A new approach to power energy policy design, based on system’s architecting heuristics, has led to an emerging simplified synthesis of the power industry regulatory policy. Instead of undergoing business as usual regulatory proceedings, the approach to the Electricity Without Price Controls Architecture Framework is poised to replace the Investor Owned Utilities Architecture Framework and its incremental extensions that have evolved by analytic patchwork as a extremely complex system.
The Electricity Without Price Controls Architecture Framework
By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
EWPC Systems’ Architect
First posted in the GMH Blog, on November 30, 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 firstname.lastname@example.org to contact the author for any kind of engagement.
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The Electricity Without Price Controls (EWPC) Architecture Framework (EWPC-AF) is a basic innovation that greatly simplifies today’s exceeding complex power industry. The EWPC-AF emerged to replace the century old Investor Owned Utilities (IOUs) Architecture Framework (IOUs-AF) and its incremental extensions, such as Open Transmission Access, Capacity Markets, NERC Mandatory Requirements, and now the regulated architecture Smart Grid.
By having demand as an externality, IOUs-AF industry growth is traditionally measured up to the consumer meter. As the grid is not longer able to meet the performance requirements of an increasingly share of demand, industry growth needs to take it into account those contributions.
Growth measures should reflect the new reality of the EWPC-AF. By integrating demand to the power system, large investment in, for example, demand side energy efficiency or distributed generation, or both, the EWPC-AF will help reap important value added coordination savings within the larger industry envelop.
The EWPC-AF is a two tiered architecture that greatly simplifies regulations. The first level is an intermediate architecture aimed for an energy policy act, which separates the whole emergent complex system into two less complex systems. Those systems are highly cohesive with lightly coupled interfaces among them:
1) A primary regulated power (integrated transmission and distribution) transportation service system (RPTSS) compact with a responsibility to transport electricity of commercial quality (EoCQ) of a given area; and
2) A complementary open market business system (OMBS) on the value chain generation, retail, pro-sumer (consumer that may produce).
To enable the purpose of maximum social welfare of the whole, the expansion of the RPTSS is to be done at least costs to transport electricity within the OMBS. The expansion of the OMBS value chain also includes customers’ electricity investments, operating, and maintenance and outage costs.
An important part of the value creation of the EWPC-AF in the OMBS comes from changing the managing by averages in retail markets to managing by “discovering new sources of profitability in a network economy… when the events are interconnected and interdependent (Hax and Wilde, the delta project)” through the development of Business Model Innovations by Second Generation Retailers (2GRs).
The second level architecture is reserved for proprietary architectures for open systems under the leadership of 2GRs. Most value creation will be the result of an architecture competition centered on the Silicon Valley Model, which will lead to the final architecture of the EWPC Smart Grid, which is just one of the disruptive components of the whole.
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