John Gerzema: Edison Was Right

Nextek promotes the efficient “organic power” of direct current in Detroit.

Paul Savage, Ceo: Nextek Power Systems Detroit, MI.

Two blocks off Detroit’s Woodward Avenue, inside an industrial building on Burroughs Street, a half-dozen engineers who work for Nextek Power Systems gather around a whiteboard where they have scrawled notes based on read-outs from a computer screen. They are analyzing data on the performance of an innovative power system based on Thomas Edison’s preferred form of electric supply—direct current. Also called DC, direct current is the juice that comes out of batteries, fuel cells, solar panels, and other sustainable energy sources. Because it is difficult and expensive to transmit over great distances, Edison’s DC lost out to alternating current—AC—when the electric age began. AC, promoted by George Westinghouse and Nikola Tesla, allowed for a single huge generating station to supply power for homes and businesses spread over hundreds if not thousands of square miles. To make use of this system, lights, appliances, and motors were all built to operate on AC, and it became the standard.

But the advantages inherent in this system came with some vulnerability. The huge and complex network can be brought down by an isolated incident—even a squirrel chewing through a wire—and big power plants are hugely expensive to build. Also, as much as half the power produced by generating stations is lost as electricity is sent to distant consumers.

As long as fuel prices were low and the grid didn’t get overloaded with demand, the AC system worked well enough. Today, demand for power often surpasses the capacity of the big grid and fluctuating fuel prices make it expensive. Add the problem of global warming caused by the burning of fossil fuels, and you’ve got three big reasons to seek more efficient, renewable energy systems. Nextek Power Systems staff see how DC can be applied to solve these challenges. DC power generated close to where it will be used is almost 100 percent efficient. When the sun or the wind produces it, the fuel cost and carbon emissions are both zero.

Think of it as “organic power or organic electricity,” says Nextek CEO Paul Savage. By organic, Savage means the electricity is made close to where it’s used and is not processed in a way that reduces its power. “You naturally become more efficient,” he says, when you see the entire infrastructure for electricity sitting on your roof. Over Paul’s shoulder, a sign above the whiteboard proclaims the company’s motto: “Edison was Right.”

In the past, DC entrepreneurs couldn’t take advantage of their superior efficiency because almost everything that used electric power was made to run on AC. Nextek is solving this problem in two ways. First, its systems can work with both types of current. Second, the firm is partnering with firms like Philips, which makes lighting and other equipment. Savage’s biggest breakthrough so far has been with Armstrong, which makes a billion ceiling tiles per year. The company’s ceiling systems are installed on metal racks. These racks can actually transmit power to lights that operate at low voltage. One big selling point for such a system, besides its efficiency, is safety. “The number one killer of electricians is working on lighting systems,” notes Savage, adding, “This is lower current than what recharges your tooth brush.”

As he conducts a tour of his lab and engineering shop, Savage speaks with the enthusiasm of an evangelist—and he has made converts of more than a few utility companies and industrial firms. More than a hundred corporations have agreed to participate in a Nextek pilot program to create a small DC power grid serving a one-square-mile section of Detroit, he reports. When completed, it will be the biggest DC network constructed since Edison’s time. Just as important, it will put Detroit at the center of a potential revolution in electricity and the so-called green technology that is supposed to produce the jobs of the future. This development thrills Savage’s wife and partner, Fay.

A native of the region, Fay Savage comes from a family that goes back four generations in Detroit, but she’s not interested in resurrecting the industrial city of old. Instead she imagines a new community powered by imagination and creativity, which is less dependent on a few dominant industries.

“In Detroit the big systems failed,” says Fay. By big systems, she means the auto industry, government, unions, and other institutions that failed to adapt. But in the wake of their failure, she adds, some “people see this place can be a great city but for new reasons. There’s an opportunity here to re-imagine and re-envision things.” Detroit is the best place in America for anyone interested in bold ideas, she argues. Where else could you build a solar-powered DC system to supply energy at the lowest possible cost to an entire neighborhood? Where else would such an experiment even be possible?

Nextek is one of fifty companies interviewed for the Wall Street Journal best-seller: Spend Shift: How the Post-Crisis Values Revolution is Changing the Way We Buy, Sell and Live.

John Gerzema (@johngerzema/twitter) is president of Brandasset Consulting and Young & Rubicam’s Brandasset Valuator, the world’s largest database of consumer behavior, attitudes and values. Michael d’antonio is a Pulitzer-Prize winning journalist, author and reporter

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