I have just made a comment to the article "2006: New Challenges and Opportunities in the Brazilian Electric Energy Arena," by Rafael Herzberg, Partner, Interact Ltd., Energy Consulting, which was published today.
The wait-and-see warnings that professor Banks talks about are of systemic nature. Linear economics cannot explain the non-linear systemic feedback links of the power business. There are systemic delays which fool us into believing that things are working, when they are not. As some customers get better deals, the remaining customers are pressured to pay more through rate hikes to maintain power sector financial sustainability. As rates go up, many things happen, like increases in theft, more customers that find attractive individual solutions, etc., leading to a vicious circle. If rates are clamped, long run investments suffer and a boom-bust cycle gets in.
We have the best example of a failed "deregulation" effort in the Dominican Republic, which I have recently characterized as a black hole. Investors came to the Dominican Republic, and in their due diligences didn't see that a disruptive technology (on-site generation) was making an inroad. A systemic process called "the boiling frog" was at play, resulting in an exponential growth of individual solutions. However, that big problem is giving us great opportunities, as demand response can be developed to transform a very unreliable, disintegrated, and unarticulated system, into the opposite.
I suggest that you take a close look at the active discussion on Energy Bill 2005 – A Waste of Time? Unless a complete deregulation is done, in which there is demand response, no firm power (but different grades of firmness), no discrete demand charge (but real time demand charge), no price controls, and where retailers compete with each others to minimize customer's costs, without interference from distributors (with financial interest in retail), economic inefficiency sets in. In a sense, there is a need for a new paradigm to get to true market deregulation.
miércoles, diciembre 07, 2005
President Leonel Fernandez is expected to provide the international perspective at the ITFlorida's annual Awards Gala and Tech Forum, which is being held at the Walt Disney World Contemporary Resort at Lake Buena Vista, on 14-15 December this year. As reported by the organizers, joining President Fernandez during the two-day event will be US Representatives Connie Mack and Tom Feeney, key technology leaders, and several hundred IT executives and professionals. Governor Jeb Bush of Florida, a regular participant in the ITFlorida events, is scheduled to deliver a State of Technology in Florida address. President Fernandez will provide insight into how the Dominican Republic has become an economic growth leader in Latin America, and will detail the many opportunities available to Florida businesses and technology interests. As a state, Florida is the DR's largest trading partner in t! he United States, and has enjoyed a strong relationship with the country. The organizers are highlighting the fact that this is a particularly unique opportunity as it will be the first time that ITFlorida has hosted an international leader at one of its events. "This is a very exciting opportunity to meet with a head of state to discuss business opportunities in his country," said Matt Doster, executive director of ITFlorida. "And I can't think of a better location in the region to look in, particularly with the US-Dominican Republic-Central America Free Trade Agreement. Anyone doing business in Latin America needs to hear what President Fernandez has to say." ITFlorida's Annual Awards Gala and Tech Forum will provide state business and technology leaders with a comprehensive medium to recognize the achievements of their peers, discuss current information technology trends, and hear about the latest technology developments around the region.
Sugerimos encarecidamente a los lectores y lectoras el Editorial de Clave Digital sobre Luís Arthur
A sus 69 años, después de toda una vida "en la brega", Luis Arthur Sosa ha decidido reinventarse en otro escenario pero sin abandonar su sueño de que aquí, en República Dominicana, todavía es posible adecentar la vida pública y crear un ambiente de justicia igual para todos. Sólo de este modo, entiende, será alcanzable el progreso.
Hay razón en esa percepción y mucho de atendible en el razonamiento de este dominicano al parecer hastiado del desorden y de la impudicia que tal estado de cosas apareja.
Arthur se confiesa cansado, no derrotado. Tiene la convicción de que, por ahora, las fuerzas que amenazan con hundir más al país superan a las suyas. "Llega un momento en que la edad y las decepciones hacen que uno quiera tirar la toalla", dice con amargura.
Su decisión es radical: vender e irse, con ánimo de reexaminar las contingencias y los condicionantes, en modo alguno para abandonar las metas.
Y, en efecto, ha vendido todos sus bienes, obtenidos en buena lid, desde su impecable ejercicio profesional hasta su paso por la Asociación de Empresas Industriales de Herrera. Oigamos, pero sobre todo asimilemos, algunos de sus juicios, externados en la entrevista que para Clave Digital le hiciera recientemente Ana Mitila Lora:
"Nunca busqué contratas del Estado…, carezco de la capacidad de comprar hombres y conciencias, y de vivir en la corrupción creciente que se viene dando desde los 12 años de Balaguer… Creo que transité por el terreno enlodado de nuestro país ensuciándome únicamente la suela de los zapatos. Ahora, en mi retiro, consumo mis ahorros prudentemente, tratando de alargarlos para que lleguen hasta el fin de mis días."
Que no se engañe nadie creyendo que esa es la expresión de la derrota. En Arthur han
triunfado la entereza, la humildad y la temperancia, prendas que al parecer faltan en muchos otros que han asumido responsabilidades de conducción pública.
Clave Digital entiende que el país necesita de muchos Luis Arthur Sosa, hombres y mujeres que se resistan a renunciar al desafío de soñar una República Dominicana mejor, con capacidad suficiente para conducirse al margen de tratativas perversas que ningún valor agregan a la vida ciudadana.
It is very important to recognize that Dr. Kashti is from the United Kingdom, the first country to do retail deregulation, and the model for Europe. I have added the following comment to Dr. Kashti response:
Energy Bill 2005 is not a Waste of Time Part 3
I agree with Dr. Kashti on the need for external incentives, if there is no complete restructuring. However, if true retail (and wholesale) competition is enabled, retail marketers will have the right incentives to develop innovative business designs, without the need for price controls, integrating real time metering, energy efficiency, and demand response. Again, I believe that this is a vision leading to the End-State of the electric power industry.
Energy Bill 2005 is not a Waste of Time Part 3
Dr. Kashti response on EnergyPulse agrees with my comments. He says, among other things that: "Demand response, as Dr. Vanderhorst-Silverio rightly points out above, is the greatest advantage smart metering scheme would bring to any economy."