By balancing the influence of supply side and demand side, it is possible to develop retail markets and wholesale markets that mutually reinforce each other to increase the leverage of the economic stimulus and to set a leadership example for the whole world.
How to Increase the Leverage of Stimulus Bill to Global Green Energy
By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
First posted in the GMH Blog, on February 18th, 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.
Kevin Bullis post The Stimulus Will be a Boon to Green Energy, dated Tuesday, February 17, 2009, is synthesized with “The law, to be signed today, will help renewable energy businesses and improve efficiency.”
There should be no doubt that a green revolution is in the making, with the stimulus bill missing only a highly leverage systemic paradigm shift to increase its global leverage, for which DOE, IOUs investors, and the global society in general, have strong arguments. Today’s old paradigm has a center of attraction that favors the supply side fossil fuels, but does not favors demand side renewable energy and energy efficiency.
The new paradigm, which is neutral to the supply side and the demand side, will exert a great leverage attraction to the demand side, just to balance the accumulated excesses on the supply side induced by the old paradigm. The leverage comes from the electricity without price control (EWPC) market architecture and design paradigm.
As can be seen in the EWPC article Propelling the Power Industry to a Superior Solution Path, the assumption that competitive wholesale markets are a prerequisite to efficient retail markets have been disproved. As can also be seen in the EWPC article, that assumption went against the warnings of the late M.I.T. professor Fred Charles Schweppe and his colleagues, back in the 80s. Dr. Schweppe, the leading power systems control authority at the time, suggested an “energy marketplace [that] involves the utility and its customers operating as partners,” which is the essence of the smart grid initiatives. EWPC is an extension of Schweppe’s the Spot Pricng of Electricty.
That flawed assumption had a global pervasive impact. With its origin in EPAct 92, the assumption got even into the purpose of the COMPETE Coalition, which advocates: “… well functioning, competitive wholesale electricity markets which enable state governments to implement retail electric service options best sited to their regional needs and which enable consumers to benefit from the best possible price and service." We all know that organized wholesale markets have undergone a series of costly incremental extensions under the attraction of the old paradigm.
EWPC extends Schweppe’s development by involving customers operating as partners of the utility to make a big difference: “Under EWPC, retail electric service is not simply enabled by wholesale electricity markets. Retail electric markets and wholesale electricity markets mutually reinforce each other to provide a fully functional [competitive] electric service. That is why EWPC is able to produce a superior solution path through innovation in retail electric service at the federal level.”
Please read the EWPC article to learn about the strong arguments that DOE, IOUs investors and the general public have in order to convince state governments to join them. The article summary says; “To raise the competitive balance of the power industry to a superior solution path, “public utility commissions … have to let go of their authority to regulate rates at the retail level.” PUCs need to let go in order to enact an EWPC based EPAct that opens to competition a federal wholesale and retail electricity market, creating investments, innovations, and jobs with a lot future.”