martes, noviembre 20, 2007

Increased Sense of Urgency of EWPC

EWPC sense of urgency is reinforced. As the market architecture and design breakthrough paradigm, EWPC will enable the possibility to a superior development path for the power industry. However, putting EWPC into practice to reap most of the benefits requires high caliber professional advice.

Increased Sense of Urgency of EWPC

By José Antonio Vanderhorst-Silverio, Ph.D.

Systemic Consultant: Electricity

Copyright © 2007 José Antonio Vanderhorst-Silverio. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, without written permission from José Antonio Vanderhorst-Silverio. This article is an unedited, an uncorrected, draft material of The EWPC Textbook. Please write to to contact the author for any kind of engagement.

Dear Mr. Gould,

Thank you very much for asking one right question, the one in the first crucial point that reinforces the increased sense of urgency about EWPC. The balance of your comments, however, has distortions and unnecessary repetitions.

In that “crucial point” you are describing the possibility of systemic risk – system adequacy problem - which is one of the main jobs of the system engineer (planner and operator) to be performed in coordination with generators, transporters and retailers. Today's regulation, deregulation, and re-regulation, based on inactive and inelastic demand (and an externality), and lacking customer oriented service, are not prepared to handle the managerial complexity involved.

To handle such complexity, we need to deploy 2GRs before "... electricity should become the mode to replace transportation fuels (PHEV's, H2, etc.)." Several market segments will develop, for example price takers, responsive demand (source of demand elasticity) and long term contracts. As 2GRs come up with the long term contractual commitments of ( i.e. industrial and commercial) customers that desire to buy the right of future electricity service at a fixed price, including those that have serve to finance base load power plants (i.e. via futures market), 2GRs will provide the system operator much more accurate demand forecasts. Such forecasts are better because demand in no longer an externality.

By updating power system planning procedures to EWPC with those quite accurate forecasts, the “projected demand” will NEVER “exceed available supply by a larger margin than the available demand control?” System reserves, in the proper mix of the “elastic” demand side and the supply side, should be adequate to run a stable system.

“How will your grid operator "guarantee" it's existence in all combinations of circumstances?” By proper long run power system planning system adequacy development. The statement “a new 1500 MW nuclear station when demand for it may be only at 100 MW,” is the result of a planning mistake or a misunderstanding of power system operation procedures.

That is why EWPC is the winner of the first phase of competition are precisely highly interrelated "absolute requirements" 1) integration of active demand and 2) that distribution and transmission are fully integrated geographically. Those requirements enable a superior solution path to the PROFIT ZONE through fully functional retail and wholesale competition. The obsolete regulation paradigm shifted the industry to the NO PROFIT ZONE and the deregulation experiments place it in an even more inferior path of development.

As for price caps, they are easily sold to voters. Under EWPC each customer has the right to choose its own price caps in the service plan of their 2GR as explained in No Need for Regulated Price Caps - I and No Need for Regulated Price Caps - II.

Distorting and naming the “absolute requirements” of EWPC as “two minor differences,” is no serious, just as it is also the “the added point” which are repeated again, and again, because Mr. G NEVER followed the links on EWPC is NOT the Ontario Model Either. Comparing the Ontario single generation retailer actions to those of the 2GRs adds insult to injury.

Finally, I repeat the summary of the article Take EWPC Lead & Reap Large Benefits: “The US Congress, the European Commission, the state of Ohio, and the Dominican Republic, are some the most likely candidates to start the paradigm shift to EWPC, ending demand forever as an externality. It has been shown that the days of the obsolete VIUs paradigm are counted. A paradigm shift to EWPC is the next source of business innovations, jobs with a lot of future and increasing exports. Those governments that take the lead, and avoid the risks of market implementation failure by retaining high caliber professional team advice, will reap most of the benefits.”

Best regards,

José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity