lunes, marzo 21, 2016

A Strong IEEE Coalition Might be Required to Start Transforming the Power Industry Part 5 of 6

Jose Antonio Vanderhorst-Silverio | Jul 11, 2010

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Applying the IEEE tagline Advancing Technology for Humanity to the power (and maybe gas and water) grids is the mean to propose the need for a strong coalition to initiate a transformation for Advancing Grids for Customers. It is very urgent and important for the IEEE Smart Grid Group of LinkedIn to start a practical coalition in every way, as soon as possible, to advance this technology for humanity, since “IEEE is the only organization able to thoroughly provide the diversity of expertise, information, resources, and vision needed to realize the Smart Grid’s full promise and potential.” Relative to humanity, we IEEE members able to contribute should go the IEEE Code of Ethics to reflect if we like the person we have become.
A Strong IEEE Coalition Might be Required to Start Transforming the Power Industry Part 5 of 6
  
By José Antonio Vanderhorst-Silverio, Ph.D.
Creator of the EWPC-AF
Systemic Consultant: Electricity

First posted in the GMH Blog, on July 4th 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 tojavs@ieee.org to contact the author for any kind of engagement.
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In response, the 7th person … continuous… 

In Chapter 5 of the book Spot Pricing of Electricity, Schweppe and his colleagues gave us two deregulation warnings, that involved non-trivial matters and which were not followed up by the deregulation movement: a) "We believe the deregulation which considers only the supply side of the supply-demand equation is dangerous and could have very negative results" and b) “A second major difference between this chapter and most of the rest of deregulation literature lies in our concern that the economics and physical security of the power systems not be destroyed or compromised.”

As you explained organized wholesale markets still give us very negative results. They considered First Generation Retailers (1GR) which do not feedback to the supply-demand equation (think elasticity) and to make things worst they enabled the flawed deregulation policy of economic first, system reliability second (E1R2). In order not to destroy or compromise the economics and physical security of the power system, the EWPC policy of system reliability first, economic second (R1E2) is assume. That R1E2 policy is reflected in the T&D Grid side primacy over the Enterprise side of the EWPC-AF.

By the way, I had almost forgotten about the McKinsey paper "Why electricity markets go haywire: Generators, retailers, customers, and regulators alike must get used to the idea that electricity is a special kind of commodity." Consultants discovered the 2nd warning. It was in that paper that I first read in 2002 about Sweden’s lack of reserves as a result of the deregulation flaw. In order to make electricity a regular commodity you need the EWPC-AF.

Please also consider the October 2007 EWPC post Switching Retailers is NOT as Important  that was written before the EWPC-AF had been named as such. While I suggest that you read the whole post, which also mentions switching suppliers in Sweden, I like to quote a paragraph out of its whole context that says “While under E1R2 deregulation it was though that switching 1GR is a good measure of “efficiency,” under R1E2 switching is not important at all, since many customers will find a market mix that satisfies best its requirements for insured electricity for the future. Electricity contracts are similar to insurance contracts, in which customer protection will be done by prudential regulations.”

As a result, I now rewrite that as under the EWPC-AF “switching is not important at all, since many customers will find a market mix that satisfies best its requirements to” align retail rates with energy efficiency and demand response objectives.” It is precisely that flawed deregulation policy that should be accounted for that billions of pounds value destruction in the UK, as well as in Sweden and other locations in billions of additional currencies.

Thank you very much for helping make the urgency case for EWPC-AF, since venture capitalist know that good money should not be thrown after bad. Now is a great timing to shift course by creating the EWPC-AF coalition.

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