Thursday, May 31, 2012

Getting the (electric) cart before the horse

Solving a host of engineering puzzles will require policy makers to consider the bigger picture.  An investment in A might also need a concurrent investment in B.  Or underinvesting in B has potential damaging consequences for the investment in A.  Or maybe investment B needs to be completed to fully recognize the benefits of investment A.  Remembering that the investment is the system - - A+B - - that seems to be a problem in many complex systems. 

Ron Adner of Dartmouth's Tuck School of Business makes this very clear in the May 30, 2012 issue of the Wall Street Journal - - Solving the Electric Car Puzzle:

" . . . while intense public attention and investment have been focused on rolling out plug-in charge spots, these efforts have been decoupled from investment in the smart-grid technology needed to assure that power generation and distribution can actually support mass charging.  As long as only a handful of drivers plug in each morning, the current grid will hold.  But if 5% of cars in Los Angeles County were to plug in simultaneously, they could place a 750-megawatt load on California's already strained grid, equivalent to the generating capacity of two mid-size power plants.  Unless the power infrastructure challenge is addressed in advance, the very success of the electric car will drive its failure."

It's all about understanding the system - - how you define the system and where you draw the system boundaries.  Defining the system as "the electric car" ignores the broader technology requirements and infrastructure necessary for the electric car to be an effective transportation alternative.

Great observation in the article - - success can drive failure.

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