miércoles, septiembre 01, 2010

A Message to US Senator Harry Reid About a Minimalist Energy Bill

Federal and state governments should take the leadership to initiate the transformation of the electric power industry, instead of developing individual symptomatic energy policies, for example, on energy efficiency, on the smart grid, and on Feed-In Tariffs, that are easily water dawn by the powerful energy industry lobby. The shared vision can enacted as a fundamental minimalist, holistic and emergent energy policy, based on the Electricity Without Price Controls Architecture Framework (EWPC-AF). Such policy will reduce the likelihood of The Third Depression by attracting private funding and creating green jobs from coast to coast.

A Message to US Senator Harry Reid About a Minimalist Energy Bill

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

First posted in the GMH Blog, on September 1st 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 javs@ieee.org to contact the author for any kind of engagement.

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Senate Majority Leader Harry Reid (D-NV)

Honorable Senator,

With all due respect, this article is written to respond the greentechmedia.com news report Harry Reid Touts Green Jobs From Coast to Coast: State energy efficiency policies will attract private funding and create jobs in clean tech, by Boonsri Dickinson. In addition, it also responds to the Technology Review post Energy Bill Consigned to Lame Duck Session: Senator Reid hopes to garner votes for a limited energy bill after the elections. But cap and trade is out of the picture, by Kevin Bullis. Both were posted on August 31, 2010.

As you are aware, the US and the world are facing a systemic crisis in the energy industry. I will concentrate on the electric power industry, which is where most of the energy policy leverage resides. To face that systemic crisis, as a way out to what Novel Price winner and New York Time columnist Paul Krugman has envisioned as The Third Depression, I have suggested that it requires an integral fundamental energy policy to initiate the transformation of the power industry. That is the way to face the powerful (pun intended) power industry lobby that opposes the creative destruction of the industry.

To neutralize that lobby, we need to concentrate the attention, not on utility executives, but on utility investors. Please take a look at Answering “What Energy Business Are You In?” As the Way Out of The Third Depression, Whose summary and conclusion says:

During a similar time of great change, railroads and utilities have defined their business incorrectly, by ignoring several insights, like the one Theodore Levitt gave us in his 1960’s Marketing Myopia manifesto. A quote on the 1982 book Megatrends explains utility investors why the attempt to keep a monopoly on the customer relationship, with an ineffective old economy Big-Bang Advanced Metering Infrastructure will further extend the uneconomic overexpansion of the resources of the supply side. To reduce the odds of the return of the depression, we need policies for the new economy, like power industry transformation and boring banking, which mutually reinforce each other with the coming communications’ boom to enable innovative value creation and long term jobs.

I conclude that any forward looking utility savvy investors, based on the above insights, will now be able to answer without distractions the question “What business are you in,” as either the T&D Grid or the Enterprise side of the EWPC-AF. Hence, I further predict that the opposition of state governments and the special interest utility lobby that aims to disallow the emerging creative destruction of the power industry will fade, in order to decrease the likelihood of The Third Depression.

That fundamental approach substitutes symptomatic energy policies, by integrating those specific cross-cutting issues to mutually reinforce each other. Three symptomatic policies in different stages of development are for the smart grid, for energy efficiency, for Feed-in Tariffs. In each of these energy policies, I will show specific examples on how the electric power lobby has interfered, is interfering, and will interfere with progress.

In the first example, the promoters of the state energy efficiency policies might be able to show that by developing their project to the fullest extent, the policy suggested will reduce electric power on the demand side, by say 40% in buildings, other things being equal. However, the supply side of the electricity market will show the overexpansion, mentioned above, that has been hidden to the public by keeping too long the obsolete Investor Owned Utilities Architecture Framework based energy policy. It should be clear that the powerful power industry lobby is going to fight the project.

The second example, is introduced through the EWPC post Handling Risk Management and Living System Smart Grid Stillborn Threats, that shows how the power industry lobby already exerted its power (also pun intended) on the architecture of the electric power industry by developing a system-of-systems approach that keeps their status quo intact. It is only now that the problems of the intervention are surfacing as a threat to the smart grid.

The third and last example can be seen in the EWPC post “Forget Monopoly Feed-In-Tariffs to Start Learning About Competitive Buy-Back Spot Prices, that“completely supersedes the http://www.greentechmedia.com/ article Feed-In Tariffs Can Spur Disruptive Growth: California is studying a new incentive that could grow renewables—and change everything about the state’s energy supply in the process.” The powerful electric power industry lobby is already at work.

Best regards,

José Antonio Vanderhorst-Silverio, Ph.D. - LinkedIn

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