http://digitalpowerreport.com/powerart/PowerReport.pdf

Authors Huber and Mills, part of an investment fund group led by George Gilder's Powercosm.com, present a case for a new strategic investment paradigm in the Electron Age, wherein "Hundreds of billions of dollars per year are going to be invested in new technologies to move, condition, store, and distribute electrons for the Internet economy."

Their evidence is based on the needs of the microprocessor, which they call the SmartChip, which is increasingly ubiquitous in all aspects of the economy, and which requires a steady and clean power supply without spikes or jumps or shortages, which can cause damaged equipment and million dollar an hour losses in sales and production for businesses in the New Economy, based on the present electrical power supply.

The logic gates on a SmartChip work at one microwatt, they say, but they envision a new chip, the PowerChip, which would have not millions of gates but only one, meant for switching electrical power at the macro level of generation and distribution. This new chip would switch megawatts, and would be able to control the quality of electricity coursing through the veins of a business.

Business is the key word, as businesses are the target of this new chip. The public will continue to be served by the Three Nines of electrical power provided by the current grid. That is, 99.9% reliability. But New Economy businesses will require Six Nines to Ten Nines of reliability in their power supply. That equates to 99.9999% and 99.99999999% reliability. Instead of 8 hours/year of blackouts, businesses such as computer manufacturers, dot-coms, and semiconductor plants require power interruptions to be only microseconds a year, the authors state.

"Clean power, information-quality power, is becoming a sine qua non of the information economy and thus one of the greatest business opportunities of our time."

Instead of the more affordable Three Nines electrical power, Ten Nines could cost as much as $100,000/kilowatt hour and beyond, initially, until a mass market develops.

The authors outline three electrical technologies that will lead the way to this PowerChip and Ten Nines revolution. These will be: Clean Power Systems, Ride- Through Systems; and Stand-Alone Local Generators.

These three new technologies will be "practical only because of PowerChip. PowerChip is as central to the trans- formation of the power industry as the microchip was to the transformation of the computer industry."

The authors put forward two propositions:

"1. Solid-state devices will take over all power switching at all power levels and at all speeds... PowerChips will permeate the grid, from the central power station down to the motherboard.

2. As PowerChips proliferate, they will expose the entire generating system and service infrastructure of the conventional power industry to competition. A tidal wave of new storage and generating alternatives will respond to a huge reservoir of unmet demand for High Nines power. In so doing, they will thrust competition into the bowels of the industry, and transform it beyond recognition."

The authors believe that this change for increased quality in electrical power will eventually trickle down to the rest of consumers, by challenging and changing the slow-moving conventional power industry by increasing its competition for supply of high-quality reliable power.

Whether delivered by clean power generators, or backed up by high-quality Uninterruptable Power Supplies (UPS), the change will happen due to the drive for increased reliability for business electronics in the New Economy. Clean power here does not mean energy-efficient or pollution free, but high-quality and reliable supply. The solution to this problem of quality is now in the hands of businesses themselves, and therefore they will build a new, better electrical grid for their needs, piecemeal. Some New Economy businesses will have their own High Nines electrical generators, some will have UPS', and some power plants may be built solely for this PowerChip Paradigm.

The result: "As the number of local generators grows, installed originally to provide High Nines insurance to their owners, the architecture of the grid itself will begin to change. Rather than a series of virtually identical Three Nines [electrical] plugs, the grid will take on a lego- block architecture: with a variety of components highly adapted to different functions, yet also standardized and perfectly interconnectable, analogous to both the fragmentation and the interoperability of telecommunications networks. The forces of dispersion are by no means identical, but the main currents are the same: new interfaces, made possible by new switches and new `pipes', that permit competition to get established all around the periphery of the old monopoly network."

The authors believe that competition will inevitably lead from New Economy marketplaces having clean generators and mini- and micro- turbines as standard building equipment of Internet businesses, to Old Economy factories and business getting hit by the PowerChip tidal wave, and finally, consumers, wherein their apartments and residences will be upgraded to High Nines power reliability.

Not only will the PowerChip Paradigm make power for New Economy businesses, but the generation of clean power will become a commodity to be marketed back on the grid. Thereby, the PowerChip Paradigm promises to transform the highly centralized electrical power system of today, into a highly decentral- ized electrical power network of tomorrow.

It is next stated that the Internet will be tied-into half of the electrical power system by 2010. And thus, the needs of Internet businesses will begin to drive change in the power industry, when little else will.

Ultimately, the authors Huber and Mills make a bold promise for their New Power Paradigm: "Whether in telecom, computing, or the power industry it is new interfaces and interconnections that undermine monopolies and replace them with vibrantly competitive new marketplaces."

While these ideas sound realistic, in part, because of the fragility of the current electrical system and the economic losses to Internet businesses due to the errant electrical power supply during extreme weather, demand, and other factors such as terrorism and war, it still seems that the idea of the PowerChip Paradigm is economically based and thus biased in its assumption that this Electrical Grid version 2.0 will make it to consumers, in the end, and that the marketplace will compete and thus lower prices, which is exactly the opposite of what happened with electrical deregulation in San Diego, California in the summer of 2000, where open-market prices doubled and in some cases quadrupled, causing rate-payer rebellion.

The pragmatic envisioning of a new, de- centralized grid is exciting in many ways, yet there is no mention of the traditional and pressing problems facing power generation today: pollution, dwindling natural resources, energy inefficiency, high costs, and effects caused by these symptoms, such as global warming.

This is not to say that cogeneration or micro- turbines or flywheels are not a part of this solution. But, given the terminology of the authors, this is not posed as a social question, nor a question for governments, but for private industry becoming the new, unregulated electrical power industry, to whom someday our electricity may be purchased from. With no social, political, or environmental dimension to this New Power Paradigm, it seems that the future of the electrical power system will be determined by New Economists and their utopian visions of 99.99999999% reliability at whatever cost, everything else is secondary.

Any private paradigm for power, be it electrical or political, which has no need for a social dimension but instead is driven by free-market capitalists whom value profit above all else, is the danger in this exclusive thinking of the problems of the present and future electrical grid. What would make this `power report' more palatable is if it was inclusive of the complex social and environmental and political issues involved in changing, and possibly overtaking, the source of power which sustains our culture.

The public good, the power of government, and the freedoms of democracy are at stake when a New Power Paradigm proposes its impact in an idealistic vision of capitalistic economics, without regard to values outside of monetary profit. This private theory needs a public goal, beyond individual profit. Trickle-down economics have proven themselves mythical. It is time to make these private visions of the future of electrical power into public visions accountable to the common people, to common issues, and not limited to certain facts, nor without governmental accountability.

In sum, this PowerChip Paradigm is the old guard in a new guise. Institutional power, driven by private interests, is still the prime mover of the New Economy. Things are Ten Nines reliable that way.

If I were to invest, I'd bet on that 00.00000001% as a better solution to addressing the problems of our current electrical power fiasco. We need to change the order of things, not reinforce that which is denying and oppressing people for the sake of profits. The revolution of PowerChips will begin when the Power of the Chips will be the power of the public to determine its own fate.