Academic journal article Management Quarterly

A Cautionary Tale: Nanotechnology and the Changing Face of the Electric Utility Industry

Academic journal article Management Quarterly

A Cautionary Tale: Nanotechnology and the Changing Face of the Electric Utility Industry

Article excerpt

In 1968, Swiss watch manufacturers controlled 80 percent of the world market in high quality watches. By 1973, their market share had plummeted to less than 25 percent and they were forced to lay off 50,000 watchmakers. The reason for the sudden reversal of fortune was quartz technology-a new, disruptive technology which ushered in an era of cheap, reliable electronic watches.

The story serves as a poignant reminder of the power of technological change. It is very relevant to the electric utility industry because nanotechnology--a new emerging set of technologies--has the potential to revolutionize the electric utility industry in much the same fashion as quartz technology changed the "timepiece" industry.

Nano What?

Before exploring some of the specifics of how nanotechnology will transform the electric industry, it is helpful to first define the term. There are two widely used definitions. In the broadest sense, nanotechnology is the precise control of matter at the atomic and molecular level to make new and better materials, products, and devices. A practical application of this is demonstrated with a simple example. Consider a lump of coal and a diamond. Both are made from the same material--carbon atoms--but how their atoms are arranged differs and matters greatly. One is a common source of energy, while the other is suitable for an engagement ring.

Nanotechnology has advanced to the stage where there are now a number of nanotechnology companies that have perfected the ability to manipulate carbon atoms and are manufacturing 2-carat diamonds, which are molecularly identical to natural diamonds, for less than $100 a stone. The significance of this advance is this: if a material as expensive and rare as a diamond can be turned into a "commodity," then the applications of a variety of other materials, including everything from copper and ceramics to steel, can also be improved and utilized in different ways. In practical terms, this suggests that many of the equipment parts and components used in the electric utility industry can be modified to yield incremental improvements in product performance. For instance, high-temperature and sulfur-tolerant nanomaterials can be manufactured to withstand the harsh conditions of coal-fired plants; or nanoscale ceramics coatings can be employed to protect steel, nickel and other metallic components from corrosion. The end benefit is that electric utility providers can improve their operating margins by making existing equipment both last longer and operate at higher levels of efficiency.

This, however, is just the tip of the proverbial iceberg. Nanotechnology's greater value is revealed in the second definition which describes its incredibly small size; materials and devices measuring less than 100 nanometers are regarded as nanotechnology. The prefix "nano" is derived from the Greek term for "dwarf" and represents one-billionth of a meter. To put this in perspective, it is useful to consider the following analogy: if every character in the Encyclopaedia Britannica were 10 nanometers in width, the entire 30,000 page document could be replicated in the period at the end of this sentence.

This "smallness" is important because once materials are reduced in size to less than 100 nanometers, the realm of quantum physics takes over and materials begin to demonstrate entirely new properties. For instance, nanoscale materials are stronger, lighter, or have enhanced magnetic, optical, conductive or catalytic properties. The exploitation of these unique properties have a host of real world applications for the electric utility industry--not to mention virtually every other major industrial sector.

The Near Term Forecast: Cheaper and Cleaner

It has been said that "the more things change, the more they stay the same." This is particularly true in the electric utility industry. …

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