It is that time of the month again. For our third ever award of the ATOM AotM, we return to an article I wrote over 10 years ago about the lighting revolution. At that time, when the disruption was still in the future, I highlighted how the humble status of the light fixture leads to an associated disruption going widely unnoticed. That continues to be true even today, despite the important product transition that most people have already undertaken.
So the ATOM AotM award for March 2017 goes to the LED lightbulb. Something that most people do not even notice is a major engine of the ATOM, as it has introduced rapid price/performance improvements into what used to be a stagnant product.
Charge of the Light Brigade : Remember that the average household has about 25 light bulbs on average. From the chart, we can see that light output per until of energy and cost per watt of LED lighting are both improving rapidly, leading to a double-exponential effect. Lighting is hence now fully in the path of the ATOM and is seeing progress at a rate entirely beyond what the predecessor technology could have have experienced, and is indeed one of the fastest technology shifts ever (see the second chart). Bulbs are now purchased in packs of 4-12 units, rather than the single-unit purchases of the recent past. The expected electricity savings worldwide are estimated to be over $100 Billion per year in the near future.
- LED bulbs are reducing the electricity consumed by lighting.
- This reduction in demand more than accommodates the proliferation of electric cars. The first 100 million electric cars worldwide (a level we are still extremely far from) will merely offset the loss of electricity demand for lighting.
- The spread of electric cars with no net rise in electricity consumption nonetheless reduces oil consumption and hence oil imports. The US already has a trade surplus with OPEC, for the first time in half a century, and this force is strengthening further. Even if the price per barrel of oil had not fallen through fracking, the number of imported barrels still would have plunged.
- So even though most lighting is not fueled by oil, it created a puncture point through which a second-degree blow to oil demand arose.
That is truly amazing, making LED lighting not just a component of the ATOM but one of the largest disruptions currently underway.
That concludes this month's ATOM AotM. I need more reader submissions to ensure we have a good award each month.