miércoles, marzo 05, 2008

Power Markets Essential Requirements

Should we keep wasting time and money fixing unfeasible markets propositions? To perform the actual implementation of the EWPC paradigm shift, it is wise to start on the essential requirement of the markets system.

Power Markets Essential Requirements

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

First posted in the GMH Blog, on March 5th, 2008.
Copyright © 2008 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 javs@ieee.org to contact the author for any kind of engagement.

Thanks Todd for your post.

We should forget the details, and focus just on the essence.

In addition to the ultraquality requirement (not considered at the outset of deregulation), there are 8 possible discreet combinations of the following three variables. Every feasible paradigm (of the 16 possibilities many are just not feasible) needs to select a YES or a NO as an answer to make a paradigm shift.

1) Wholesale Competition: YES or NO
2) Retail Competition: YES or NO
3) Active Demand: YES or NO. (Also not considered at the outset of deregulation.)

In the essence of EWPC all four variable are YES. The combination of Active Demand and Ultraquality Transportation (retained by the closed transportation market) leads to the requirement of Demand Integration to power system planning, operation and control, which is accomplished by 2GRs while performing Retail Competition and Wholesale Competition (in the open market).

Under vertical integration (fully regulated plans – Don’s paradigm) all three answers are NO. Ultraquality is a YES, but property of generation and transmission, as Inactive Demand is considered as an externality. The world changed making vertical integration unfeasible, and as a result we need to change policies, from Inactive Demand to Active Demand, as you explained on 1.15.08 in the excellent contribution that I named as An Undiscussed Elefant. Here again, to keep the ultraquality requirement leads to the need of Demand Integration by 2GRs.

At the outset, restructuring had inactive demand and separate transmission and distribution, with distribution most of the time under the incumbent utility. Lack of an ultraquality requirement and active demand in the original restructuring market architecture and design made it unfeasible. Trying to fix the BIG flaws of the original restructuring has resulted in an inordinate increase in complexity (as many unneeded rules tied to earlier contractual and regulatory arrangements remain buried while giving unnecessary commercial rights) by adding costly incremental extensions of Capacity Markets (a feature of vertical integration), NERC mandatory requirements, recently Demand Integration, etc. That is an extremely destructive and uncertain method to get there.

Since IMEUC has NO Retail Competition nor Ultraquality, and thus NO Demand Integration to power system planning, operation and control, it is just an incomplete and unfeasible proposition.

The above is just another confirmation that EWPC is the winning market architecture and design paradigm. Should we keep wasting time and money fixing unfeasible propositions?

An Undiscussed Elefant

Posted by Todd McKissick on 1.15.08, under the article Climate Change & Energy Security - What's Really at Stake in the 2008 Election. It is posted as part of an inquiry made by Todd to myself.

There seems to be an elephant in the room that no one is discussing. We all know that governmental policy is at best only influenced by corporate interests and at worst entirely driven by them. Why then, is the solution always to look to them to fix our problems? I firmly believe that the only way to solve this problem is to put all our available investment into new and alternative technologies. These are the only thing that fully offsets fossil problems. Sure, conservation (in it's many forms) is needed but that will happen in proportion to price and awareness. Unfortunately, it only delays the big crunch (regardless of whether you're worried about GW or economy or security). Sure, investment is needed in extending our current supplies whether that's crude, NG or even nuclear but again it's only a delay. From a long term point of view, the only genuine solution is fully renewable technologies. Why not speed up that development?

There are those that say these technologies have too many problems. Examples include scale, dependability, cost and even aesthetics. The reality is that these are all more easily solvable than the much touted 'delays' being offered as our best first goal.

My research has found literally hundreds of backyard inventors that have created very viable systems to solve each of our needs. One guy is modifying hummer vehicles as a publicity stunt to show they can have less emissions, get over 85 mpg and have more performance than stock. His cost is around $30,000, but estimates it to be under $3,000 when built-in at the factory. What kind of mileage could he get in a conservative car? Why isn't the wonderful government all over this guy throwing money at him? Detroit is just now beginning talks though, so who knows.

Another guy in Africa modifies motorcycle engines for $100 to double their mileage and halve their emissions. He's been fighting the patent process for a couple years that I know of.

Another small company is making home microCHP boilers and putting the waste heat to domestic use for a 40% overall savings. They got involved with a large corporation and are playing some strange game with their marketing now. With their product hitting the market 3 years ago, one has to wonder why it's no longer available.

There are hundreds of independant stories like this. There are also dozens of publicized stories of research based 'breakthroughs' in the PV or bio markets as well. Most have primary goals of being a cheaper solution to the consumer overall. When these become mainstream choices available to the consumer, they will make conservation a moot point (for that home). They will make the economic issue moot as well because the money will be spent at the lowest consumer level and be directly offset by fuel savings. They will also completely eliminate a portion of fossil fuel use to the extent that they generate. Lastly, their adoption will be more distributed, faster and easier than any other option, save only a distracting CFL switchover. That adoption will also become worldwide which doubles the reduction in trade deficit felt by less crude imports.

The problem is that these solutions are not getting their fair shake in the market. Investment by vulture capitalists is not appealing to them. Government grants have too many strings and too long of a timeline. Publicly funded research (universitys, etc.) has mostly continued research dollars as their primary goal. That leaves only two options, non-profit research grants and personal loans. Since non-profits have so many loopholes to jump through and have to maintain their non-profit status, they basically follow government guidelines on which technologies to assist.

We need to change policy to allow anyone to invest, loan or gift money fairly to our nations' creative individuals to get some of these to market. The outcome will be tremendous benefits to our energy woes, our economic woes and possibly even bolster the housing market. In the end, we need these new solutions anyway, why not focus on them and their current roadblocks now?