lunes, julio 21, 2008

Is Gore's Revolutionary Leadership Challenge Feasible?

Al Gore leadership challenge is based on leading expert advice. EWPC is the first holistic step ready to be implemented in an Energy Policy Act that satifies the non-trivial power system requirements laid out by the leading experts power industry insiders the late Fred C. Schweppe and Jack Casazza.

Is Gore's Revolutionary Leadership Challenge Feasible?

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

First posted in the GMH Blog, on July 21st, 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 to contact the author for any kind of engagement.

As an expert, I state that Gore's revolutionary leadership challenge is feasible. I agree with what he states “It is achievable, affordable and transformative.” Ten years is more than enough to get out of the supply side (fossil fuel central station) system to a leveled playing field system in which the development of the resources of the demand side have equal opportunity as the development of the resources of the supply side.

Electricity Without Price Controls (EWPC) is a holistic market architecture and design paradigm shift away (that emerged about two years ago) from the obsolete and original Vertically Integrated Utilities (VIUs) paradigm vintage 1970. The VIUs paradigm had demand and customer reliability as an externality.

EWPC is based on non-trivial insights of the power industry at the outset of deregulation. Two leading experts that opposed wholesale deregulation for entirely different reasons were Fred C. Schweppe and Jack Casazza. By not considering their expert advice, the flaws in the political system have led to a series of baby steps, as Gores calls them, which have stopped the necessary revolution away from fossil fuels.

Late MIT professor Fred C. Schweppe led the development of Spot Pricing of Electricity (SPoE) in the 1980s. Schweppe and his team unveiled part of the theory and practice to enable the transformation of the electricity industry centered on the development of the demand side. Such transformation was cut short with Schweppe's death and a “misunderstanding” of his spot price based regulated energy marketplace (SPBEM).

The SPBEM was recommended by the team as a required previous step to wholesale deregulation, as many questions were still unanswered. However, the SPBEM was bypassed and the deregulation based on the development of the supply side debacle was the result.

Kevin Bullis writes of unanticipated consequences. They are the result of symptomatic solutions pushed by special interests instead of systemic solutions as Gore is calling for. A great example can be found in The BIG California LIE, whose summary states “The BIG LIE is that retail competition is impossible in electric markets. The implementation of a competitive retail market was the center of the debate in California. Instead of cooperating to implement it, the three big California utilities, that didn't care about the end-custumers, acted very irresponsibly. EWPC is the paradigm shift to show that retail competition is not only possible, but absolutely necessary to turn the electricity industry into a vibrant value added business for all stakeholders.

EWPC answered the questions and extends SPoE which is centered on the development of the resources of the demand side. Jason Black's MIT PhD theses envisioned demand and customer reliability integration, under the open transmission access (OTA) incremental extension of the VIUs paradigm. FERC has issued instructions to integrate demand under the existing OTA paradigm and the result is a large increase in complexity and confusion. The design mantra simplify, simplify, simplify is waiting to be applied to the system structure.

The other leading expert, Jack Casazza, concentrated his comments on the great loss of coordination savings by wholesale deregulation as the transmission system was being operated beyond its intended design criteria. As a result, it is very easy to show that transmission congestion is nothing more than increased reliability risk. The resulting policy is one of economy first, reliability second, E1R2, that not only decreased transmission expansion, but obliterated very large coordination savings. EWPC retains those savings and adds other substantially large saving by coordinating the development of the resources of the demand side to integrate them to power system planning, operation and control.

The EWPC paradigm shift adds the need for transportation (transmission and distribution) ultraquality open access. Ultraquality satisfies a criterion identified by Schweppe that enabled the discovery of the (system, not customer) reliability first economy second (R1E2) policy.

Applying the R1E2 policy a large reduction in complexity results in the separation of two interdependent markets:

1) A controlled transportation market and

2) An open market on the generation - retail - customer value chain, under prudential regulation, instead of price controls to the customers.

Readers are advised to act now, by calling on every candidate, at every level, to enable an EWPC Energy Policy Act. In order to act, readers may consider the 9 out of 10 most commented and 9 out of 10 most read articles which are based on EWPC. Below I suggest reading 10 of those articles, any of which may interest you to write to a candidate.

Most Commented
1. Can the Power Industry Eliminate its Price Controls to the End Customer? (62)
6. Campaign for Fair Electricity Rates (19)
7. An Overdue Debate: Customers’ Price Controls (18)

Most Viewed
1. Nanosolar Breakthrough and the Old Paradigm (1640)
2. The Sixth Disruptive Technology (1607)
3. Financing and Developing Wind Projects (1417)
7. Demand Integration is NOT the Province of Politics. (1304)
8. Slicing the Last of the Regulated Monopolies (1259)
9. Engineers Needed for Lower Prices (1251)
10. Free Market and Central Planning, Under R1E2 (1243)

Reference: Al Gore's Inconvenient Plan by Kevin Bullis