Now, a number of recent research reports and presentations have added impetus to the microgrid trend by addressing various aspects of the business case: the economics of microgrid deployment, the pace of development, the societal value of conversion, and the cost of inaction. We’ve summarized some of the most interesting below, beginning with the “big picture” of current grid costs and potential, and then moving on to microgrids’ role and value.

Economic benefit of Smart Grid efficiencies by 2030: $2 trillion

Estimated cost: $338 billion. Courtesy of George Arnold, national coordinator for smart grid interoperability at the National Institute for Standards and Technology. Given the role that microgrids can and will play as enabling infrastructure for many of the most valuable aspects of the smart grid revolution, we can can assign some meaningful portion of this projected $2 trillion efficiency to them, going forward.

Source: SmartGridNews.com

Current losses due to power outages: $80 billion annually

“Currently we experience outages that in a slow year cause about $80 billion a year in economic losses, and that doesn’t include infrastructure destruction. All in all, the benefits of reduced outages and increased efficiency amounts to [a smart grid savings of] $70 billion per year.” Hurricane Sandy raised the profile of microgrids (and other grid improvements) substantially, including the dissemination of statistics like this. There will be more storms, and a growing appreciation of the value of modernizing the grid.

Source: IEEE

Microgrid Deployment Revenue 2020 Forecast: $40 billion

Average projection scenario, up from $8.3 billion in 2013. North America holds the majority of current and projected market share. If Navigant is right about this, microgrids represent a fast-growing segment in which big money can be made at the level of deployments and vendors (operations are another question, to be examined at a later date). MSL is a pre-competitive consortium, that aims to increase the competitiveness of all vendors and participants in this sector.

Source: Navigant Research

Worldwide Microgrid capacity under development: 3.2 gigawatts

As of 4Q 2012. This represents ~12.5% of 2012 installed wind capacity, and is up from 2.6 GW in 2Q 2012. Total numbers of new project entries was 67, representing an increase of 571 MW or an 22% increase in identified capacity within a 6 month period. Again, this shows an impressive growth curve, which supports the Navigant revenue forecast.

Source: Pike Research

Includes efficiency products and equipment for the electricity grid; accounted for 38% of VC/PE 2012 funding for clean energy, up from 15 percent in 2008. In comparison, solar investments were $1.58 billion last year. This is a fascinating leading indicator: evidently, risk capital can no longer find the returns it needs from the rapidly maturing renewables generation sector, and is turning its focus to network efficiencies and intelligence.

Source: Bloomberg

Utility 2012 spending on Smart Grid capabilities: $23.68 billion

Represents 48% of Smart Grid spending to date. During the year, spending on transmission and distribution capabilities surpassed smart meter investments as utilities increasingly looked to improve their core networks. Another intriguing indicator: with the low-hanging fruit of smart meters becoming saturated, progressive utilities are now investing in other (potentially more significant) aspects of modernizing the network, and in a big way.

Source: BusinessWire

All in all, we think this starts to paint a compelling economic picture that can attract the required level of R&D and investment capital to move things forward. And not a moment too soon.

On a related note, both Santa Fe County and City have passed resolutions in support of the Lab. And Los Alamos National Security, manager of Los Alamos National Laboratory, will provide seed funding for MSL’s development (through LANS’ support of our partner Santa Fe Community College’s Sustainable Technologies Center).

The Santa Fe New Mexican published an analysis of the bill on its technology blog, and Randy Grissom of Santa Fe Community College (a project partner) was interviewed on KFSR. We expect to make some important announcements soon about key industry partners and other international-level support and engagement, so stay tuned…

SFIP is pleased to lead the renewable energy component of Santa Fe’s RE:MIKE initiative, under its Microgrid Innovation Lab. This initiative, which is designed to catalyze the revitalization of a “Central Santa Fe” district, kicks off with “a participatory festival-style public event on September 21, 22 & 23: A pop-up previtalization of Central Santa Fe.” The RE:ENERGIZE component will feature pop-up renewable generation and infrastructure; an “Energy Village” with displays, electric vehicles, and passive efficiency techniques; a Smart Home demo; and an exploration of what a future “neighborhood energy network” might look like. A fuller description from the initiative’s website follows:

“RE:MIKE is a celebration of the past, present and future of Santa Fe’s St. Michael’s Drive, its extended corridor and the surrounding neighborhoods.

It’s a partnership led by The City of Santa Fe, MIX Santa Fe, The Chamber of Commerce, The Santa Fe Art Institute, The Story of Place Institute and a host of public and private collaborators. The process is to recognize the history of the area, identify its assets, determine what’s missing and reveal the potential.

The process will lead to short-, mid- and long-term outcome projects. These outcome projects will be identified by community buy-in, attainability, responsible financing and phasing, return-on-investment potential and impact on quality of life. Additional outcomes will include form-based code recommendations for the implementation of a zoning overlay, input into best practices for legal guidelines around temporary and pop-up projects and establishments and a full report on the process, engagement levels and data collected.

A final outcome should be a recognizable sense of identity for this important area of central Santa Fe. This identity will congeal from key historic factors and characteristics that correspond to core residential and business values along with creative, entrepreneurial and innovative potential.”

The RE:ENERGIZE team includes SFIP Board Member Alexi Dzurec, of Autotroph Design; Santa Fe Community College’s Sustainable Technologies Center (our partner on the Microgrid Lab); Santa Fe’s Positive Energy; and other community energy leaders. We commend RE:MIKE’s organizers for recognizing the importance of energy infrastructure to this effort, and look forward to engaging with the community on its vision and design. As with all SFIP projects, we also anticipate that the RE:MIKE initiative, and the RE:ENERGIZE component, will have relevance for other communities elsewhere, thereby maximizing its effectiveness.

Let’s start with the magnificent Marina Warner, one of our most profound scholars of and thinkers in the realms of magic, myth, and mystery. In her new book, “Stranger Magic: Charmed States and the Arabian Nights,” she offers the following observations (emphasis added):

“Magic is not simply a matter of the occult or the esoteric, of astrology, Wicca and Satanism; it follows processes inherent to human consciousness and connected to constructive and imaginative thought. The faculties of imagination — dream, projection, fantasy — are bound up with the faculties of reasoning and essential to making the leap beyond the known into the unknown. At one pole (myth), magic is associated with poetic truth, at another (the history of science) with inquiry and speculation. It was bound up with understanding physical forces in nature and led to technical ingenuity and discoveries. Magical thinking structures the processes of imagination, and imagining something can and sometimes must precede the fact or the act; it has shaped many features of Western civilization. But its influence has been constantly disavowed since the Enlightenment, and consequently misunderstood.”

In other words, the synthesis SFIP and many others seek between imaginative and scientific modes of problem solving actually have deep origins, extending far back in time. The split between superstition and science was one of the most momentous schisms in intellectual history, but indeed both derived from a common ancestor: our profound need and desire to understand the causes of observed phenomena, and to try to influence them to our benefit.

On that note, we turn to a recent and insightful post on the FastCo.Create blog by Jim Hannas. He talks about the shifts that have occurred, and recently accelerated, in the respective roles of technologists and artists, and concludes with this provocative thesis:

“I think the artist, even more than government, has become the one who is doing long-term thinking about what’s happening, what are the implications, what are we doing to ourselves? And they’re some of the only ones, really. An artist’s job is to sit outside what’s happening and reflect back to us where the human is in this. I think it’s a very valuable exercise. It’s just the opposite exercise of what most people probably think it is. It’s not for technologists to realize the visions of artists. It feels much more like it’s for artists to contextualize the visions of technologists.”

And so we move forward into the realm of collaborative trans-disciplinary problem solving, and artist-driven innovation. Stand by…

Energy is central to nearly every major challenge, and opportunity the world faces today. Be it jobs, security, climate change, food production or increasing incomes, access to sustainable energy for all is essential for strengthening economies, protecting ecosystems and achieving equity. 

In fact, more than 1.4 billion people worldwide have no access to electricity, and 1 billion more only have intermittent access. Some 2.5 billion people – almost half of humanity – rely on traditional biomass for cooking and heating.

United Nations Secretary-General Ban Ki-moon made sustainable energy one of his five priorities that will guide his second 5-year term. Universal access to energy, improved efficiency and enhanced deployment of renewable sources are ambitious goals, and the Secretary-General is leading a Sustainable Energy for All initiative to make them achievable. The goal is to meet three objectives by 2030:

• Ensuring universal access to modern energy services.
• Doubling the rate of improvement in energy efficiency.
• Doubling the share of renewable energy in the global energy mix.

In recognition of the importance of energy access for sustainable economic development, the United Nations General Assembly has designated 2012 as the International Year of Sustainable Energy for All.

SFIP looks forward to supporting the MicroGrid Work Group of the U.N. Foundation’s Practitioner Network, and the Sustainable Energy for All initiative. The MicgroGrid program, which is already being assisted by the U.S. Dept. of Energy, is designed to deploy functioning microgrids at a rapid rate throughout the developing world. As such, it represents a perfect “proof-of-concept” for many of SFIP’s key methods, especially the development of community-scale solutions that can be diffused and scaled for global impact on systemic challenges. We can’t think of a better way to start 2012.

Happy New Year!

So we’re especially pleased to announce our first artist-driven innovation project, We the People, in collaboration with Santa Fe artist Sydney Cooper and leading Santa Fe design studio Anagram. Click through to the Project Description to learn more, and join the project crowd-funding effort on United States Artists.

“Jugaad is a remote sibling of the Western-style hacking, the manipulation of existing products and services, and with the Chinese Shanzhai phenomenon (innovation through fast imitation) it has in common the utter disrespect for any kind of brand or management ideology. Adaptation, improvisation, rapid experimentation, fast failing, a high tolerance for ambiguity, super-flexibility… together these principles are perhaps marking the beginning of a new era of doing business, a new economy.”

It’s enough to make you think that innovation is a case of emergent behavior in a complex system (which to some extent it is), beyond influence. But I would also argue that there is room for adding structure, context, and what I’ll call method (as opposed to a process) to accelerate and diffuse innovation. As one example, SFIP’s method, based on its overall problem-solving approach, features five main themes:

1. Pick the right problem
2. Engage the implementors
3. Invite multiple perspectives
4. Provide the best environment
5. Experiment radically and recursively

In practice, these work roughly as follows:

Wrong Problem/Bad Solution: Altogether too often, organizations or stakeholders fail to identify the actual or underlying systemic problem at hand, and instead wind up addressing symptomatic or proximate issues. The SFIP method begins with a deep and robust re-examination of the nature of the problem, featuring a whole systems approach.

Stakeholders as Participants: The “client,” or the entity experiencing a given problem, becomes an active participant, working with SFIP and the collaborative team. This should include end-users in a user-centered design process. Implementation is part of the deliverable, and implementors are part of the team.

Diversity Trumps Ability: Scott Page, Ph.D. (External Faculty member at the Santa Fe Institute) has formally proven that in the type of problems SFIP will address, there is greater value to having a diverse set of problem solving perspectives and heuristics, than homogenous depth of expertise. This is also known as “two heads are better than one.”

Skunkworks Work: There is abundant evidence to support the idea that when truly new thinking is needed, a new environment, context, and organizational values are required. SFIP offers a conceptual “safe haven” for participants to abandon legacy assumptions and organizational cultures, and to truly “think different” about the problem at hand.

Obvious Connections/Unexpected Combinations: Given the nature of our problems in such areas as energy, climate, education, health, water resources, sustainable development, and biodiversity, it’s obvious that industry, policy, and science must be brought into closer collaboration; the role of art, design, and creative processes may be somewhat less obvious, but in the words of Albert Einstein, “Imagination is more important than knowledge.” SFIP promotes unexpected interactions across all these sectors, thus favoring serendipity.

Fail Early and Often: SFIP uses rapid virtual and physical prototyping, and advanced simulation, visualization, and modeling (a Santa Fe-area specialty). This allows collaborators to experiment broadly, wildly, and frequently, permitting the generation of many more potentially interesting ideas, their full evaluation, and reiterative and recursive feedback loops for improvement.

I wouldn’t be a bit surprised to see many of these concepts “emerging” out of Jugaad, and other spontaneous approaches. Let’s all do our part to make the world safe – and even supportive — for wrong-headed innovators, everywhere. We have nothing to lose but our silos.

The Problem with Problems

We all know that local, national, and global communities face critical challenges in areas such as energy and climate, healthcare, public education, environmental degradation, and sustainable economic development. But despite the massive resources we devote to these problems, in many ways things are getting worse instead of better.

A new approach is needed, one that moves us from incremental tweaks to systemic transformation, and scales to address the global challenges of our time.

The Solution to Solutions

The SFIP 3.0 strategy represents a new approach. As an R&D lab for social systems solutions, SFIP is designed to accelerate transformative innovation and impact:

We bring together multiple disciplines and stakeholders, ranging from science and technology to art, design, and the humanities, with the public, private, and social sectors, in a collaborative framework.

We work on systemic challenges involving multiple vectors and perspectives.

We design, prototype, and test solutions through our internal R&D laboratory process, and through ongoing deployment on the ground.

The new SFIP is fully project-focused, with minimal overhead, and an emphasis on action and results.

Santa Fe Is the Park

One of the big changes we’ve made is a shift from fixed physical facilities and environments to a more virtual, project-based structure. Building on that concept, in many ways the City of Santa Fe is the Innovation Park. Santa Fe is home to an outstanding range of leading institutions and individuals, set within a world-famous creative context. SFIP draws on these resources, acting as a catalyst and integrator, bringing together project partners and teams from our core community and beyond.

Local assets range from the Santa Fe Institute to the Museums of New Mexico; from the State Capitol to Santa Fe Complex; and from Santa Fe University of Art & Design to the neighboring University of New Mexico and Los Alamos and Sandia National Laboratories. The City’s abundant resources, cultural ferment, and beauty are complemented by its draw as a top visitor destination.

Looking Ahead

We’re excited by the prospects for our new strategy, motivated by the challenges that confront us, and eager to work with our partners and other participants to make a difference.  Please join us, and let us know your thoughts.

From STEM to STEAM

I’m a sucker for any event promising an interdisciplinary experience and an opportunity to dive into the unknown between silos.  I was fortunate to attend, Make it Better, a recent symposium at the Rhode Island School of Design (RISD) on art, design, and the future of healthcare. It delivered. I was reminded of the old Reese’s Peanut Butter Cup commercials. You got your art in my science!  No, You got your science in my art!  Art and science, two great tastes that taste good together. It amazes me in today’s always on and connected world we still have to be nudged, or for many, blasted out of our silos to experience the magic of interdisciplinary thinking and doing. The timing couldn’t have been better for a participative conversation about combining art, design, and healthcare.  There is growing recognition that our US health care system is unsustainable. The imperative is to transform from our current “sick care” system to a “well care” system. We need to go from an institution-centered approach to a human-centered approach. We need to go from tweaks to transformation. Art and design can be key enablers for transforming health care.

John Maeda, RISD’s President, always makes me think about the importance of art and design in our lives and to the innovation process.  In his BIF-6 Collaborative Innovation Summit story‘ last September John asserted that unleashing the innovation potential of the 21^st century will require adding an “A” for art to STEM (science, technology, engineering, and math) turning it into STEAM.  Maeda suggests we need IDEA (intuition, design, emotion, and art) based thinking to make progress on the big system challenges we face including, education, health care, energy, and entrepreneurship.  I agree with Maeda and have been thinking about the IDEA of going from STEM to STEAM since his talk.  It wasn’t until I hung out at the Make It Better symposium that the real importance of moving to STEAM hit me.

It isn’t just about making sure art and design are included as part of the equation.  Art and design must be fully integrated into the equation. We can’t unleash the full power of innovation without them.  We won’t find the gold in the gray areas between silos without the integrative lens of design thinking and process.  We won’t transform our social systems without the tools of human-centered design and iterative exploration employed by designers.  We won’t enable the visceral human connections and deep engagement we need to change the world without the powerful creativity and immersive potential of art.  Art and design aren’t luxuries we get to enjoy once other more basic needs are taken care of.  Art and design are essential and must be integrated into the basic human tool kit.

Artists and designers love to force us into the gray area between disciplines and often start by reframing the questions we carry around in our heads. Making It Better was a reframing orgy. Damon Rich, Founder of The Center for Urban Pedagogy, shared his experience in designing platforms for citizen engagement.  Damon challenged us, Instead of thinking about how to improve public health, how do we make health public? Alexandra Drane, Founder and President of Eliza, asserted, It’s not a health care information problem it’s an inspiration problem. Natalie Jeremijenko, Artist and Director, xDesign at NYU, reframes her environmental research initiatives as “clinical trials” and refers to her lab as an “environmental clinic”. Natalie challenged us to view health as environment and environment as health.

The best framing question of the symposium was asked by Raynard Kington, President of Grinnell College, What if art fails to pass those cleverly designed tests of significance?  What if the notion of evidence based art, or basing artistic and design decisions solely on available research evidence, prevents us from bringing art more fully into our lives? Kington suggests that a community’s social capital relies on art and is directly proportional to its health and wellness. He rightly proclaims that art defines us as humans and reminds us our lives are not defined by the failure of our bodies. We must commit to ongoing exploration of new health care solutions informed by art and design.

Reframing the question can force us to reach beyond our comfort zones to explore the adjacent possible. Art and design are essential enablers to transforming health care. We need to move from STEM to STEAM to unleash the innovation potential of the 21^st century. We need more art in our science and more science in our art.

But the devil of real tangible achievement will most certainly be in the details, which are worth looking at carefully. So let’s ask some challenging questions.

Is Collaboration the New Competition?

The notion of “winning” implies a competition, and with winners go losers, most often in a zero-sum-game. But if we are to follow Obama’s injunction that “the rules have changed” to its fullest conclusion, we must ask: is competition the best framework for a strategy going forward, or a relic of a pre-globalized era with few constraints on growth?

Alex Bogusky, named Agency Creative Director of the Decade for his brand work at Crispin Porter + Bogusky, opines that “collaboration is the new competition.”

The question is particularly important when those devilish details come into play. There is a real danger of following the competitive needs of large and powerful U.S. corporations (or even small and promising ventures) when crafting tactics along these lines. The interconnectedness of our globalized economy and the other physical and political systems on which we depend demand a more holistic approach. To paraphrase the old saying: “What’s good for General Electric is not necessarily good for the USA,” especially when GE is a multi-national with operations and revenues distributed around the planet. Should we be concerned that GE’s CEO, Jeff Imelt, was appointed chair of Obama’s new new Council on Jobs and Competitiveness four days prior to the speech? Hard to say, but worth thinking about.

Is “Innovation” the Best Approach?

While Obama did speak the magic words of “creativity and imagination,” they went by fast, and his substantive ideas tended toward the well-worn path of STEM education, federally funded basic scientific research, and technology-based commercialization and entrepreneurial drive. Make no mistake: all of these are essential. But they may not be nearly enough to achieve the future we seek. Once again, the rules are changing.

The great Alan Kay famously said: “The best way to predict the future is to invent it.” We need to extend that concept to a scale much larger than technologies, products, or services. Entire systems are ripe for re-invention, and these changes are well underway. Triple-bottom-line for-profit and social enterprise structures, multi-national alliances, non-state actors across domains, collective intelligence networks, and the build-out of a truly global interactive platform (via SMS services linked to the Internet), among other factors, will yield entirely new models for producing shared sustainable well-being. Let’s invent more of them here.

Is the Future Already Here?

That master futurist William Gibson said: “The future is already here — it’s just not very evenly distributed.” His point is that it takes a certain type of genius to recognize and appreciate what’s going on, to see the rules changing before they’ve changed. We have a name for such genius and the people who typically posses it: we call them artists. We need them now.

It’s been said that artists do the R&D for society. This is a type of R&D in critical demand and in short supply; it’s one which we, as a nation, could excel. What types of laboratories can accelerate this work? (We think SFIP is a good model, but we’re biased. Boguksy’s new “COMMON” platform is an examplar of reimagining what’s possible.) In his book “The Age of the Unthinkable,” Joshua Ramo quotes social theorist Roberto Unger as follows: “The task of imagination is to do the work of crisis without crisis.”

Which brings us back to “creativity and imagination,” alluded to in the President’s speech, but nowhere represented in his agenda. In a recent survey, the vast majority of corporate CEO’s rated “creativity” as the key competitive factor in their future. But do we think they know how to grow it, attract it, retain it, and use it?

For example, what if — instead of playing catch-up with Singapore on STEM — we build on our historic innovation advantage to develop a uniquely U.S. approach to problem solving and education? One oriented toward the future needs of a 21^st century world, demanding skills like teamwork, flexibility, and creative problem solving? That future is already here, in the form of the  “No Right Brain Left Behind” initiative. We’ll bet a lot of other futures are already here. Let’s figure out how to promote them as part of a national creative innovation agenda, and invent a future bounded only by our wildest imagination.