How Energy Use Dwarfs the Power of Facebook and Twitter

How Energy Use Dwarfs the Power of Facebook and Twitter

Very few topics generate more buzz these days than news about social networks. Just how big is Facebook, and what, exactly are our kids doing on it every day? How will Apple create a network around music, and what's Google doing about it?

It's easy to forget that the world's largest business -- energy -- also represents the world's largest network, a nexus of wires and pipelines, consumers and "content providers" (a.k.a. energy producers) all tightly connected in a $7 trillion a year enterprise.

It's a network that's always on, whether you're talking about the clock radios and refrigerators that populate our homes, or the tankers and oil wells that feed our morning commutes. Most importantly, it's a network that can host surprising, even world-changing innovation that make our lives more interesting, more productive, and more secure.

Companies around the world are starting to exploit the network characteristics of energy. They're beginning to understand that their organizations have an energy nervous system and an energy metabolism. Businesses are innovating by mapping these networks, from the lights they use in offices and stores to the wires and generators that power them. They're using new software and new machines that help them deliver more goods and services for less and less energy at even better prices.

Corporations are also hedging against the risks inherent in this vast network. Up and down their energy and material supply chains, they're mapping their vulnerability to price shocks and environmental impacts. Companies like Walmart are collaborating, not just on their local grids, but across the globe to drive new levels of energy efficiency and therefore reduce risks to their bottom line.

Many of these same companies are extending their energy efforts out into their network of customers. Best Buy measures on a real-time basis how much energy it's saving its customers through the sales of efficient appliances. Safeway and Apple "like" clean energy and are telling their customers that every day. Guess what? Their customers like them back.

Recently, a whole country explicitly recognized that it represents a vast energy network. The sovereign nation of Abu Dhabi announced the creation of the most networked energy efficiency effort to date, and will be tying every building in the country (200,000+) to one energy information system. Landlords, property owners, and average citizens will have the chance to "crowdsource" efficiency and the savings are projected to top $3 billion.

Countries like the United Kingdom and the United States are also exploiting these network characteristics to achieve important policy goals. The U.K.'s Carbon Reduction Commitment starts with getting every major player on the grid to report in so that they can re-network their energy system to fight global warming. Independent of legislation, the U.S. government is extending energy efficiency and sustainability mandates out through all of its procurement, a vast supply chain that involves every major corporation in the country.

You can even think of the UN Climate Change Conference in Cancun this year as the energy network's version of a meet-up. The focus is on global warming, but the subgroups include specialists that range from bunker fuels (aviation and shipping) to forest preservation. They're hashing out new network standards for who gets to use how much and what kind of energy, and how to account for it all.

Like social networks, the concept of a global energy network isn't new, but the tools available to connect the dots, to mine the data, and to rewire relationships are. Smart meters, like your Facebook page, aren't without controversy but there's no doubt they're creating new ways to see your everyday life.

A new breed of enterprise software is also emerging that can track and analyze the use of energy and environmental resources and, for the first time in history, can give companies, organizations, and even whole nations a view of their whole energy network. And that view is driving unprecedented innovation in behavior, equipment, and investment that optimizes efficiency and resource use and maximizes outcomes like revenue or services rendered.

The global energy network is partially social and economic, but it is mostly about the real, physical world. From the electrical outlets in your house to the pump on the factory floor and the grid that ties them all together, the energy network embeds information but also direct outcomes, like light, cooler air, and reliable electricity.

Understanding the network is critical because, unlike in the virtual world, in the real world throughput has high costs (think energy bills and air pollution).  When a company like NewsCorp reduces its energy use, its network grows stronger but its costs go down. When companies like Walmart or countries like Australia and the United States drive efficiency across large swaths of their stakeholders, they're making a critical investment in a more efficient, more secure, and more sustainable future.

In one bold step, Abu Dhabi shifted their energy strategy to information. More than anything else, this highlights the extraordinary opportunities made possible by bridging the energy/information gap. And from smart meters at home to enterprise energy dashboards at the world's largest organizations, the potential embedded in the world's biggest network is just starting to emerge.

Image CC licensed by Ian Muttoo.