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According to Google their intent is not to enter the utilities market, but to be able to more easily manage their goal of becoming a carbon neutral entity.

sophacles 17y ago
Right, thats why they have the google power meter stuff too. Having a large pile of statistical data, and realtime data, and a major statistical analysis engine AND the ability to buy low and sell high for power is not at all a massive money maker.
- sophacles 17y ago
  So I work in the power grid space, and talking to some collegues about this, turns out the behaviour in my speculation is actually VERY illegal. There are many regulations about keeping groups that handle these types of data and operations very separate. Otherwise it is essentially collusion.
  - dmix 17y ago
    I'm glad that was cleared up. Techcrunch was this | | close to writing an article based on you speculation.
    - sophacles 17y ago
      I hope that was a funny joke and not a sad truth... :)
  - DaniFong 17y ago
    Can you please elaborate? Are you really saying that it isn't legal to be able to use one's data on usage intelligently? Don't utilities need to -- and do this -- anyway? Is it true internationally?
    - sophacles 17y ago
      So my understanding is limited, and only applies to the US as far as i know, but it goes something like this: The power grid involves a few distinct parts -- generation, transmission, distribution. Distribution is the aspect most people ever deal with, its the "last mile" part. Generation is self explanitory, and transmission is the high voltage lines between the generators and the distribution. Some companies only do one aspect, some do 2 or all 3. The "deregulation" of the power market, was actually the creation a wholesale market of a commodity. This means that A generator operator in michigan can "sell" electricity to a utility in florida. In reality, the electrons never get transported that of course. The way the market works is -- Various generators place a bid on the market: x watts for y price/watt. An official, neutral party aggregates all the distribution loads, and does some fancy analysis, and puts out an official number -- how many watt of power the peak draw will be for that period. All bids are sorted, lowest price to highest price. Like this (very very fake nubmers): 5W $1/W 10W $2/W 3W $3/W In our example the peak draw is projected at 13W. Starting with the lowest bid and working up, the available power is used. in this case the first 2 bids. The highest bid under the line sets the price for power. So in this case power is sold at $2/W. This is the price for the whole market, it is what wholesale power costs to distribution companies for that period. The company that can provide 5W at $1/W makes a healthy profit. The expensive company doesnt make any money, their electricity is unused. The regulations keeping metering groups separate from the power market groups are there for market efficiency. First the generation only companies lose out. Second, if some companies had extra data, they could start playing with things, arranging for thier power bids to be raised/lowered in ways that are market inefficient. This enforces everyone to try to bid as low as possible to try to get their power sold at all. So to answer your question: no it sets up the stage for price gouging on the power market. the data is used intelligently for various long-term forecasting, efficency determinations, and for reporting to the markets, but the markets use the data intelligently for setting loads. Note, the data reported to the market by a utility is in effect statistical prediction, but the people who determine bid price for electricity never see this data. (people means algorithms here too). I'm pretty free-market, but these regulations make sense, in the same way that insider trading regulations make sense, and regulation against monopolistic competition. If it is not clear they are the same thing, it is more likely my explanation than the alternative.
abstractbill 17y ago
Actually, as interesting and exciting as it would definitely be to see Google in the utilities market, I think it's almost as interesting just that the people at Google feel strongly enough about carbon neutrality being a Good Thing that they are putting a really significant amount of time and money into achieving it.
coderdude 17y ago
I wonder if you can use that excuse for other purchases. Like buying a small country to more efficiently manage physical waste disposal, or something.
- Hoff 17y ago
  There is precedent. Becoming your own government entity (Reedy Creek) seems to have worked out for Disney. I for one welcome our new Google overlords.

sophacles 17y ago

Right, thats why they have the google power meter stuff too. Having a large pile of statistical data, and realtime data, and a major statistical analysis engine AND the ability to buy low and sell high for power is not at all a massive money maker.

sophacles 17y ago
So I work in the power grid space, and talking to some collegues about this, turns out the behaviour in my speculation is actually VERY illegal. There are many regulations about keeping groups that handle these types of data and operations very separate. Otherwise it is essentially collusion.
- dmix 17y ago
  I'm glad that was cleared up. Techcrunch was this | | close to writing an article based on you speculation.
  - sophacles 17y ago
    I hope that was a funny joke and not a sad truth... :)
- DaniFong 17y ago
  Can you please elaborate? Are you really saying that it isn't legal to be able to use one's data on usage intelligently? Don't utilities need to -- and do this -- anyway? Is it true internationally?
  - sophacles 17y ago
    So my understanding is limited, and only applies to the US as far as i know, but it goes something like this: The power grid involves a few distinct parts -- generation, transmission, distribution. Distribution is the aspect most people ever deal with, its the "last mile" part. Generation is self explanitory, and transmission is the high voltage lines between the generators and the distribution. Some companies only do one aspect, some do 2 or all 3. The "deregulation" of the power market, was actually the creation a wholesale market of a commodity. This means that A generator operator in michigan can "sell" electricity to a utility in florida. In reality, the electrons never get transported that of course. The way the market works is -- Various generators place a bid on the market: x watts for y price/watt. An official, neutral party aggregates all the distribution loads, and does some fancy analysis, and puts out an official number -- how many watt of power the peak draw will be for that period. All bids are sorted, lowest price to highest price. Like this (very very fake nubmers): 5W $1/W 10W $2/W 3W $3/W In our example the peak draw is projected at 13W. Starting with the lowest bid and working up, the available power is used. in this case the first 2 bids. The highest bid under the line sets the price for power. So in this case power is sold at $2/W. This is the price for the whole market, it is what wholesale power costs to distribution companies for that period. The company that can provide 5W at $1/W makes a healthy profit. The expensive company doesnt make any money, their electricity is unused. The regulations keeping metering groups separate from the power market groups are there for market efficiency. First the generation only companies lose out. Second, if some companies had extra data, they could start playing with things, arranging for thier power bids to be raised/lowered in ways that are market inefficient. This enforces everyone to try to bid as low as possible to try to get their power sold at all. So to answer your question: no it sets up the stage for price gouging on the power market. the data is used intelligently for various long-term forecasting, efficency determinations, and for reporting to the markets, but the markets use the data intelligently for setting loads. Note, the data reported to the market by a utility is in effect statistical prediction, but the people who determine bid price for electricity never see this data. (people means algorithms here too). I'm pretty free-market, but these regulations make sense, in the same way that insider trading regulations make sense, and regulation against monopolistic competition. If it is not clear they are the same thing, it is more likely my explanation than the alternative.

abstractbill 17y ago

Actually, as interesting and exciting as it would definitely be to see Google in the utilities market, I think it's almost as interesting just that the people at Google feel strongly enough about carbon neutrality being a Good Thing that they are putting a really significant amount of time and money into achieving it.

coderdude 17y ago

I wonder if you can use that excuse for other purchases. Like buying a small country to more efficiently manage physical waste disposal, or something.

Hoff 17y ago
There is precedent. Becoming your own government entity (Reedy Creek) seems to have worked out for Disney. I for one welcome our new Google overlords.