Reference: Playing with Fire - The 10 Tcf/year Supply Gap -- Part I
To all readers that want to learn about the third way of deregulation
Eberhart Rechtin and Mark Maier, in their book “The Art of System Architecting,” explain that “social system quality… is less a foundation than a case-by-case trade-off; that is, the quality desired depends on the system to be provided. In nuclear power generation, modern manufacturing, and manned space flight, ultraquality is an imperative. But in public health, pollution control, and safety, the level of acceptable quality is only one of many economic, social, political, and technical factors to be accommodated.” [I published this insight on march this year at the Academy of Science of the Dominican Republic.]
In the first case, the experts are the engineers. For the center stage, controlled market, system engineer institution to assures that electrons and people have the same purpose, as I mentioned on 12.30.06, ultraquality is an imperative to manage short run and long run systemic risk, with both supply side and demand side resources.
In the second case, according to Rechtin and Maier, the accommodation is done by the architect with “a professional response to the public needs and perceptions.” It is such unjustified perceptions that fueled the decade long debate. Bill Hogan mistake was that he didn’t understand what Fred Schweppe meant by the fourth criterion: “consider the engineering requirements for controlling, operating and planning an electric power system,” which can only be met by ultraquality. As time has advanced and new digital technology market share becomes larger, electricity demand for quality is only increasing. A professional response is needed, however, for the remaining, non real-time, free market activities of retail and generation. EWPC for the customers is such a response.
PEST engineers are correct when they say that “'Deregulation and the concomitant restructuring of the electric power industry in the United States have resulted in a decline in the reliability of North American bulk power systems and constitute the ultimate root cause of the California meltdown, Enron's depredations, and the 14 August 2003 blackout.”
In al three cases mentioned by PEST, the root cause is the lack of ultraquality. First the lack of ultraquality “stressed the system.” Had the past decade been used to developed elasticity in the resources of the demand side true, none of the three cases had resulted. The decline in reliability when the system is stressed led to price spikes. Instead of changing from stage 1, to stage 2, to stage 3, California just needed to rotate blackouts and compensate the customers’ interruptions.
While PEST can be tagged as pinning for the good old days, by no means are they silly. Engineering manpower and institutional memory has suffered a lot in the power industry worldwide under deregulation. There is a need to allow for the emergence of the good new days, and EWPC is a strong candidate to increase the revised criteria: 1) Freedom of choice; 2) Economic efficiency; 3) Equity; and 4) Ultraquality. Only through new knowledge and innovations will societies satisfy emergent needs.
© 2006. José Antonio Vanderhorst-Silverio, PhD.