A Free-Market Energy Blog

Thomas Edison: John Kerry Gets It Wrong (speechwriter fantasy?)

By Robert Bradley Jr. -- April 11, 2016

“Citing the iconic U.S. inventor and businessman Thomas Edison, who is credited for building the first modern power station on lower Manhattan’s Pearl Street in 1892, [Secretary of State John] Kerry said Edison would view today’s deployment of clean energy technology as evidence that ‘an energy revolution that he dreamt about is actually underway’.”

Daniel Cusick, “Kerry Decries ‘Politics, Sheer Politics’ of Climate Denial,” ClimateWire, 

John Kerry probably has a speechwriter. And that speechwriter is no doubt trying to come up with some new angle to make an energy/climate point for the boss.

But if Kerry thinks that Edison was dreaming about wind and solar to generate (intermittent) electricity, I would at least like to know about the source. The dreaming might have been speechwriter/Kerry for Thomas Edison, not Thomas Edison for speechwriter/Kerry.

‘Jumbos’ for ‘Isolated Plants’

When it came to the business model for electricity, Thomas Edison was all about central-station power (‘jumbos’ or ‘dynamos’) replacing distributed generation (‘isolated plants’). Mass production for mass consumption to make a luxury into a necessity….

Grid electricity is based on scale economies. Has been and still is where consumers voluntarily chose the best energies based on price and reliability.

Here is what Thomas Edison really believed (with key sentences bolded for emphasis). These quotations are taken from my book, Edison to Enron: Energy Markets and Political Strategies, which was published in 2011. (Shiny copies still available!) [1]

Business Model (p. 19)

In 1881, the 34-year-old Edison and the 21-year-old [Samuel] Insull came together and built the company that in 1892 would become General Electric (GE). But also in 1892, the 32-year-old Insull left GE and New York City for Chicago, with a grand plan of turning electricity from a luxury to a mass-produced, affordable necessity. It was there in Chicago that Insull applied his mentor’s model of central-station generation, serving wide areas, instead of small, isolated plants serving a particular establishment or need. Don’t self-generate, Insull insisted, backed by a sea of operational and financial statistics. Buy your electricity!

Scale economies from Insull-pushed engineering advances and Insull-led managerial innovations made Chicago “the electric city.” From this base, Insull took his low-cost, high-volume model to the suburbs and then to the countryside, with his new companies combining long-reach transmission with central generation. “Insullization” became a noun in the burgeoning electricity business—now one of the nation’s largest.

Pearl Street Central Station (p. 35)

Just months before Insull arrived, the Edison Electric Illuminating Company of New York (New York Edison), the company now known as Consolidated Edison Company of New York, or ConEd, was created to underwrite the construction of a single station to generate electricity in bulk and serve a section of New York City. Edison and investors were confident that the facility would prove superior to both arc lighting and gas lighting.

p. 45:

Commercial electric lighting needed more than Edison’s candle. Electricity itself had to become more affordable, which meant generating more electricity per horsepower input. Edison’s crash effort to improve on-site electrical generators was largely accomplished by 1879, although it would be more than two years before the Edison Company for Isolated Lighting (Isolated Lighting) was formed to tap into the lucrative dynamo market. But this was not the answer, Edison felt. Something new was needed to “make electric light so cheap that only the rich will be able to burn candles.”

Edison saw the future in jumbo generators (named for P. T. Barnum’s circus elephant, Jumbo), as opposed to on-site dynamos, many of about eight horsepower. By wintertime 1880, his inaugural “Central Station” at Menlo Park (New Jersey) lit the laboratory and neighboring residences as well as powered the machines.

The construction of six-ton, 200-horsepower units came next at Pearl Street Station, located at 257 Peal Street in lower Manhattan. The first commercial electricity station, and the prototype for what would become the entire power-generation industry, began operation in September 1882. Each 100 kilowatt unit was capable of lighting 1,200 lamps versus the Menlo Park unit’s 50.

One of Pearl Street’s coal-fired units lit 900 dwellings in the First District of New York City, a one-square-mile area that included Wall Street and Drexel Morgan’s 106 lamps….”

Central Stations Go National (p. 45)

With Pearl Street operational, Edison called on his own resources to create a new company to sell central stations to the market. In 1883, Edison tapped the 23-year-old Insull to run the Thomas A. Edison Construction Department. The business proposition was for cities and towns to commit between $50,000 and $250,000 for Edison Construction to install a jumbo to serve residences and businesses. Each of the local distribution companies (LDCs) would pay royalties to Edison Light and use the Edison name. The central-station proposition also benefitted from the inventor’s new three-wire transmission system….

When Insull hit the road in 1883 with his turnkey proposition, there were precious few central stations compared to hundreds of dynamos (many of Edison origin) installed around the country.

 Still, Insull was selling a good product. Jumbos built by Edison Machine Works and installed by Edison Construction Department created Edison LDCs in New York, Massachusetts, Ohio, and several other states.

p. 46:

The year 1886 was eventful for Edison and the burgeoning electric industry as a whole. Central-station electricity boomed…. By 1886, Edison Light Company had a presence in major cities in the United States, Europe, South America, and Japan, with 500 dynamos and 330,000 lamps on the books. Jumbos had increased to 58 from a dozen in just two years. Total assets were $10 million (about $125 million today), and more profits were registered in this year than in all prior years combined.


[1] Edison to Enron, pp. 19, 23, 35, 42, 44–46, 55.

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