domingo, febrero 07, 2010

A Single System & the Enterprise War

A single integrated emergent power service system is optimally structured into the enterprize and the grid subsystems, that are highly cohesive with lightly coupled interfaces. The enterprise subsystem is designed to enable an architecting war among Second Generation Retailers, while the grid subsystem remains regulated.

A Single System & the Enterprise War

By José Antonio Vanderhorst-Silverio, Ph.D.
Creator of the EWPC-AF
Systemic Consultant: Electricity

First posted in the GMH Blog, on February 7th 2010.

Copyright © 2010 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.

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During the past week I posted comments under two articles. Under the first article, Why Today's Utilities May Soon Be Obsolete (and What May Replace Them), written by Dr. Richard Tabors, Vice President in the Energy & Environment Practice of Charles River Associates, I posted comments under the headings EWPC-AF the Emergent Paradigm Part 1 and Part 2, as well as The Tipping Point Will Enable the Mass Market. Please read those comment at the source.

Under the second article, Smart Grid Culture War? Power Guys vs. Netheads, written by Bob Gohn, a senior analyst with Pike Research, I posted comments under the headings What Needs to be Fixed, Structuring to Avoid Incumbent and Entrant Wars, and A Single System & the Enterprise War Part 1 and 2. Making minor changes, only the last two posts will be transcribed below while adding the following clarification.

It is important to say that at the end of this post there is a quote of the book Spot Pricing of Electricity, which views "... the utility and its customers as a single integrated system." It is evident that under the Electricity Without Price Controls Architecture Framework, the single integrated system is split in two subsystems that are highly cohesive with lightly coupled interfaces among them. Those subsystems are called in this article the grid and the enterprise. In the enterprise subsystem, the customer buys and/or sells electricity to Second Generation Retailers that compete in retail and wholesale markets, while in the grid subsystem the utility has only a responsibility to deliver that electricity.

Next is the transcribed text:

I like what is emerging in a very valuable and very deep dialogue that was started by Bob Gohn. Several interesting contributions have been added. So with a lot of respect for very important and intelligent contributions, I will add the following two more post to my two posts.

So, please correct me if I am wrong, but there are cultures and subcultures. In that sense, there has been for quite some time a real-time control subculture within the utility culture. Now we see emerging many subcultures to satisfy professor Santiago Grijalva and my friend Jesse Berst. I guess all of the elements go beyond the Smart Grid and to the emerging whole SPS.

More than two years ago, in the EWPC article The Anti-System Utility, I used Warren Causey’s insights on the two utilities’ cultures, that he called the grid and the enterprise, to conclude that they “don't operate as a system because of a monopoly mindset of incumbents investor owned utilities and political interference.” I guess the anti-system utility is another way to explain in simple terms the ongoing value destruction

The culture of the grid is that of the power guys and it is shared by transmission and distribution guys. The culture of the enterprise is the culture of the netheads. As architect Louis Sullivan argued “form follows function.” This is where bill ferree post about centralization fits, which I argue also fits well with the idea of a Smart Grid with end-to-end connectivity. Thus as the old form of what I call the Investor Owned Utilities Architecture Framework and its many heterogeneous incremental and increasingly complex extensions need to be replaced by a paradigm shift to an emergent whole SPS form, that is highly simplified.

As can be seen at the end of the article Electricity Without Price [Control Architecture Framework, instead of having a war between incumbents and entrants, “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.” Please update “the final architecture of the EWPC Smart Grid” to “the final architecture of the emergent SPS.” After SPS structuring, today’s’ utilities have a chance to elect the low risk primary regulated Smart Grid with the power guys’ culture or go to war with the secondary commercial subsystem entrants with netheads’ culture.

Following the insight of the Enterprise Architecture Management Group announcement, that says “This group is for those architects who focus on the enterprise as a whole, as a single system within its environment,” I sort of disagree with Jesse and Bob on the idea of letting the status quo influence the architecture. In response to the suggestion to change to system-of-systems, the synthesis of the response was that to optimize the architecture, subsystems will result from the enterprise architecting job.

My architecting work started on the vertically integrated utilities, because I discovered a fatal flaw in the Energy Policy Act of 1992, as Open Transmission Access led to the separation of T&D. Richard Tabors’ argument was probably based on inactive distribution and inactive loads, which was completely contrary to the essence of the book Spot Pricing of Electricity. On page four of that book says that “the four basic criteria [freedom of choice, economic efficiency, equity, and utility control, operation and planning] can be achieved only by returning to the first principles of economics and engineering and by viewing the utility and its customers as a single integrated system. The result of this integration is the spot price based energy marketplace, which the subject of this book.”

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