miércoles, julio 25, 2007

NERC Compliance and Power Sector Structure

I just placed the following comment under the article The Rules Have Changed and the Stakes Are High by Tamar June, Vice President, Strategic Marketing, AssurX, Inc., posted on 7.24.07 on energypulse.net.

The rules have changed, but is the power sector structure the right one everywhere? The stakes would not be as high if structure were right, again, everywhere. Below is what I see emerging under the Electricity Without Price Controls (EWPC) paradigm:

Transportation (transmission and distribution) should remain integrated or be reintegrated to manage physical long run (system adequacy) and short run (system security) properly - that is what I termed ultraqualiity transportation. By imposing NERC standards without proper power sector restructuring a lot of value destruction is bound to happen.

As demand will no longer be exogenous, physical systemic risk should be done with the proper mix of supply side resources and demand side resources. The November 2006 large blackout of Western Europe gave a great signal on the weaknesses of having transmission separated from distribution.

Under EWPC restructuring the essential entities are: system engineer (in charge of physical systemic risk), generation, transportation and retailing. The compliance of NERC standards will no fix the structural flaws remaining.

The above is not a position. Comments are invited, under the principle that "I am not my opinion," as part of an Ongoing Generative Dialogue to learn about what power sector market design and architecture is emerging. So far there are 15 energypulse.net articles on the red link.

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