domingo, julio 05, 2009

The Deadly Sin of State Regulators on the Smart Grid

President Obama and Secretary Chu need to learn urgently about the deadly sin of the smart grid that state regulators are making, that is leading to a huge Greek Tragedy. Politics as usual will keep “… generating a legacy bubble that will explode with a stimulation package that will not transform the power industry at all.”

The Deadly Sin of State Regulators on the Smart Grid

By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
EWPC Systems’ Architect

First posted in the GMH Blog, on July 5, 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 javs@ieee.org to contact the author for any kind of engagement.

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The huge Greek Tragedy in the making with the smart grid development is a typical case that has “an unprecedented number of interdependent risks,” such as The Egg Basket deadly sin of the flaw of averages, as Sam Savage, Stefan Scholtes, and Daniel Zweidler explain in their article Probability Management, as reprinted by the IEEE Engineering Management Review, Vol. 37, No.2, Second Quarter 2009. The authors write:

Consider putting 10 eggs all in the same basket, versus one by one in separate baskets. If there is 10-percent change of dropping any particular basket, then either strategy results in an average of nine unbroken eggs. However, the first strategy has a 10-percent chance of losing all the eggs, while with the second there is one chance in 10 billion of losing all the eggs.

That is the huge kind of interdependent risks that state regulators are taking on the smart grid projects under the IOUs Architecture Framework (IOUs-AF) with all the eggs on the basket. As the reengineering revolution show that 75 percent of projects were not successful, the Greek Tragedy in the making has spoken. The situation gets even worst at jurisdictions where the artificial profit decoupling incremental extension of the IOUs-AF is also being considered.

Under the EWPC Architecture Framework (EWPC-AF), retail markets business model competition (not all the eggs in one basket), there is such a low expected probability of failure, which enables the development of business model innovations that better understand and satisfy customers’ needs. Under the EWPC-AF, natural decoupling is set by natural selection of competitive market survival, as customers are able to choose.

Now I have more on the IOUs-AF architecture flaw, courtesy of Mr. James Carson, as he returns to comment and as I keep paying close attention to what he writes. In response to the EWPC article COMPETE Coalition to Stop a Huge Greek Tragedy in the Making, where after it is clearly shown to him that IOUs are indeed entrenched, Mr. Carson responded not about the Greek Tragedy, nor the COMPETE Coalition, which is where he stopped, and try to rationalize by saying:

Frankly, I stopped because you weren't paying any attention to my posts. I should have stopped long ago when you posted the details of the EWPC transformation were unimportant.
As readers can confirm once again, I pay lots of attention to the comments I receive. But as it happens, Mr. Carson is a master at selecting what he wants out of the context. As can be seen under the EWPC article Just as Pogo, IOUs Found the Enemy, this was the context he selected:

EWPC centers its attention in the essential systemic elements of the transformation. This is what I wrote on another EWPC article, which also explains the flaw of wholesale deregulation: We should forget the details, and focus just on the essence.

He then he picked just the last sentence out his own chose context. But, to explain the flaw of deregulation, as a systems architect I only needed to look at the essence as follows:

The IOUs-AF architecture flaw, introduced as early as the enactment of the 1992 Energy Policy Act (a common and very costly architecting error introduced by the IOUs lobby to extend the obsolete IOUs-AF), was based on inactive external demand, which in turns allow the assumption of inactive distribution, for IOUs to keep what they considered to be their “native loads.” It is that flaw, which enabled the development of a great legacy of open transmission access and organized wholesale markets, which have produced a huge unnecessary and costly amount of details and unnecessary investments that are bound to be worth nothing in the future.

In fact, under the EWPC-AF, demand is active and so is distribution. It is with the development of the resources of the demand side, that demand becomes elastic and gets integrated to power system planning, operation, and control, enabling a least costs development of the integrated transmission and distribution grid. That is why under the EWPC-AF, retail and wholesale markets mutually reinforce each other to enable a virtuous circle of value creation that will let regulators get back to their original job of doing almost nothing.


eMail Enviado: Voluntad Política Innovadora para Enfrentar la Acumulación de Males

Estimados líderes,

En su interesante y oportuna columna Puntos de Vista - Acumulación de Males, José R. Yunén expresa que “existen numerosas pruebas clarísimas de la imprevisión e inoperancia continuada que no se le ha puesto remedio a tiempo; tenemos la insuficiencia y el desastre de los servicios públicos fundamentales, que todo lo dificultan y que nos irrita, sobre todo a los más pobres” y concluye que “por ello, en voz unánime, este país necesita más administración y menos política.”

Estando totalmente de acuerdo con prácticamente todo el planteamiento del Dr. Yunén, y basado en el esfuerzo arquitectónico con que ha emergido la solución innovadora a la crisis sistémica dominicana de grandes proporciones del sector eléctrico, que sigue destruyendo continuamente inmenso valor, refino solamente su conclusión diciendo que el país necesita ante todo un liderazgo innovador, así como más administración y menos politiquería. Digo lo anterior por lo que se explica en la Síntesis del Panel en Portada 15, de que el país necesita en más voluntad política, no menos, para transformar dicha crisis en una plataforma de desarrollo nacional de innovación para que pasemos, de tener uno de los peores servicios públicos del mundo, a ser los líderes del renacimiento de la industria eléctrica global. No cabe ninguna duda que esa crisis es la que “acumula los mayores males.”

Por ello, no hay más tiempo que perder para sumarse a la “voz unánime,” que facilite elevar grandemente la competitividad de los sectores productivos. Es necesario y urgente que los que se imaginen van a resultar perdedores dejen de temer al regateo emergente para tratar de equilibrar todos los derechos y deberes adquiridos que tienen con el Estado Dominicano, como por ejemplo los regateos constitucional y salarial, que están en estos momentos sobre el tapete. Se quiera o no, el equilibrio del regateo de los servicios públicos es vital y prioritario para relanzar el país, con sistemas innovadores, que cambien positivamente nuestra cultura del despilfarro hacia el ahorro de la energía y que continuamente agreguen mucho valor

Espero que la mariposa que hoy puso en vuelo el Dr. Yunén, en el Listín Diario, nos sirva para crear un huracán global altamente beneficioso para el país y los países que se asocien a nosotros en este esfuerzo.

Muy humildemente,

José Antonio Vanderhorst-Silverio, PhD.
Systemic Consultant: Electricity.
EWPC System Architect
BS ´68, MS ´71 & PhD ´72, all from Cornell University.
Valued IEEE Member for 38 Years.
javs@ieee.org
Follow on http://twitter.com/gmh_upsa
http://www.energyblogs.com/ewpc/
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Research and practice areas, and interests: Electricity Without Price Controls; Systems architecture; Systems thinking; Retail marketing; Customer orientation; Information systems requirements and design; Market rules; Contract assistance.



Listín Diario: Puntos de Vista - Acumulación de Males

José R. Yunén - 7/5/2009

Cuando los problemas que van surgiendo en un país se propagan o se solucionan precariamente, poco a poco se acumulan y hay un momento que se entremezclan unos con otros y amenazan con hacer una crisis profunda. Si aplicamos soluciones tardías, resultan insuficientes e ineficaces, pues se necesitaría más estudio o planificación, invertir más dinero y, por ende, más tiempo.

Si somos honestos. Este sería nuestro caso, y todos colectivamente estamos cargados de culpa de una manera o de otra. No debiéramos señalar al vecino; si dirigirnos al Gobierno que ha producido muy pocos cambios, manteniendo el firme propósito negativo en relanzar un nuevo gabinete; sin embargo, mantiene la férrea e inexplicable tolerancia de no querer arrojar para siempre los parásitos sociales y sacar de su cuerpo los vampiros que lo vienen deshidratando. Existen numerosas pruebas clarísimas de la imprevisión e inoperancia continuada que no se le ha puesto remedio a tiempo; tenemos la insuficiencia y el desastre de los servicios públicos fundamentales, que todo lo dificultan y que nos irrita, sobre todo a los más pobres.

Para no alterar el orden o sembrar la angustia que pueda añadirle a los nuevos problemas de los ya existentes, debemos ser justo comprensivos y pacientes reclamando y exigiendo que las soluciones a los grandes males no se vayan más postergando. En fin, la gravedad y urgencia de los problemas nos obliga, sin entrar en la arbitrariedad ni en la intolerancia, a no ser superficiales y poner en claro el fondo del mismo, la crisis económica global, ni la disminución de las remesas ha sido el detonante general de nuestros males. Sí! La insuficiente producción hasta alimentaria, la complicidad en los actos de corrupción que facilitan la impunidad formándose una asociación de malhechores y la gran dependencia, consecuentemente, con el exterior. Por ello, en voz unánime, este país necesita más administración y menos política.

Original del Listín Diario