Distributed Generation : System right sizing approach

For many decades the power grid has been an integral part of the human society. Large scale power plants feed the power to the centralized grid, which is connected to distribution sub-stations which in-turn supply power to residential areas, offices and factories. Coal, natural gas, hydro and nuclear power plants with 1,000 MW to 16,000 MW are installed far away from the actual load location. The total power generation capacity in the world is listed as follows.

Source of Electricity (World total year 2008)

-	Coal	Oil	Natural Gas	Nuclear	Hydro	other	Total
Average electric power (TWh/year)	8,263	1,111	4,301	2,731	3,288	568	20,261
Average electric power (GW)	942.6	126.7	490.7	311.6	375.1	64.8	2311.4
Proportion	41%	5%	21%	13%	16%	3%	100%

Data source IEA/OECD (Table source http://en.wikipedia.org/wiki/Electricity_generation) 

From the table it is clear that although renewable energy sources such as Solar PV and wind are deployed on a large scale, it still constitute less than 5% of world energy production. With projected increasing demand, it will be extremely difficult to meet green-house-gas reduction targets. 

The current system of large scale power plants and grid works best when the gap between demand and supply is very small and the fluctuations in the grid can be managed by operating small feeder power plants. But now the difference between peak power and average power load has increased significantly. This poses a significant challenge for power generation and transmission. For example if the average demand is 600 MW for a city and peak demand is 1000 MW then power generation and transmission infrastructure has to be designed or upgraded to handle 1000 MW. But this same infrastructure will perform less efficiently at 600 MW. The machinery in the power plants are designed to operate efficiently at one power output level, any increase or decrease in these output levels will reduce the efficiency. Demand higher than planned capacity can reduce the life of these instruments or even cause a failure, demand lower than planned capacity will reduce the efficiency which will cause increase in cost per kWh and green-house-gas emissions. 

This situation poses a challenge for grid planning, but every challenge creates an opportunity. Combination of distributed generation and stationary storage provides a great opportunity. I created a simple block diagram to explain the system overview. This is a simplified version of the actual system which is implemented in smart grid projects. 

Using combination of renewable energy, energy storage and small scale locale generation can help fill the gap between peak demand and normal demand. The graph below shows the daily power consumption for the one week period. The difference between peak demand and non-peak demand is large. The difference will keep on growing as more and more people move to cities and follow common energy consumption pattern.

Energy Demand during one week (X axis represents time and Y axis represents kW)

This creates an opportunity to deploy distributed on-site generation to compensate for the peak power consumption. This can be done using hybrid system of stationary storage and Solar PV systems. This system right sizing approach will help in improving overall grid efficiency and stability. The cost of electricity from renewable energy or stationary battery storage systems is currently higher than grid power. But this cost difference is reducing rapidly and renewable energy technologies will achieve grid parity in the near future. By integrating renewable energy, stationary storage facilities and micro-turbine based power generation we can help stabilize the grid far better and allow grid to perform more efficiently. 
Ultimately achieving lower cost of electricity using combination of grid power, renewable energy, energy saving instruments and energy storage makes good business case. 


Signing off
Nikhil

Microsoft: May be time to launch a "Workbook" has arrived

When I look at the current technology market, I see huge gains in sales number of smart phones, tablets and phablets (phones with more than 5" screens). But at the same time market for traditional laptops and desktops is shrinking . Microsoft is trying its best to improve these sales by releasing Windows 8 and Surface line of Ultrabooks. Many OEMs are coming with tablet and notebook hybrids, HP envy X2 and Dell XPS 12 are some examples of such devices. But still these laptops are not flying off the shelves and people are still buying tablets from Apple, Samsung and Google. 

Microsoft has a strong portfolio of software products. Office 2013 is one solid productivity software which will perform well. Integration with Office 365 is a really good move by Microsoft and it will surely help Microsoft to sell many consumer and enterprise licenses. But still in the long run alternatives will pose a challenge to dominance of Office suit of software. Microsoft has to maintain its lead in this category as it lags in mobile and tablet market. 

Now as a marketing student, I thought about different strategies that Microsoft can implement to take advantage of its core products and improve the market share in mobile platforms. I tried to list down few challenges Microsoft is facing. 

Cloud technology: Cloud technology has improved significantly over past couple of years and servers are getting more powerful and can easily handle large applications. Business software makers such as "Salesforce.com" and "SAP" offer complete product portfolios from the cloud. Microsoft has not addressed this advancement in technology in Windows 8. Windows 8 still works on the platform which is based on Windows 7. They have done tweaks to improve the performance on tablets but integration with cloud is still limited. 

Multiple devices: Now-a-days people are carrying three or even four devices at a time. Smartphone, tablet and laptop are used for different purposes. Sometimes people carry two different sized tablets for different needs. Microsoft has to create software packages that address this need. One software fit all approach won't work.

Rise of Chromebook: Apple's Macbooks are never a threat to Microsoft's business because Macbooks are expensive and cater to a narrow target market. But Google's Chromebooks are direct threat to Windows 8. Google Apps for business still lacks a lot of capability but the gap is closing very quickly and Microsoft has to quickly address this. Though Chromebook is based on cloud based OS, Google is improving its offline capabilities and within few years Chrome OS will be a big competitor for entry level laptop market.

My Opinion. 

Now after looking at these challenges, I thought about how Microsoft can improve its sales in tablet and laptop market again. I came up with two approaches that can be used. 

1. Use Surface as Nexus line: There is nothing wrong in learning from your competitor. Google used Nexus line of products to demonstrate the desired user experience on Android devices. OEMs used it as a benchmark and developed phones and tablets that came close to those benchmarks. Speed of Android adoption improved rapidly and OEMs benefited by collaborating with Google. Samsung is now challenging Apple using Google's Android operating system. Samsung learned a lot by collaborating with Google on Nexus smart phones. Microsoft is a software company with similar model. Google borrowed OEM model from Microsoft and now its Microsoft's turn to learn from Google. Making Surface line of products as a benchmark Nexus line gives two great advantages to Microsoft.

• It removes the possibility of Microsoft competing with its own OEMs. OEMs will stop finding alternatives to Windows as they will not see surface products as threat but will rather see them as benchmarks. 
• It will reduce the pressure of sales. Though Surface Pro is a good product, it is entering already declining and crowded market. Removing pressure to deliver sales will help design engineers to test the uncharted waters and come up with breakthrough innovation. 

2. Ride the tablet wave: Now there are more than 80 million iPads sold. Many of these iPads are used in business application. But these devices are not good for content creation. You can do picture and movie editing but capabilities like word, excel and powerpoint are missing. So there is a great market opening for companion device. Chromebooks are kinda filling that gap but not completely. Microsoft can easily fill that gap by launching a "Microsoft Workbook". "Workbook" will be a companion device that will have a price point of $175 to $225. Workbook will have "Office 2013, Internet explorer and Skype" Nothing else. It will have a basic architecture of Windows but will have components essential to run Office, Skype and Internet Explorer. So when consumer boots up the device he will see tiles with only these programs. People will love such device, it will fill a big gap in their digital need. It will also counter the surge of Chromebooks. This will also help Microsoft separate profitable Office franchisee from Windows franchisee.  

Technology changes very rapidly so in the future there may be new innovations that may make these suggestions irrelevant, but as of today I think these two options will be worth consideration. 

Signing off

Nikhil