that we’ll get to that utopian vision very quickly.”
That doesn’t mean it’s destined to be easy. “These are incredibly powerful entities, extremely resistant to change, and not just the power industry but also people who think in the old way in government,” says Leggett. “That kind of thinking has the potential to create a lot of damage.” Adds Scheer: “Optimistic is one thing, but one should not be naive. The new energies make them feel vulnerable. And they are right to feel that way. Their business model will disappear.”
As the world’s largest industry tries to maintain its grip on a centralized power structure, Scheer believes, “They will argue that even with renewables, we need large power stations and big investors and that we have to wait for them.”
Perhaps it’s a good thing, then, that the people who gave us YouTube, Google, Wikipedia and MySpace are also known as Generation Now.