jueves, diciembre 21, 2006

Playing With Fire and Collapse Part 13

Reference: Playing With Fire and Collapse Part 12

This is my most response to Len Gould - see his comment below


My opinion about having a middleman - the retailers under competition - between the generators and the customers to replace two middlemen - the regulator and the distributor under monopoly - is related to long run risk management for the development of the resources of the demand side. I just don't see yet the institutional arrangement to avoid the middleman. Rate of return regulation or performance based rates are avoided for the commercial competitive activities. Instead, retailers operate under prudential regulation / similar to the financial industry - to protect the public. Retailers also perform physical risk management on the demand side.

Len's comment

Jamie Wimberly's comment, quoted by Jose Antonio

"In fact, many utilities also are moving in that direction and attempting to more tightly integrate their systems, platforms and practices. Technology such as AMI is allowing for this progress in a way that simply did not exist five years ago"

simply indicates how poorly Mr Wimberly understands the concept I, and to a lesser extend Jose Antonio, advocate. Anyone with my experience in IT hardware and software would know that the ideal deregulated system which I advocate has been easily achievable and economical for at least the past 20 years, if fact ever since the development of the economical embedded digital computer. (How old is the digital wristwatch, the industrial barcode printer, portable barcode scanner, etc.? All these systems use esentially the same technology with similar economics. We were buying smart communications-capable thermal barcode printers and installing them in washdown industrial environments in the mid 1980's). We and many others were also connecting multiple very large databases all across Canada since 1990.

There is currently simply no technological or economic barrier to implermenting the smart metering infrastructure I advocate.

And Fred. I agree with you that the system cannot be fully implemented safely as long as many areas are served by only a few monopolistic generation entities. But I ask you, regarding your hate for "deregulation" and "energy free markets", how much of that is the result only of the experience of Sweden, where local prices were held artificially low because the generating companies were arbitrarily barred by law from seeking markets in other countries where electricity was more valuable? I grant that you may have a case, but I think it may not be an example which applies broadly to economics of electricity marketing outside of Sweden. I am convinced that the marketing model I advocate could safely be applied to most distribution regions in North America with only minor re-structuring of generation, esp. where the ISO - RTO model for transmission and market operation has been adopted, a significant proportion.

And given that the meters I advocate would inherintly include a connection for the customer's local CHP generation to tie in, and a communication pathway for the ISO to broadcast requests for their startup in urget peak situation (simply by offering a high enough price), I think it shouldn't take too long for a significant proportion of total generation to be provided by eg. small CHP generating units "topping the energy quality" of most natural gas now burned for heating fuel, which would then be able to keep the large generators honest.

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