The End of the Vicious Pervasive Fossil Fuels is Near
By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
First posted in the GMH Blog, on January 7th, 2009.
Copyright © 2009 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 email@example.com to contact the author for any kind of engagement.
In the article Rationalizing Alternative Generation and the Existing Grid, posted on January 06, 2009, Warren Causey writes that " [O]ne of the most vexing issues for utilities is the widely divergent models represented by distributed generation and the traditional centralized generation... In one developing model, expensive transmission systems have to be built to reach wind farms or solar farms that generate only sporadically. This is not a very efficient model and the costs are very high...One of the best expositions of these issues, and potential solutions, that I have read lately was written by Lee Smith... To read Lee's suggestions, click here."
Mr. Lee concludes his suggestions with "So let's appraise the electrical grid from the load end and not the supply end." That is what electricity without price control (EWPC) market architecture and design paradigm has been aiming all along: to develop the resources of the demand side. See the January 05, 2009, "comment [I will Tell You Who is Going to Get the Power ]posted under the article You Tell Us, by Willie D. Jones, that was first published in the January 2009 issue of the IEEE Spectrum online.
In synchonicity with the above, also on Tuesday, January 06, 2009, Kevin Bullis posted Smarter Buildings Shown to Dramatically Cut Energy Use and introduced it by saying that "[M]ore people are waking up to saving energy with smart design." He asks "So why haven't more been built?" and gives a response about inertia.
Another response to the inertia (which signals the need for an emerging whole paradigm) in the question has to do with the Investor Owned Utilities (IOUs) paradigm, in which utilities profits are linked to utilities sales. In response to the January 01, 2009, EWPC article Will Anyone Pay for the SmartGrid? (please hit the link), which "is an invitation to readers to comment about the application of two social economists’ insights about the IOUs and EWPC paradigms," David Katz commented on the inertia as follows:
As long as governments are responsible for the regulatory regimes and political conseguences for the electricity rates to their consituents, the many costs and benefits of the intelligent and SMART GRID will be very difficult to truly measure. It will take a major transformation in the way utiliites are regulated so that the profit and rate of return will be more performance based.
Intelligent Buildings need to refelct this interoperability , especially as we make distributed genration and demand response part of the equation to meeet the load duration curves. See the convergence to Bright buildings proposed by CABA at www.caba.org.
This is my response on the CABA market segment:
Thank you David,
I browsed the highly rich source on CABA. With the "Bright" Green Building (BGB) paradigm paper, commercial and multi-residential buildings have available a business proposition that is "intelligent, green, and profitable." The proposition has the utility bill as an input, which they will indirectly affect as the IOU price control business model will respond later on with price and/or service distortions. I suggest that BGB's profitability will depend on the risk of the utility bill/service, where a void needs to be taken care of.
To take care of said void, this is part of what I think is emerging. Under EWPC, the IOU gets divided into a risk-averse state level regulated SmartGrid (SG) transportation only utility and non-risk averse competitive retailers (and generators) operating in the federal liberated and democratic market (not deregulated) under a prudential regulations.
The retailers are competitive Second Generation Retailers - 2GRs (please also hit the link) that will be selected by BGB owners to strike a long term deal to integrate demand to power system planning, operation and control. BGB owners will benefit and pay, 2GRs will provide. The government will approve tolls for the SG that will provide reliable transport service for BGBs, to be paid by 2GRs that benefit. IOUs might be losers, as they get split, since their 100 year old obsolete business model is not longer effective.
Risk-averse IOUs owners should become SGs owners. Non-risk averse IOUs should aim to become 2GRs owners after EWPC restructuring at the federal level (eventually at the global level), but they will no longer be able to become SGs owners. Generators will be winners or losers, as they face competition at the federal level, without IOUs price controls. Although the government loses its political power at setting retail rates, it gains even more by increase economic activity and the reduction of environmental impact.
In addition to the suggestions of Mr. Lee, on installing uncertain generation at the load, Mr. Bullis write that "NREL recommends that people not turn to solar panels and wind turbines to power their homes and businesses until they have adopted passive measures, such as better insulation, which can reduce energy consumption by about 75 percent."
Mr. Bullis adds that "President-elect Obama apparently got the word. He plans to create tens of thousands of jobs by weatherizing one million homes." The best way to do it, especially at the residential and small commercial market segments, can be found in the EWPC article Steven Chu: Four Years of Low Hanging Fruits (please hit the link), whose summary says: "Dr. Steven Chu can get plenty of results in the next four years, by placing into operation the financial mechanism to exploit the lowest-hanging fruits in the demand side. Such mechanism, enabled by the EWPC EPAct, will shift us away of the fossil fuel era vicious pervasiveness into the emerging digital era virtuous pervasiveness that will spread the clean energy revolution. "