domingo, julio 08, 2012

Systemic leverage to economies doesn't depend on climate change

In response to the article Systemic leverage to economies via their electric link, I received a private comment (see below), which I think deserves a public response by itself.

My response to the private comment was: "Thank you very much for the video. It shows the big bet that Europe’s politicians seems to be making. Systemic leverage to economies is valuable on either generation scenario: a lot of gas or a lot of renewable resources."

As a complement, I repeat now the first comment under the post What Would Steve Jobs Do About Energy Innovation? that says:

Under the Technology Review article one person disagreed with my suggestion. To get a better understanding of the approach, next is my response:

Thank you very much for your inquiry. What I am suggesting is that the real cause is bad electricity regulation (the same may apply to gas and water networks) designed to protect the PSQ. Think there are two sequential stages of energy innovation: the first to upgrade the power industry as a whole to the digital revolution and the second to introduce new energy technologies.

Because of the bad electricity regulation enacted in the Energy Policy Act of 1992, the small systemic changes introduced under the name of deregulation produced huge value destruction, instead of the equally huge value creation that was expected, based on MIT's great research led by the giant late professor Fred C. Schweppe, as described in the book Spot Pricing of Electricity. Schweppe's warnings about the deregulation in the making were not considered because of the PSQ.

An example of the value destruction can be found in [the] post that is carried by the tweet:

@YoQPagoTolaLu: FERC's Order 1000 as a Potential Example of Over-Regulated America #EWPC

Similarly, to see an example of value creation look at the post that is carried out by the tweet:

@gmh_upsa: Will Germany be the First Country to Adopt the #EWPC-AF?

The private comment included a 4 minute video and said: "Fast forward to the second half of this - it is very pertinent to the topic (sound on).Idealism can be put ahead of economies by the zealots, but without a sound economy, nothing can succeed, and nations will regress."

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