Cortesía de Luís Arthur
La renovación de los contadores de la luz se alargará varios años
• La CNE dirá en 5 meses cuáles son los plazos y el método para cambiar 22 millones de medidores
• Los clientes disponen hasta junio para solicitar las nuevas tarifas con discriminación horaria
AGUSTÍ SALA
BARCELONA
El ministerio de Industria ha encargado a la Comisión Nacional de Energía (CNE) un plan para repartir en varios años la renovación de los más 22 millones de contadores de la luz que hay que cambiar en España. La modificación del parque está recogida en una disposición del decreto de tarifas para el 2007 y establece que en junio se inicie el cambio. Pero tanto el sector eléctrico como la Administración admiten que tal revolución no puede llevarse a cabo de golpe, ni puede ser asumida por la industria, según portavoces oficiales.La CNE deberá tener listo su informe en unos cinco meses y en el mismo tendrá que establecer unos plazos (número y tipo de unidades por año) en función de si se trata de aparatos ya amortizados o no, según fuentes de Industria. "Lo lógico será empezar por los más anticuados", explican en el Gobierno. Una buena parte del parque es de alquiler, que paga el usuario a través de una cuota en su recibo de la luz, según fuentes de la patronal eléctrica Unesa.Los nuevos contadores permiten la discriminación horaria de las medidas y la telelectura y telegestión, es decir, que la compañía pueda gestionar datos desde sus oficinas. El cambio ha empezado con las nuevas edificaciones y con los nuevos contratos, según Industria. Existen varios fabricantes en el mercado que disponen de la tecnología para abastecer al mercado de este tipo de contadores, como la catalana Circutor o la alemanas Siemens y Schlumberger, afirman los expertos.
COMUNICACIÓN
Según establece el decreto, los consumidores deben comunicar a sus distribuidoras (Endesa, Iberdrola, etcétera.) antes de junio próximo si desean acogerse a las nuevas tarifas con discriminación horaria y las compañías deberán cambiar los contadores para adaptarlos. Si no se produce esa comunicación del cliente, la compañía aplicará a partir de junio la nueva tarifa sin discriminación horaria.El nuevo sistema con cinco tramos de consumo doméstico --hasta los 15 kilovatios-- que entró en vigor el pasado 1 de enero establece dos franjas de tarifa al día: un horario punta de 10 horas y otro valle --más económico-- de 14 horas al día. El tramo más caro en invierno es de 11 a 21 horas y la parte del día calificada de valle, de 0 a 11 horas. En verano, el tramo de horario punta será de 12 a 22 y el valle, de 0 a 12 y de 22 a 24 horas. La antigua tarifa nocturna era de 23 a 7 horas. El consumo en las horas valle supondrá un ahorro del 47%. Durante el resto del día sufre un recargo del 35%.
CLIENTE ANTIGUOS
Un portavoz de Endesa explicó que las compañías disponen de tres meses para cambiar la nomenclatura de las facturas. Analizarán las fórmulas para adaptar los contadores de los clientes que disponen de la antigua tarifa nocturna, inexistente como tal desde diciembre pasado.Las dudas afectan al resto de usuarios, ya que "incluso está por definir el tipo de contador" que habrá que instalar, explica un portavoz de Unesa. Tampoco se ha determinado cómo se repercutirán los costes, según las compañías. Emili Rousaud, director general de Factorenergía, destaca que las normas, en todo caso, acabarán con las tarifas estimadas --las que la compañía establece si no ha leído el contador-- ,y darán un impulso a la gestión de la demanda y al ahorro energético.
LA LECTURA
La lectura de contador es aún negocio para las eléctricas. Las distribuidoras cobran por ley el servicio de lectura de contador a las operadoras que suministran a usuarios del mercado liberalizado. En el caso de los grandes clientes y pymes, que tienen contadores con telelectura, el servicio lo presta la comercializadora con la que firmaron el contrato. Sin embargo, la distribuidora de la zona le cobra a ésta 15 euros al mes si es un gran cliente y tres si es una pyme, explica Rousaud.
martes, enero 30, 2007
jueves, enero 18, 2007
(Auto) Entrevista Hipotética de Diario Libre al Dr. Vanderhorst Silverio
Yo - José Antonio Vanderhorst Silverio - transformo el artículo Diario Libre: A.M. - Electricidad en una entrevista hipotética.
“Entrevista” en que José Antonio Vanderhorst Silverio, Ph.D. responde a Adriano Tejada de Diario Libre A.M.
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El Dr. Vanderhorst Silverio fue becado por la CDE en 1965 y se transfirió de la UASD a la Universidad de Cornell en febrero de 1966 a estudiar Ingeniería Eléctrica, recibiendo los títulos de la carrera en 1968; el Master de Ciencias en 1971 y el Ph.D en 1972. De esa fecha hasta 1985 y de 1988 al 1989 desempeñó crecientes posiciones en CDE hasta llegar a ser Director de Ingeniería y por último Director de Planificación. De 1990 a la fecha ha sido asesor en Metaldom. Paralelamente del 1973 al 1979 y del 1983 al 2001 desarrolló labor docente en INTEC, diseñó la Carrera de Ingeniería Eléctrica y fue el encargado de la misma por espacio de 15 años.
Nuestro entrevistado es el líder mundial indiscutible de la electricidad sin control de precios. La mayor parte de su trabajo está colocado en la Bitácora Digital del Grupo Millennium Hispaniola en la dirección http://grupomillenium.blogspot.com/ en la que aparece más de 1,600 notas, la mayoría sobre el sector electricidad.
En mayo del 2006, la prestigiosa revista IEEE Power & Energy Magazine le publicó el artículo “a Dominican strategy,” que describe las grandes ventajas que tiene la República Dominicana para dotar con elasticidad precio la demanda de electricidad. Esa es la base de una solución emergente para dotar de competencia el mercado eléctrico, resolver la perenne crisis y exportar bienes y servicios con el modelo resultante.
Diario Libre ¿Es serio el Gobierno con la situación de la electricidad? La mayoría de la gente diría que no y tiene casi cuarenta años de apagones para probarlo.
JAVS - La crisis de electricidad dominicana es compleja en exceso y ciertamente las cuatro décadas reflejan que se trata de falta de comprensión de la industria eléctrica de parte de los sucesivos gobiernos. Para complicar las cosas la aparición de tecnologías innovadoras para generar, almacenar y consumir electricidad en pequeña escala, complican aun más la situación. Sin embargo, la propia crisis trae consigo grandes oportunidades que con mi experiencia en la industria, mis investigaciones y mi dedicación he reconocido.
Lo que nos ha sucedido es similar a lo que sucede en la banca – no se ha sabido administrar el riesgo sistémico, que tiene una vertiente a corto plazo y otra a largo plazo. Los planes de expansión de los años 70 dejaron de cumplirse al tiempo que la demanda se expandió excesivamente.
Dado que el racionamiento tradicional de electricidad es altamente ineficiente – un racionamiento irracional - la solución emergente que presenté en marzo de este año en la Academia de Ciencias de la República Dominicana trata precisamente de un racionamiento racional que aumenta el valor de la electricidad para el país al máximo posible.
Diario Libre - Pero el Partido de la Liberación Dominicana llegó al poder en 1996 con el deliberado propósito de agarrar al toro por los cuernos. Propuso y logró que se aprobara una ley de capitalización de las empresas públicas, una de las cuales era la CDE, y puso en ejecución un proyecto con todas las bendiciones de expertos nacionales y extranjeros.
JAVS – Para esa fecha se me contrató a última hora para escribir uno de tres artículos de fondo – al cual puse toda mi experiencia y empeño y que completé en 6 semanas - sobre como resolver la crisis de electricidad, que supuse era para ser debatido, pero no ocurrió así. Le garantizo que no le ofrecí mis bendiciones al proyecto que pusieron en ejecución.
Diario Libre - El sistema propuesto y en ejecución ha sido un fracaso rotundo, pero nadie lo admite.
JAVS – En 1999 el Listín Diario me publicó una página completa con el título “Grito Patriótico por la Interdependencia Eléctrica,” donde dije. confirmando su pregunta anterior, entre otras cosas lo siguiente:
JAVS – Ese enfrentamiento persiste todavía y es el resultado de visiones CDE y de Capitalización. Mi visión que es distinta a esas dos es una visión emergente que ha estado disponible desde los años 80, pero que ha sido sofocada. Recientemente participé en unos intercambios en el periódico de Internet EnergyPulse en lo que denominé la guerra de los mercados, resultado mi diseño y arquitectura de mercado el ganador de esa fase de la competencia.
Diario Libre - Y el Gobierno cayó en la trampa de los subsidios, que se convirtió en la excusa de las empresas para justificar sus problemas. Hoy los subsidios son una carga insoportable.
JAVS – Como anticipé en 1999 la trampa es el resultado de la injerencia política en las empresas eléctricas.
Diario Libre - En lo único que el Gobierno se ha manejado bien es en las relaciones públicas. Mientras intenta negociar contratos sellados con siete llaves, presenta a los generadores como los malos de la película. Al mismo tiempo, negocia plantas en condiciones muy distintas a como las ofertó y subsidia a la población de bajos ingresos. Un bello retrato.
JAVS – No es factible resolver la crisis eléctrica dominicana con soluciones del pasado. Es necesario aprender del futuro emergente, algo que ya he realizado. La solución requiere abrir el mercado minorista de electricidad para integrar las soluciones individuales más eficientes, incrementando grandemente la coordinación y aprovechando los significativos ahorros resultantes que resultarán de la electricidad sin control de precios.
La solución transformará el sector eléctrico del principal obstáculo a las inversiones a convertirse en un imán a las mismas, haciendo de la electricidad sin control de precios nuestra marca-país.
Diario Libre - Mientras tanto, el país sigue exactamente con los mismos problemas: limitada generación, grandes pérdidas, un pesado subsidio y el mismo apagón.
JAVS – El país seguirá así, a menos que el interés nacional adopte la electricidad sin control de precios y desarrolle un diálogo generativo para definir el proceso de transición correspondiente. En un diálogo generativo todo el sistema está representado hablando y escuchando abiertamente, para conocer las interdependencias y encontrar soluciones sostenibles para la transición.
“Entrevista” en que José Antonio Vanderhorst Silverio, Ph.D. responde a Adriano Tejada de Diario Libre A.M.
--------
El Dr. Vanderhorst Silverio fue becado por la CDE en 1965 y se transfirió de la UASD a la Universidad de Cornell en febrero de 1966 a estudiar Ingeniería Eléctrica, recibiendo los títulos de la carrera en 1968; el Master de Ciencias en 1971 y el Ph.D en 1972. De esa fecha hasta 1985 y de 1988 al 1989 desempeñó crecientes posiciones en CDE hasta llegar a ser Director de Ingeniería y por último Director de Planificación. De 1990 a la fecha ha sido asesor en Metaldom. Paralelamente del 1973 al 1979 y del 1983 al 2001 desarrolló labor docente en INTEC, diseñó la Carrera de Ingeniería Eléctrica y fue el encargado de la misma por espacio de 15 años.
Nuestro entrevistado es el líder mundial indiscutible de la electricidad sin control de precios. La mayor parte de su trabajo está colocado en la Bitácora Digital del Grupo Millennium Hispaniola en la dirección http://grupomillenium.blogspot.com/ en la que aparece más de 1,600 notas, la mayoría sobre el sector electricidad.
En mayo del 2006, la prestigiosa revista IEEE Power & Energy Magazine le publicó el artículo “a Dominican strategy,” que describe las grandes ventajas que tiene la República Dominicana para dotar con elasticidad precio la demanda de electricidad. Esa es la base de una solución emergente para dotar de competencia el mercado eléctrico, resolver la perenne crisis y exportar bienes y servicios con el modelo resultante.
Diario Libre ¿Es serio el Gobierno con la situación de la electricidad? La mayoría de la gente diría que no y tiene casi cuarenta años de apagones para probarlo.
JAVS - La crisis de electricidad dominicana es compleja en exceso y ciertamente las cuatro décadas reflejan que se trata de falta de comprensión de la industria eléctrica de parte de los sucesivos gobiernos. Para complicar las cosas la aparición de tecnologías innovadoras para generar, almacenar y consumir electricidad en pequeña escala, complican aun más la situación. Sin embargo, la propia crisis trae consigo grandes oportunidades que con mi experiencia en la industria, mis investigaciones y mi dedicación he reconocido.
Lo que nos ha sucedido es similar a lo que sucede en la banca – no se ha sabido administrar el riesgo sistémico, que tiene una vertiente a corto plazo y otra a largo plazo. Los planes de expansión de los años 70 dejaron de cumplirse al tiempo que la demanda se expandió excesivamente.
Dado que el racionamiento tradicional de electricidad es altamente ineficiente – un racionamiento irracional - la solución emergente que presenté en marzo de este año en la Academia de Ciencias de la República Dominicana trata precisamente de un racionamiento racional que aumenta el valor de la electricidad para el país al máximo posible.
Diario Libre - Pero el Partido de la Liberación Dominicana llegó al poder en 1996 con el deliberado propósito de agarrar al toro por los cuernos. Propuso y logró que se aprobara una ley de capitalización de las empresas públicas, una de las cuales era la CDE, y puso en ejecución un proyecto con todas las bendiciones de expertos nacionales y extranjeros.
JAVS – Para esa fecha se me contrató a última hora para escribir uno de tres artículos de fondo – al cual puse toda mi experiencia y empeño y que completé en 6 semanas - sobre como resolver la crisis de electricidad, que supuse era para ser debatido, pero no ocurrió así. Le garantizo que no le ofrecí mis bendiciones al proyecto que pusieron en ejecución.
Diario Libre - El sistema propuesto y en ejecución ha sido un fracaso rotundo, pero nadie lo admite.
JAVS – En 1999 el Listín Diario me publicó una página completa con el título “Grito Patriótico por la Interdependencia Eléctrica,” donde dije. confirmando su pregunta anterior, entre otras cosas lo siguiente:
El tiempo puede haber convertido la capitalización en un fracaso. Por un celo que ahora resulta ser no sólo infundado, sino desfasado, el gobierno de la República Dominicana, representado por los poderes ejecutivo y legislativo, produjo una Ley de Reforma de la Empresa Pública que puede condenar a los dominicanos a seguir en una estrategia que no se ajusta a nuestras necesidades porque:Diario Libre - El Gobierno enfrentó primero la disparidad de criterios de algunos de los integrantes de su equipo eléctrico. A consecuencia de ello, se cometieron errores graves. Sin embargo, la política de apertura del mercado logró que muchos inversionistas se acogieran al clima e invirtieran. Lo que el Gobierno no pudo lograr fue que lo hicieran en un ambiente de competencia que beneficiara al público.
· mantiene la injerencia política en las empresas eléctricas, algo que no estaba en el modelo original boliviano donde el otro 50 por ciento pasaba a fondos de pensión privados;
· impide la participación de empresas dominicanas, por la forma en que se está reestructurando la CDE, ya que sólo empresas extranjeras pueden precalificar en los concursos;
· promueve innecesariamente intereses creados en la actividad de comercialización de electricidad, permitiendo que el monopolio de esa actividad se pueda prolongar más allá de lo prudente porque las concesiones de distribución pueden llegar hasta 40 años;
· separa innecesariamente las actividades correspondientes al monopolio natural de transporte (transmisión y distribución) de electricidad, que en el futuro deberán consolidarse, ya que se podrá generar electricidad a precios competitivos en cualquier parte de la red;
· concentra la atención en grandes centrales de generación, por lo que no está claro como van a participar las fuentes no convencionales de energía; y
· exige una mayor dotación en la Superintendencia de Electricidad, a consecuencia de tener que servir a todos los consumidores los que estos mismos tendrían que sufragar.
JAVS – Ese enfrentamiento persiste todavía y es el resultado de visiones CDE y de Capitalización. Mi visión que es distinta a esas dos es una visión emergente que ha estado disponible desde los años 80, pero que ha sido sofocada. Recientemente participé en unos intercambios en el periódico de Internet EnergyPulse en lo que denominé la guerra de los mercados, resultado mi diseño y arquitectura de mercado el ganador de esa fase de la competencia.
Diario Libre - Y el Gobierno cayó en la trampa de los subsidios, que se convirtió en la excusa de las empresas para justificar sus problemas. Hoy los subsidios son una carga insoportable.
JAVS – Como anticipé en 1999 la trampa es el resultado de la injerencia política en las empresas eléctricas.
Diario Libre - En lo único que el Gobierno se ha manejado bien es en las relaciones públicas. Mientras intenta negociar contratos sellados con siete llaves, presenta a los generadores como los malos de la película. Al mismo tiempo, negocia plantas en condiciones muy distintas a como las ofertó y subsidia a la población de bajos ingresos. Un bello retrato.
JAVS – No es factible resolver la crisis eléctrica dominicana con soluciones del pasado. Es necesario aprender del futuro emergente, algo que ya he realizado. La solución requiere abrir el mercado minorista de electricidad para integrar las soluciones individuales más eficientes, incrementando grandemente la coordinación y aprovechando los significativos ahorros resultantes que resultarán de la electricidad sin control de precios.
La solución transformará el sector eléctrico del principal obstáculo a las inversiones a convertirse en un imán a las mismas, haciendo de la electricidad sin control de precios nuestra marca-país.
Diario Libre - Mientras tanto, el país sigue exactamente con los mismos problemas: limitada generación, grandes pérdidas, un pesado subsidio y el mismo apagón.
JAVS – El país seguirá así, a menos que el interés nacional adopte la electricidad sin control de precios y desarrolle un diálogo generativo para definir el proceso de transición correspondiente. En un diálogo generativo todo el sistema está representado hablando y escuchando abiertamente, para conocer las interdependencias y encontrar soluciones sostenibles para la transición.
Diario Libre: A.M. - Electricidad
¿Es serio el Gobierno con la situación de la electricidad? La mayoría de la gente diría que no y tiene casi cuarenta años de apagones para probarlo.
Pero el Partido de la Liberación Dominicana llegó al poder en 1996 con el deliberado propósito de agarrar al toro por los cuernos. Propuso y logró que se aprobara una ley de capitalización de las empresas públicas, una de las cuales era la CDE, y puso en ejecución un proyecto con todas las bendiciones de expertos nacionales y extranjeros.
El sistema propuesto y en ejecución ha sido un fracaso rotundo, pero nadie lo admite.
El Gobierno enfrentó primero la disparidad de criterios de algunos de los integrantes de su equipo eléctrico. A consecuencia de ello, se cometieron errores graves. Sin embargo, la política de apertura del mercado logró que muchos inversionistas se acogieran al clima e invirtieran. Lo que el Gobierno no pudo lograr fue que lo hicieran en un ambiente de competencia que beneficiara al público.
Y el Gobierno cayó en la trampa de los subsidios, que se convirtió en la excusa de las empresas para justificar sus problemas. Hoy los subsidios son una carga insoportable.
En lo único que el Gobierno se ha manejado bien es en las relaciones públicas. Mientras intenta negociar contratos sellados con siete llaves, presenta a los generadores como los malos de la película. Al mismo tiempo, negocia plantas en condiciones muy distintas a como las ofertó y subsidia a la población de bajos ingresos. Un bello retrato.
Mientras tanto, el país sigue exactamente con los mismos problemas: limitada generación, grandes pérdidas, un pesado subsidio y el mismo apagón.
atejada@diariolibre.com
Pero el Partido de la Liberación Dominicana llegó al poder en 1996 con el deliberado propósito de agarrar al toro por los cuernos. Propuso y logró que se aprobara una ley de capitalización de las empresas públicas, una de las cuales era la CDE, y puso en ejecución un proyecto con todas las bendiciones de expertos nacionales y extranjeros.
El sistema propuesto y en ejecución ha sido un fracaso rotundo, pero nadie lo admite.
El Gobierno enfrentó primero la disparidad de criterios de algunos de los integrantes de su equipo eléctrico. A consecuencia de ello, se cometieron errores graves. Sin embargo, la política de apertura del mercado logró que muchos inversionistas se acogieran al clima e invirtieran. Lo que el Gobierno no pudo lograr fue que lo hicieran en un ambiente de competencia que beneficiara al público.
Y el Gobierno cayó en la trampa de los subsidios, que se convirtió en la excusa de las empresas para justificar sus problemas. Hoy los subsidios son una carga insoportable.
En lo único que el Gobierno se ha manejado bien es en las relaciones públicas. Mientras intenta negociar contratos sellados con siete llaves, presenta a los generadores como los malos de la película. Al mismo tiempo, negocia plantas en condiciones muy distintas a como las ofertó y subsidia a la población de bajos ingresos. Un bello retrato.
Mientras tanto, el país sigue exactamente con los mismos problemas: limitada generación, grandes pérdidas, un pesado subsidio y el mismo apagón.
atejada@diariolibre.com
lunes, enero 15, 2007
CDEEE completa renegociación del Acuerdo de Madrid
Radhamés Segura dice eso implica que costo de energía baje en un 25 por ciento
La Corporación Dominicana de Empresas Eléctricas Estatales -CDEEE- informó que completó el proceso de renegociación del Acuerdo de Madrid, lo que implicaría una disminución de un 25 por ciento en el costo de la energía.
Radhamés Segura, vicepresidente ejecutivo de la entidad, dijo que contrario a lo que se había dicho, la CDEEE fue la institución menos favorecida en el convenio en proporción a la potencia contratada en la capitalización.
Explicó que al momento del Acuerdo de Madrid, a la CDEEE le corresponde una mayor proporción de potencia contratada y se le asignan 490 megavatios."
Esto, contra 300 megavatios para Itabo y 350 megavatios para Haina", señaló.
Segura reveló que será construido un gaseoducto de gas natural desde AES Andrés, en Boca Chica hasta San Pedro de Macorís. Indicó también que para el 2007 la tarifa energética se mantendrá estable.
domingo, enero 14, 2007
Invitamos a Enaltecidos e Influyentes al Diálogo Generativo
Estimados amigos,
La nota Editorial Listín Diario: Don Juan, no se vaya trae un mensaje muy oportuno a los dominicanos más enaltecidos e influyentes que se origina en las impactantes expresiones de nuestro único y glorioso representante ante el Salón de la Fama del baseball organizado de las grandes ligas.
Solamente dos temas son tratados la violencia y el abuso en la sobrefacturación de la electricidad.
En el libro Cuentos Chinos de Openheimer encontré el círculo vicioso que reescribí como: aumenta la violencia, disminuye la estabilidad política, disminuye ingreso de capitales, disminuye la inversión, aumenta la pobreza, aumenta la marginalidad, aumenta la violencia,…
La modificación a la LGE se está haciendo bajo un pensamiento mecánico que no toma en cuenta que el sector eléctrico es el principal obstáculo a las inversiones en el país.
La propuesta innovadora de la electricidad sin control de precios pretende hacer que se el sector eléctrico se vuelva un imán a las inversiones, lo que ayudará a desarrollar el círculo virtuoso: aumenta la inversión, disminuye la pobreza, disminuye la marginalidad, disminuye la violencia, aumenta la estabilidad política, aumenta el ingreso de capitales, aumenta la inversión, …
Escribe Miguel Franjul, editorialista del Listín: “Hay que dejar los espacios en que nos han arrinconado con el miedo, y salir a las calles a dar el pecho y a oponerle a los delincuentes la fuerza mayor de la razón, del amor y de la paz.”
Como también escribe Franjul y reorientamos, “Ahora, más que nunca necesitamos a los más enaltecidos e influyentes, como un Juan Marichal, para que, emulando sus inolvidables momentos en el montículo, nos ayuden a colocar los strikes en el justo centro de nuestras dificultades, para que esta nación, como todo un equipo triunfador, salga adelante en esta contienda.”
Se sugiere encarecidamente a los más enaltecidos e influyentes a que apoyen y participen activamente, sin miedo alguno, en el diálogo generativo que sugiere el GMH y apoya el FORO ELECTRICO.
El conocimiento de la modificación a la LGE es el mejor momento para actuar. Esperamos que acepten la invitación para presionar al Estado Dominicano a impulsar, de una vez por todas, la solución definitiva a la prolongada crisis eléctrica.
Editorial Listín Diario: Don Juan, no se vaya
Lo que más necesita el país, de sus gentes, pero sobre todo de las más enaltecidas e influyentes, es que todos demos la batalla contra estos males
Don Juan Marichal, frustrado como centenares de dominicanos, ha estado pensando marcharse del país si sigue la violencia y el abuso en la sobrefacturación de la electricidad.
Razón tiene para este desaliento.
Pero, por favor, don Juan, no se nos vaya. Lo que más necesita el país, de sus gentes, pero sobre todo de las más enaltecidas e influyentes, es que todos demos la batalla contra estos males.
A la delincuencia hay que enfrentarla con energía, con actos supremos de coraje social, con medidas que ataquen puntualmente algunas de sus causas reales.
Hay que dejar los espacios en que nos han arrinconado con el miedo, y salir a las calles a dar el pecho y a oponerle a los delincuentes la fuerza mayor de la razón, del amor y de la paz.
Con la energía eléctrica, es preciso presionar al Gobierno para que no se deje engatusar por los que se han hecho multimillonarios a costa de unos contratos onerosos para el país que no garantizan un servicio confiable a los usuarios.
Ahora, más que nunca necesitamos a un Juan Marichal para que, emulando sus inolvidables momentos en el montículo, nos ayude a colocar los strikes en el justo centro de nuestras dificultades, para que esta nación, como todo un equipo triunfador, salga adelante en esta contienda.
No se vaya, don Juan, quédese con nosotros... aunque esta lucha se extienda a extrainnings.
sábado, enero 13, 2007
GMH Ayuda a Evitar que Sancochen la Modificación a la LGE
13 de enero, 2007. Del frente de guerra local.
Mientras la ESCP gana la guerra mundial de los mercados eléctricos, como se puede ver en la nota ESCP Gana Guerra Mundial de los Mercados Eléctricos, durante el día de ayer, 12 de enero de 2006, se escenificaron cruentas luchas en el frente de batalla local, entre las fuerzas de leales a la ESCP y los que querían sancochar modificación de la LGE. Para detalles de las acciones del GMH en el frente internacional, pueden ver la nota en inglés Memoria Reciente del Frente de Guerra.
Los ataques, dirigidos por Rolando Reyes y Bernardo Castellanos, aparentemente de las fuerzas del gobierno y de la contrarreforma ahora leales a la CDEEE, respectivamente, recibieron gran resistencia tanto del propulsor de la ESCP a ambos ataques, como de las fuerzas amigas al GMH a los ataque del segundo.
Después de un cañonazo personal de Bernardo al propulsor de la ESCP, para desconcertar al GMH, los amigos del GMH, primero Rhadamés García, y luego Américo Sánchez Díaz, lanzaron fuertes cohetes teledirigidos a las posiciones que estaban destinadas a favorecer el intento de sancochar la modificación de la LGE en la Cámara de Diputados.
El GMH agradece el apoyo brindado por el FORO ELECTRICO en una reunión previa a los enfrentamientos. Milton Tejeda hizo aportes importantes y oportunos tanto en conseguir copia electrónica de la modificación de la LGE, como en la redacción del comunicado, que a pesar de no ser difundido a la prensa, entendemos que llenó plenamente su cometido. Frank Castillo y César Félix también colaboraron en defensa de la ESCP. Puede que en los créditos estemos dejando importantes aportes de otros que también los merecen.
Una fuente vinculada al propio Presidente Fernández, que pidió no ser identificada, envió dos mensajes: el primero, para indicar que estaban al tanto de los intercambios; y el segundo, para congratular el esfuerzo, que había resultado en la extensión de la legislatura y el envío a comisión del proyecto de modificación de la LGE.
© 2007, José Antonio Vanderhorst Silverio, Ph.D.
Mientras la ESCP gana la guerra mundial de los mercados eléctricos, como se puede ver en la nota ESCP Gana Guerra Mundial de los Mercados Eléctricos, durante el día de ayer, 12 de enero de 2006, se escenificaron cruentas luchas en el frente de batalla local, entre las fuerzas de leales a la ESCP y los que querían sancochar modificación de la LGE. Para detalles de las acciones del GMH en el frente internacional, pueden ver la nota en inglés Memoria Reciente del Frente de Guerra.
Los ataques, dirigidos por Rolando Reyes y Bernardo Castellanos, aparentemente de las fuerzas del gobierno y de la contrarreforma ahora leales a la CDEEE, respectivamente, recibieron gran resistencia tanto del propulsor de la ESCP a ambos ataques, como de las fuerzas amigas al GMH a los ataque del segundo.
Después de un cañonazo personal de Bernardo al propulsor de la ESCP, para desconcertar al GMH, los amigos del GMH, primero Rhadamés García, y luego Américo Sánchez Díaz, lanzaron fuertes cohetes teledirigidos a las posiciones que estaban destinadas a favorecer el intento de sancochar la modificación de la LGE en la Cámara de Diputados.
El GMH agradece el apoyo brindado por el FORO ELECTRICO en una reunión previa a los enfrentamientos. Milton Tejeda hizo aportes importantes y oportunos tanto en conseguir copia electrónica de la modificación de la LGE, como en la redacción del comunicado, que a pesar de no ser difundido a la prensa, entendemos que llenó plenamente su cometido. Frank Castillo y César Félix también colaboraron en defensa de la ESCP. Puede que en los créditos estemos dejando importantes aportes de otros que también los merecen.
Una fuente vinculada al propio Presidente Fernández, que pidió no ser identificada, envió dos mensajes: el primero, para indicar que estaban al tanto de los intercambios; y el segundo, para congratular el esfuerzo, que había resultado en la extensión de la legislatura y el envío a comisión del proyecto de modificación de la LGE.
© 2007, José Antonio Vanderhorst Silverio, Ph.D.
ESCP Gana Guerra Mundial de los Mercados Eléctricos
EnergyPulse, 13 de enero 2007. Del frente de guerra internacional.
El pasado 11 de enero de 2007, terminó la guerra de los mercados eléctricos con una victoria de electricidad sin control de precios al cliente. Es una guerra que se inició en los años 80 dirigida por Fred C. Schweppe desde MIT y que perdió vigencia con su muerte en 1988 hasta finales del año 2005 cuando el GMH reinició los combates. En la última semana se desarrollaron las dos batallas finales de la guerra mundial de los mercados eléctricos con menor intensidad que la de la primera batalla “Jugando con Fuego,” en la cual hubo otros enfrentamiento adicionales.
Como se había reportado, el frente de batalla se movió primero al terreno debajo del artículo The Potential for Residential Demand Response on Transmission and Distribution Assets. La audiencia de Internet lo ha mirado 1,341 veces y consta de 15 comentarios a las 11:36 a.m. de esta fecha. Las escaramuzas fueron libradas por el Dr. José Antonio Vanderhorst Silverio, Ph.D, de parte de la ESCP, y por los expertos energéticos Roger Arnold y Len Gould. El ataque de Arnold había sido ya repelido con una sola nota. Los insistentes ataques de Gould, en ambos frentes de batalla, en defensa de su switchboard (central de conmutación) IMEUC y en contra de los precios marginales locacionales (LMP, por sus siglas en inglés) fueron repelidos.
A pesar de la estrategia de los que se encontraron perdidos, para restringir los enfrentamientos debajo del artículo Playing with Fire – Part II al tema al gas natural y así no pelear la guerra de los mercados eléctricos a la luz pública, insistieron en que la guerra siguiera debajo del artículo Playing with Fire - The 10 Tcf/year Supply Gap -- Part I, que ya había cumplido su cometido.
No obstante, Vanderhorst-Silverio colocó una nota debajo de Playing with Fire – Part II, para asegurar que la Guerra había terminado a favor de la ESCP. James Carson ignoró ese ataque y al que le siguió que fue más potente y demostró sin lugar a dudas que la guerra podía seguir. Carson regresó al primer frente con nuevos ataques que fueron repelidos, uno de los cuales sirvió para abrir la batalla final en el segundo frente y ganar la guerra. Las acciones de Banks que defiende a rajatabla el Modelo I, pasaron de ser cada vez menos agresivas a ser respetuosas a la emergente ESCP. Esta segunda y posiblemente última batalla “jugando con fuego,” se libró ante una audiencia de Internet que lo ha mirado 4,516 veces y que consta de 64 comentarios a las 1:00 p.m. de esta fecha.
El último ataque de la ESCP fue precedido por la presentación de los escenarios “jugando con fuego” y “apagando el fuego,” que representan los caminos del Modelo 2 a ser evitado y el de la ESCP a ser promovido, respectivamente. Rozenstock lo consideró como un ataque injusto, en contra de los intereses creados en la industria eléctrica, que no tenía sentido, argumentando que el sacrificio debería ser compartido con otros sectores de la economía. Los lectores no deben dejar de leer la nota A Generative Dialogue Without Illusions Part 20, que infiere la estocada mortal a los intereses creados y donde queda bien claro que el único sacrificio lo han experimentado los clientes más pequeños en muchas partes del mundo, debido a la extensión por más de una década del obsoleto negocio de las distribuidoras comercializadoras basado en ganarle casos tarifarios a los reguladores.
Podemos concluir que el Modelo #3, la electricidad sin control de precios (ESCP), ha ganado la guerra. Los mercados contendores Modelo #1, el viejo mercado de integración vertical, y Modelo #2, la liberación defectuosa de mercado, basada en el acceso abierto a transmisión y la carga “nativa,” han resultado perdedores. El monopolio de comercialización de las distribuidoras a los clientes regulados tiene sus días contados. Centremos todo el esfuerzo en el proceso de transición hacia la ESCP.
© 2007, José Antonio Vanderhorst-Silverio, Ph.D.
El pasado 11 de enero de 2007, terminó la guerra de los mercados eléctricos con una victoria de electricidad sin control de precios al cliente. Es una guerra que se inició en los años 80 dirigida por Fred C. Schweppe desde MIT y que perdió vigencia con su muerte en 1988 hasta finales del año 2005 cuando el GMH reinició los combates. En la última semana se desarrollaron las dos batallas finales de la guerra mundial de los mercados eléctricos con menor intensidad que la de la primera batalla “Jugando con Fuego,” en la cual hubo otros enfrentamiento adicionales.
Como se había reportado, el frente de batalla se movió primero al terreno debajo del artículo The Potential for Residential Demand Response on Transmission and Distribution Assets. La audiencia de Internet lo ha mirado 1,341 veces y consta de 15 comentarios a las 11:36 a.m. de esta fecha. Las escaramuzas fueron libradas por el Dr. José Antonio Vanderhorst Silverio, Ph.D, de parte de la ESCP, y por los expertos energéticos Roger Arnold y Len Gould. El ataque de Arnold había sido ya repelido con una sola nota. Los insistentes ataques de Gould, en ambos frentes de batalla, en defensa de su switchboard (central de conmutación) IMEUC y en contra de los precios marginales locacionales (LMP, por sus siglas en inglés) fueron repelidos.
A pesar de la estrategia de los que se encontraron perdidos, para restringir los enfrentamientos debajo del artículo Playing with Fire – Part II al tema al gas natural y así no pelear la guerra de los mercados eléctricos a la luz pública, insistieron en que la guerra siguiera debajo del artículo Playing with Fire - The 10 Tcf/year Supply Gap -- Part I, que ya había cumplido su cometido.
No obstante, Vanderhorst-Silverio colocó una nota debajo de Playing with Fire – Part II, para asegurar que la Guerra había terminado a favor de la ESCP. James Carson ignoró ese ataque y al que le siguió que fue más potente y demostró sin lugar a dudas que la guerra podía seguir. Carson regresó al primer frente con nuevos ataques que fueron repelidos, uno de los cuales sirvió para abrir la batalla final en el segundo frente y ganar la guerra. Las acciones de Banks que defiende a rajatabla el Modelo I, pasaron de ser cada vez menos agresivas a ser respetuosas a la emergente ESCP. Esta segunda y posiblemente última batalla “jugando con fuego,” se libró ante una audiencia de Internet que lo ha mirado 4,516 veces y que consta de 64 comentarios a las 1:00 p.m. de esta fecha.
El último ataque de la ESCP fue precedido por la presentación de los escenarios “jugando con fuego” y “apagando el fuego,” que representan los caminos del Modelo 2 a ser evitado y el de la ESCP a ser promovido, respectivamente. Rozenstock lo consideró como un ataque injusto, en contra de los intereses creados en la industria eléctrica, que no tenía sentido, argumentando que el sacrificio debería ser compartido con otros sectores de la economía. Los lectores no deben dejar de leer la nota A Generative Dialogue Without Illusions Part 20, que infiere la estocada mortal a los intereses creados y donde queda bien claro que el único sacrificio lo han experimentado los clientes más pequeños en muchas partes del mundo, debido a la extensión por más de una década del obsoleto negocio de las distribuidoras comercializadoras basado en ganarle casos tarifarios a los reguladores.
Podemos concluir que el Modelo #3, la electricidad sin control de precios (ESCP), ha ganado la guerra. Los mercados contendores Modelo #1, el viejo mercado de integración vertical, y Modelo #2, la liberación defectuosa de mercado, basada en el acceso abierto a transmisión y la carga “nativa,” han resultado perdedores. El monopolio de comercialización de las distribuidoras a los clientes regulados tiene sus días contados. Centremos todo el esfuerzo en el proceso de transición hacia la ESCP.
© 2007, José Antonio Vanderhorst-Silverio, Ph.D.
Memoria Reciente del Frente de Guerra
Para ver la memoria de los ataques y defensas del GMH, hasta las 1:41 p.m. del 13 de enero de 2007, antes las embestidas de los contrarios, pueden ver las todas las acciones debajo de cada frente de batalla o pueden ver las últimas acciones libradas por el GMH en las notas publicadas en la Bitácora Digital:
Frente de batalla debajo del artículo The Potential for Residential Demand Response on Transmission and Distribution Assets:
Demand Response Under EWPC Part 5
Demand Response Under EWPC Part 4
Demand Response Under EWPC Part 3
Demand Response Under EWPC Part 2
Frente de batalla debajo del artículo Playing with Fire – Part II:
A Generative Dialogue Without Illusions Part 20
A Generative Dialogue Without Illusions Part 19
A Generative Dialogue Without Illusions Part 18
A Generative Dialogue Without Illusions Part 18
A Generative Dialogue Without Illusions Part 17
A Generative Dialogue Without Illusions Part 16
A Generative Dialogue Without Illusions Part 15
A Generative Dialogue Without Illusions Part 14
A Generative Dialogue Without Illusions Part 13
A Generative Dialogue Without Illusions Part 12
A Generative Dialogue Without Illusions Part 11
A Generative Dialogue Without Illusions Part 10
Frente de batalla debajo del artículo The Potential for Residential Demand Response on Transmission and Distribution Assets:
Demand Response Under EWPC Part 5
Demand Response Under EWPC Part 4
Demand Response Under EWPC Part 3
Demand Response Under EWPC Part 2
Frente de batalla debajo del artículo Playing with Fire – Part II:
A Generative Dialogue Without Illusions Part 20
A Generative Dialogue Without Illusions Part 19
A Generative Dialogue Without Illusions Part 18
A Generative Dialogue Without Illusions Part 18
A Generative Dialogue Without Illusions Part 17
A Generative Dialogue Without Illusions Part 16
A Generative Dialogue Without Illusions Part 15
A Generative Dialogue Without Illusions Part 14
A Generative Dialogue Without Illusions Part 13
A Generative Dialogue Without Illusions Part 12
A Generative Dialogue Without Illusions Part 11
A Generative Dialogue Without Illusions Part 10
Demand Response Under EWPC Part 5
On January 11th, 2006, I posted the following message under the article The Potential for Residential Demand Response on Transmission and Distribution Assets to respond to Len Gould:
Len had Gould said:
AMR or whatever subsystem it evolves to also comes in different flavors. Retail business design innovations depend on the whole customer interface.
Len had Gould said:
Given that every customer will still need a meter anyway, AMR is going to happen regardless of market design, and bills still need to be transmitted and collected in any system; THEN I fail to see how IMEUC might pose any impediment to your retailers business design innovations. I proposed the market manager making longterm contracts for eg. baseload etc. only because I don't think many private "retailers" will, but see no reason to bar them from doing so and using the metering system to verify their transactions.
Demand Response Under EWPC Part 4
On January 11th, 2006, I posted the following message under the article The Potential for Residential Demand Response on Transmission and Distribution Assets:
Len, if every customer is not allowed to participate, then is not a switchboard. That is a centralized market. I see the problem in the central market.
The retailer might purchase part of his long run needs by contract with a plurality of suppliers - generators - and the remainder from the central spot market. The innovations come from competition not by imposition.
The customer contracts with the retailer not the provider. Should a retailer enter into a contract regardless of the provider’s price, its days are counted under competition. The IMEUC is a metering monopoly that is a barrier for retailer’s business design innovations.
Len, if every customer is not allowed to participate, then is not a switchboard. That is a centralized market. I see the problem in the central market.
The retailer might purchase part of his long run needs by contract with a plurality of suppliers - generators - and the remainder from the central spot market. The innovations come from competition not by imposition.
The customer contracts with the retailer not the provider. Should a retailer enter into a contract regardless of the provider’s price, its days are counted under competition. The IMEUC is a metering monopoly that is a barrier for retailer’s business design innovations.
A Generative Dialogue Without Illusions Part 20
On January 11th, 2006, I posted the following message under the article Playing with Fire – Part II:
Thanks Mr. Rosenstock for your useful response that allows me to explain, as you will see, why my suggestion makes a lot of sense.
As a promoter of a generative dialogue, I also enjoy the free exchanges of ideas, especially to learn about what has been emerging for electricity customers since the 80's, when Fred C. Schweppe led the development of Spot Pricing of Electricity at MIT.
Faulty deregulation - Model 2 – overextended the useful life of the utility business model – how to win cases to the regulator - and fragmented the transportation system, by placing a tough barrier to Schweppes’s homeostatic utility control, as is explained in the post A Generative Dialogue Without Illusions Part 7. The so called “native” load is a barrier to the development of the resources on the demand side. That is the main reason of the decade old debate, as those resources remain mostly undeveloped.
Hence, there will be no such sacrifice for those vested interests, as they have more that a decade of advantage. The sacrificed have been the little guys, not just in the U.S., but all over the world. “Deregulation, as explained in 2001 was designed as a scam. Donella Meadows got it very close to its essence in the article Restructuring and Faith in the Market. She said:
To further justify immediate action, I repeat what I said on 10.3.06, under the article Divorcing Electricity Sales from Profits Creates Win-Win for Utilities and Customers:
I suggest reading what Walter Wriston, chairman of Citicorp said in 1981 about the rights of inherited markets (see Megatrends: ten new directions transforming our lives, by John Naisbitt). That was the lesson of the railroads - a very capital intensive business that didn’t know it was on the business of transportation.
Under EWPC, retail business design innovators will be on the business of electric energy service - light, heat, conditioned air, etc. - which is right after the customer end-use devices. Vested interest should start learning that they will be like the railroads very soon, as EWPC – the wining market model - gets developed and implemented.
© 2007, José Antonio Vanderhorst Silverio, Ph.D.
Thanks Mr. Rosenstock for your useful response that allows me to explain, as you will see, why my suggestion makes a lot of sense.
As a promoter of a generative dialogue, I also enjoy the free exchanges of ideas, especially to learn about what has been emerging for electricity customers since the 80's, when Fred C. Schweppe led the development of Spot Pricing of Electricity at MIT.
Faulty deregulation - Model 2 – overextended the useful life of the utility business model – how to win cases to the regulator - and fragmented the transportation system, by placing a tough barrier to Schweppes’s homeostatic utility control, as is explained in the post A Generative Dialogue Without Illusions Part 7. The so called “native” load is a barrier to the development of the resources on the demand side. That is the main reason of the decade old debate, as those resources remain mostly undeveloped.
Hence, there will be no such sacrifice for those vested interests, as they have more that a decade of advantage. The sacrificed have been the little guys, not just in the U.S., but all over the world. “Deregulation, as explained in 2001 was designed as a scam. Donella Meadows got it very close to its essence in the article Restructuring and Faith in the Market. She said:
…electricity restructuring is not being driven by the goal of reducing residential rates. The drivers are technology and industry. New ways of making electricity, such as combined-cycle natural gas generators, and soon fuel cells, allow industrial users to produce their own power at lower cost and with less pollution. One by one they are slipping off the grid, leaving the utilities, with their huge, outmoded, unpaid-for power plants, in a panic.
To save themselves, the power companies meet in back rooms with politicians. They must accomplish three things. First, they must allow big customers to lock in low rates, so they will stay on the grid. Second, they must pay off the debt for their dinosaur plants. Third, they must sell the deal to the public by promising lower rates.The only way to pull off this miracle is with a public bail-out, called "stranded costs" in the back rooms. Stranded cost payments mean that your electric bill will actually be higher, but a chunk of it will be hidden in your tax bill. This maneuver has nothing to do with a free market. It is perverse socialism. Prop up a dying industry by forcing the people to pay for bad investments. Order utilities to cut rates for awhile to lull taxpayers. Then let the people shop for power in competition with the big guys. That's where the market will come in, but markets aren't kind to little players competing against big ones.
To further justify immediate action, I repeat what I said on 10.3.06, under the article Divorcing Electricity Sales from Profits Creates Win-Win for Utilities and Customers:
I suggest reading what Walter Wriston, chairman of Citicorp said in 1981 about the rights of inherited markets (see Megatrends: ten new directions transforming our lives, by John Naisbitt). That was the lesson of the railroads - a very capital intensive business that didn’t know it was on the business of transportation.
Under EWPC, retail business design innovators will be on the business of electric energy service - light, heat, conditioned air, etc. - which is right after the customer end-use devices. Vested interest should start learning that they will be like the railroads very soon, as EWPC – the wining market model - gets developed and implemented.
© 2007, José Antonio Vanderhorst Silverio, Ph.D.
A Generative Dialogue Without Illusions Part 19
On January 11th, 2006, I posted the following message under the article Playing with Fire – Part II:
Steven has given some of the elements to be considered in a scenario - named playing with fire - centered on Model 2 to protect vested interest in electric power. I think it will be a plausible scenario to be avoided. Environmental pressures are denied; holocaust is an issue, etc.
Another scenario based on EWPC should be written, whose elements are in Part I and II of Playing with Fire. The EWPC for the customer scenario - named putting out the fire - should be promoted. The resources of the demand side, including energy efficiency, demand response, CHP-waste heat heating , hybrid cars and other distributed resources, should have the same opportunities as central stations by taking down the "native" load barrier. Environmental pressures are acepted; holocaust is not an issue, etc.
Steven has given some of the elements to be considered in a scenario - named playing with fire - centered on Model 2 to protect vested interest in electric power. I think it will be a plausible scenario to be avoided. Environmental pressures are denied; holocaust is an issue, etc.
Another scenario based on EWPC should be written, whose elements are in Part I and II of Playing with Fire. The EWPC for the customer scenario - named putting out the fire - should be promoted. The resources of the demand side, including energy efficiency, demand response, CHP-waste heat heating , hybrid cars and other distributed resources, should have the same opportunities as central stations by taking down the "native" load barrier. Environmental pressures are acepted; holocaust is not an issue, etc.
A Generative Dialogue Without Illusions Part 18
On January 9th, 2006, I posted the following message under the article Playing with Fire – Part II:
Part 2 of 2.
Locational “marginal” prices come in many flavors. This is what the paper mentioned by Len says “LMP is still a new model and only time will definitively demonstrate its successes or failures. LMP will probably never be a perfect solution for all wholesale market concerns. It has its limitations. At this time, LMP is largely a supply-side focused approach to organized markets. Integration of demand-side factors to such issues as transmission congestion or generation shortages remains to be considered.
There is another flavor in the article Demand Response and the FERC Standard Market Design NOPR:
Part 2 of 2.
Locational “marginal” prices come in many flavors. This is what the paper mentioned by Len says “LMP is still a new model and only time will definitively demonstrate its successes or failures. LMP will probably never be a perfect solution for all wholesale market concerns. It has its limitations. At this time, LMP is largely a supply-side focused approach to organized markets. Integration of demand-side factors to such issues as transmission congestion or generation shortages remains to be considered.
There is another flavor in the article Demand Response and the FERC Standard Market Design NOPR:
There is still another flavor under EWPC, which will be much better than what was though for the SMD, as the system engineering institution satisfies the ultraquality requirements. Retailers will concentrate no on lower prices to customers, but on lower costs and/or higher value, as business designs innovations will aim to that. Most of the customers will – eventually - have lower prices. However, customers that are receiving energy cross-subsidies and/or hidden supply security cross-subsidies might have higher prices later on.Demand Response, Locational Marginal Pricing, and Centralized Markets
In the proposed Standard Market Design (SMD), the key elements that would encourage demand response are locational marginal pricing (LMP) and the establishment of centralized day-ahead and real-time markets for energy, ancillary services, and transmission services. LMP and centralized markets provide efficient wholesale price signals to which LSEs and customers might respond if retail market designs allow such response. Over the longer term, LMP and centralized markets will lead to more efficient investment in generation, transmission and demand response technology, resulting in lower costs and ultimately lower prices to
consumers.
LMP will allow demand response to play a role in relieving transmission constraints, both in the short and the long term, by communicating the cost of electricity service to customers. Locational marginal prices are the only prices that are consistent with efficient system dispatch, and they are the only prices that induce self-interested loads to consume efficient quantities of power and profit-maximizing generators to produce efficient quantities of power.
A Generative Dialogue Without Illusions Part 18
On January 9th, 2006, I posted the following message under the article Playing with Fire – Part II:
Part 2 of 2.
Locational “marginal” prices come in many flavors. This is what the paper mentioned by Len says “LMP is still a new model and only time will definitively demonstrate its successes or failures. LMP will probably never be a perfect solution for all wholesale market concerns. It has its limitations. At this time, LMP is largely a supply-side focused approach to organized markets. Integration of demand-side factors to such issues as transmission congestion or generation shortages remains to be considered.
There is another flavor in the article Demand Response and the FERC Standard Market Design NOPR:
Part 2 of 2.
Locational “marginal” prices come in many flavors. This is what the paper mentioned by Len says “LMP is still a new model and only time will definitively demonstrate its successes or failures. LMP will probably never be a perfect solution for all wholesale market concerns. It has its limitations. At this time, LMP is largely a supply-side focused approach to organized markets. Integration of demand-side factors to such issues as transmission congestion or generation shortages remains to be considered.
There is another flavor in the article Demand Response and the FERC Standard Market Design NOPR:
There is still another flavor under EWPC, which will be much better than what was though for the SMD, as the system engineering institution satisfies the ultraquality requirements. Retailers will concentrate no on lower prices to customers, but on lower costs and/or higher value, as business designs innovations will aim to that. Most of the customers will – eventually - have lower prices. However, customers that are receiving energy cross-subsidies and/or hidden supply security cross-subsidies might have higher prices later on.Demand Response, Locational Marginal Pricing, and Centralized Markets
In the proposed Standard Market Design (SMD), the key elements that would encourage demand response are locational marginal pricing (LMP) and the establishment of centralized day-ahead and real-time markets for energy, ancillary services, and transmission services. LMP and centralized markets provide efficient wholesale price signals to which LSEs and customers might respond if retail market designs allow such response. Over the longer term, LMP and centralized markets will lead to more efficient investment in generation, transmission and demand response technology, resulting in lower costs and ultimately lower prices to
consumers.
LMP will allow demand response to play a role in relieving transmission constraints, both in the short and the long term, by communicating the cost of electricity service to customers. Locational marginal prices are the only prices that are consistent with efficient system dispatch, and they are the only prices that induce self-interested loads to consume efficient quantities of power and profit-maximizing generators to produce efficient quantities of power.
A Generative Dialogue Without Illusions Part 17
On January 9th, 2006, I posted the following message under the article Playing with Fire – Part II:
Hi Fred and Len,
Good points Fred about what is known. As far I know, this is what is emerging with EWPC.
Part 1 of 2.
In what I posted today, when I said “To mitigate congestion and price spikes - both of which signal whole system risk of failure - ultraquality is needed based on both resources of the supply side and on the demand side,” should be sufficient to take care, together with no/nonsense prudential regulation, in disallowed that “the seller … achieve a high price by deliberately under-investing and driving up marginal cost…”
Electricity reform is a very complex problem and as such it can only be useful in a generative dialogue, where insights are placed on the right spot to solve the puzzle. On important insight about EWPC is emerging as central generation is being displaced from center stage.
In a post to both of you, on 11.23.06, under the article AMI Services Solutions for Alberta's Deregulated Market, by Nick Clark, I said:
Hi Fred and Len,
Good points Fred about what is known. As far I know, this is what is emerging with EWPC.
Part 1 of 2.
In what I posted today, when I said “To mitigate congestion and price spikes - both of which signal whole system risk of failure - ultraquality is needed based on both resources of the supply side and on the demand side,” should be sufficient to take care, together with no/nonsense prudential regulation, in disallowed that “the seller … achieve a high price by deliberately under-investing and driving up marginal cost…”
Electricity reform is a very complex problem and as such it can only be useful in a generative dialogue, where insights are placed on the right spot to solve the puzzle. On important insight about EWPC is emerging as central generation is being displaced from center stage.
In a post to both of you, on 11.23.06, under the article AMI Services Solutions for Alberta's Deregulated Market, by Nick Clark, I said:
Most electric power reforms are unstable. For example, European market liberalization will run into a wall if distribution is kept separate from transmission and let generators exercise and abuse market power. Market power is neutralized by keeping a T&D only wires monopoly that assures long run and short physical risk management. In the new paradigm center stage changes from generation to the T&D infrastructure.
The result will be a robust, complete and fully functional non-real time market that does not interferes with real time power system operation, as the T&D (engineering) system operator takes charge of committed resources on the supply and demand side… I like to see competing paradigms that are also emerging.
A Generative Dialogue Without Illusions Part 16
On January 9th, 2006, I posted the following message under the article Playing with Fire – Part II:
LRMC works when your have an adapted system. Things like congestion and price spikes make a lot of noise and the expected value of short run deviates a lot from long run values. To mitigate congestion and price spikes - both of which signal whole system risk of failure - ultraquality is needed based on both resources of the supply side and on the demand side.
The dimension of the demand side, however, is well undeveloped. So, EWPC innovation opportunities abound in the demand side, which definetly should include differentiated customers interruption costs, and not only the power bill in the rationing optimization. That is how the whole system - not its parts - is adapted to resolve both the stability of output prices and recovering of capital costs, by making the expected value of short run marginal costs get closer to the long run marginal costs.
LRMC works when your have an adapted system. Things like congestion and price spikes make a lot of noise and the expected value of short run deviates a lot from long run values. To mitigate congestion and price spikes - both of which signal whole system risk of failure - ultraquality is needed based on both resources of the supply side and on the demand side.
The dimension of the demand side, however, is well undeveloped. So, EWPC innovation opportunities abound in the demand side, which definetly should include differentiated customers interruption costs, and not only the power bill in the rationing optimization. That is how the whole system - not its parts - is adapted to resolve both the stability of output prices and recovering of capital costs, by making the expected value of short run marginal costs get closer to the long run marginal costs.
A Generative Dialogue Without Illusions Part 15
On January 8th, 2006, I posted the following message under the article Playing with Fire – Part II:
Sorry Len,
The document talks about marginal cost which are variable costs by definition. New hydro units can apparently make "a lot of money" at zero marginal costs, but they have to pay for the large fixed costs.
Just take a look at “Accounting Systems Interaction Glossary of Terms Assets The ...,” to see the definition: “marginal costs are variable costs which vary in direct proportion to the level of activity.”
Sorry Len,
The document talks about marginal cost which are variable costs by definition. New hydro units can apparently make "a lot of money" at zero marginal costs, but they have to pay for the large fixed costs.
Just take a look at “Accounting Systems Interaction Glossary of Terms Assets The ...,” to see the definition: “marginal costs are variable costs which vary in direct proportion to the level of activity.”
A Generative Dialogue Without Illusions Part 14
On January 8th, 2006, I posted the following message under the article Playing with Fire – Part II:
Len,
Generating facilities are dispatched on their variable costs, not on average costs. Hydro facilities variable costs are nearly zero and those units are usually energy limited, but their new development costs are usually very high. In the US, old hydro developments expected benefits are already committed. The LMP price is relative to variable costs. Bidding systems of Model 2 are suspect, as they are in your proposal.
In order to make sense of the data it is not possible to do simply arithmetic calculations as you propose. It is necessary to simulate what the expected random LMP values are for a long over a long period of time. That depends on the probabilities of rainfall or the snow that is expected to fall and melt into the hydro plant. In addition, the power flows at a given node depend on the system as a whole at every moment.
If a region does not allow central or distributed generation, energy efficiency, and transmission development, they should know they will be playing with fire, not matter what the model is.
Len,
Generating facilities are dispatched on their variable costs, not on average costs. Hydro facilities variable costs are nearly zero and those units are usually energy limited, but their new development costs are usually very high. In the US, old hydro developments expected benefits are already committed. The LMP price is relative to variable costs. Bidding systems of Model 2 are suspect, as they are in your proposal.
In order to make sense of the data it is not possible to do simply arithmetic calculations as you propose. It is necessary to simulate what the expected random LMP values are for a long over a long period of time. That depends on the probabilities of rainfall or the snow that is expected to fall and melt into the hydro plant. In addition, the power flows at a given node depend on the system as a whole at every moment.
If a region does not allow central or distributed generation, energy efficiency, and transmission development, they should know they will be playing with fire, not matter what the model is.
Demand Response Under EWPC Part 3
On January 8th, 2006, I posted the following message under the article The Potential for Residential Demand Response on Transmission and Distribution Assets:
Len,
Thanks for explaining that there is no competition in the retails markets of gasoline and natural gas. If I understand correctly, oligopolies control the retail markets. If the gasoline stations and the gas retailers are owned or controlled by oligopolies, the market structured and design is flawed or the competition authorities are not doing their jobs or it could be that technology has not advanced sufficiently as is emerging in retail markets of electricity.
Gasoline stations are still retailers that develop their business directly with customers. There is no doubt that there retail function is absolutely necessary and cannot be done without it. Today’s distributors do them, and I am suggesting that the concentrate on their wires.
There is an urgent need for no-nonsense prudential regulations and ultraquality, as well as the development of the resources of the demand side in the power business. If gasoline stations have to compete with electric retailers, there is an opportunity to increase retail competition traveling by cars and trucks.
If you don't resolve the issues of retail competition, the oligopolies will own your swithboard too. In addition, by not dispatching economically under a whole system perspective, with an engineering institution, the cost to society will be excessive.
Len,
Thanks for explaining that there is no competition in the retails markets of gasoline and natural gas. If I understand correctly, oligopolies control the retail markets. If the gasoline stations and the gas retailers are owned or controlled by oligopolies, the market structured and design is flawed or the competition authorities are not doing their jobs or it could be that technology has not advanced sufficiently as is emerging in retail markets of electricity.
Gasoline stations are still retailers that develop their business directly with customers. There is no doubt that there retail function is absolutely necessary and cannot be done without it. Today’s distributors do them, and I am suggesting that the concentrate on their wires.
There is an urgent need for no-nonsense prudential regulations and ultraquality, as well as the development of the resources of the demand side in the power business. If gasoline stations have to compete with electric retailers, there is an opportunity to increase retail competition traveling by cars and trucks.
If you don't resolve the issues of retail competition, the oligopolies will own your swithboard too. In addition, by not dispatching economically under a whole system perspective, with an engineering institution, the cost to society will be excessive.
A Generative Dialogue Without Illusions Part 13
On January 8th, 2006, I posted the following message under the article Playing with Fire – Part II:
Thanks Len for your insistence against LMPs.
What you intuitively think is "the ideal price" seems to me what a monopolist wants. It is completely wrong in a market where demand has elasticity.
There are a lot of risks involve for the generator under competition. Just one example suffices: if the generating unit is not available they need to pay somebody else the LMPs to cover for him, under Model 3.
In addition, LMPs are much lower when demand has enough price elasticity. In a robust supply and demand market there should no be very often significant overpayment, nor very often significant underpayment.
Thanks Len for your insistence against LMPs.
What you intuitively think is "the ideal price" seems to me what a monopolist wants. It is completely wrong in a market where demand has elasticity.
There are a lot of risks involve for the generator under competition. Just one example suffices: if the generating unit is not available they need to pay somebody else the LMPs to cover for him, under Model 3.
In addition, LMPs are much lower when demand has enough price elasticity. In a robust supply and demand market there should no be very often significant overpayment, nor very often significant underpayment.
domingo, enero 07, 2007
A Generative Dialogue Without Illusions Part 12
Reference: Playing with Fire – Part II
Thanks Fred for your timely response. I guess you are right that "no tinkering with the demand side can compensate for gaming and lack of investment on the supply side" is highly likely under Model 2 and its piecemeal extensions.
To face gaming and lack of investment under EWPC there is an ultraquality requirement to be performed by a system engineering institution. The commercial activities of generation, and wholesale and retail of electricity to end-customers need to operate under a no-nonsense prudential regulation.
If the expert to the authorities in China is pushing Model 2 and its extensions, I also agree that your "anti-electric deregulation performance" statement is very likely to occur. If vertical integration – Model 1 – becomes the default solution, the little guy is bound to pay more for the investments than he should. The development of the resources of the demand side equity criterion - Market 3 - should lead to the effective development of the Chinese market at the bottom of the pyramid, which is the largest in the world.
Unless Northamerican, Chinesse and European leaders listen very closely to the first and second part of these comments, discussions, debates, and dialogues, they will certainly be playing with fire. My humble recommendation is that they retain a system architect expert on EWPC to help them coordinate a generative dialogue to come up with a new vision and develop a transition to EWPC. An expert on gas without price controls (GWPC) should no be difficult to develop in a parallel generative dialogue.
© 2007, José Antonio Vanderhorst-Silverio, Ph.D.
Thanks Fred for your timely response. I guess you are right that "no tinkering with the demand side can compensate for gaming and lack of investment on the supply side" is highly likely under Model 2 and its piecemeal extensions.
To face gaming and lack of investment under EWPC there is an ultraquality requirement to be performed by a system engineering institution. The commercial activities of generation, and wholesale and retail of electricity to end-customers need to operate under a no-nonsense prudential regulation.
If the expert to the authorities in China is pushing Model 2 and its extensions, I also agree that your "anti-electric deregulation performance" statement is very likely to occur. If vertical integration – Model 1 – becomes the default solution, the little guy is bound to pay more for the investments than he should. The development of the resources of the demand side equity criterion - Market 3 - should lead to the effective development of the Chinese market at the bottom of the pyramid, which is the largest in the world.
Unless Northamerican, Chinesse and European leaders listen very closely to the first and second part of these comments, discussions, debates, and dialogues, they will certainly be playing with fire. My humble recommendation is that they retain a system architect expert on EWPC to help them coordinate a generative dialogue to come up with a new vision and develop a transition to EWPC. An expert on gas without price controls (GWPC) should no be difficult to develop in a parallel generative dialogue.
© 2007, José Antonio Vanderhorst-Silverio, Ph.D.
A Generative Dialogue Without Illusions Part 11
Reference: Playing with Fire – Part II
Fred,
There is a difference between classroom perfect competition and real life workable competition.
To operate in real life there is a need for a robust power system, where the resources of the demand side and the resources of the supply side are available to manage systemic short run and long run physical risk in time and space.
The T&D grid should be integrated in every geographic - control - area and its operation and control planned and executed by a system engineering institution, with both supply side and demand side resources pre-committed.
There is an urgent need to develop the resources of the demand side. That development requires business model innovations which in turns require competition, as customers need will evolve in significant ways. A regulator is not prepared to do that job, since neat customer classes and rates will be insufficient to get the most value for society out of rationing electricity. The demand side is today highly undeveloped and to develop it true leadership – commercial retailers - will be required, to allow the workable competition that should be emerging in a complete, integral and fully functional Market 3.
Piece meal extensions to the incomplete, fractured and not fully functional Market 2 will maintain valid to your statement that “deregulation has failed, is failing or will fail just about everywhere.”
With T&D grid electric regulated under ultraquality and generation and commercial wholesale and retail deregulated, EWPC should not failed just about anywhere, if the commercial market architecture and design is properly implemented, under competent leadership and management.
Fred,
There is a difference between classroom perfect competition and real life workable competition.
To operate in real life there is a need for a robust power system, where the resources of the demand side and the resources of the supply side are available to manage systemic short run and long run physical risk in time and space.
The T&D grid should be integrated in every geographic - control - area and its operation and control planned and executed by a system engineering institution, with both supply side and demand side resources pre-committed.
There is an urgent need to develop the resources of the demand side. That development requires business model innovations which in turns require competition, as customers need will evolve in significant ways. A regulator is not prepared to do that job, since neat customer classes and rates will be insufficient to get the most value for society out of rationing electricity. The demand side is today highly undeveloped and to develop it true leadership – commercial retailers - will be required, to allow the workable competition that should be emerging in a complete, integral and fully functional Market 3.
Piece meal extensions to the incomplete, fractured and not fully functional Market 2 will maintain valid to your statement that “deregulation has failed, is failing or will fail just about everywhere.”
With T&D grid electric regulated under ultraquality and generation and commercial wholesale and retail deregulated, EWPC should not failed just about anywhere, if the commercial market architecture and design is properly implemented, under competent leadership and management.
A Generative Dialogue Without Illusions Part 10
Reference: Playing with Fire – Part II
Please be advised that today, before Len posted his last comment, I responded to Len's observations, under the article Demand Response Under EWPC Part 2, about his IMEUC proposal with a revised IMEUC retail to customer switchboard approach. The main reason is that his analogy of the gasoline market does not support his IMEUC wholesale to customer proposal, as gasoline stations are simply retailers that operate under competition just as suggested for EWPC.
If you read closely to the above message, Len is making up a distorted view of EWPC. The reason I perceive is that he now sees the LMP concept in the way of his wholesale to customer switchboard. LMP is the signal where supply meets demand at every location. Under Model 2, LMPs could be very high as transmission lines get congested without sufficient demand response close to the location.
Under Model 3, however, ultraquality long run system planning and design will aim to mitigate congestion with a mix of supply side and demand side resources. In general, LMP calculations before considering the demand side will signal the demand response needed. LMPs are part of the better designs possible. It is with the credibility that is inherent in long run ultraquality, not short run LMPs, that base load generators investments get built as they will get many dispatch hours during the lifetime. Technology obsolescence risk, however, should stay with the investors.
Please be advised that today, before Len posted his last comment, I responded to Len's observations, under the article Demand Response Under EWPC Part 2, about his IMEUC proposal with a revised IMEUC retail to customer switchboard approach. The main reason is that his analogy of the gasoline market does not support his IMEUC wholesale to customer proposal, as gasoline stations are simply retailers that operate under competition just as suggested for EWPC.
If you read closely to the above message, Len is making up a distorted view of EWPC. The reason I perceive is that he now sees the LMP concept in the way of his wholesale to customer switchboard. LMP is the signal where supply meets demand at every location. Under Model 2, LMPs could be very high as transmission lines get congested without sufficient demand response close to the location.
Under Model 3, however, ultraquality long run system planning and design will aim to mitigate congestion with a mix of supply side and demand side resources. In general, LMP calculations before considering the demand side will signal the demand response needed. LMPs are part of the better designs possible. It is with the credibility that is inherent in long run ultraquality, not short run LMPs, that base load generators investments get built as they will get many dispatch hours during the lifetime. Technology obsolescence risk, however, should stay with the investors.
sábado, enero 06, 2007
Demand Response Under EWPC Part 2
Reference: The Potential for Residential Demand Response on Transmission and Distribution Assets
I was conducting a generative dialogue with Len that resulted in the posts shown below. To follow very well this post, I suggest reading them:
Playing With Fire and Collapse Part 22 -- Playing With Fire and Collapse Part 21 -- Playing With Fire and Collapse Part 20 -- Playing With Fire and Collapse Part 19 -- Playing With Fire and Collapse Part 17 -- Playing With Fire and Collapse Part 16 -- Playing With Fire and Collapse Part 15
In response to posts sequence, Len wrote on 12.26.06: “Jose Antonio: Your cogent discussion raises some issues with IMEUC which I hope to clarify in a third article in the series here on EnergyPulse in perhaps a couple of weeks, provided I can submit it up to the high standards of the editorial staff. Thank you.”
I am adding some new insights for Len as a result of an effort to comprehend his posts related to the gasoline analogy and to make it easy to update his IMEUC with a third article:
1) It is impractical to have a switchboard between refineries and customers. So, it is also impractical to have a switchboard from generators and customers. The wholesale market’s engineering criteria, including maintenance programming, contingency runs, energy commitment and dispatch procedures, locational marginal prices, real time operation, etc., do not allow for a switchboard between generators and customers.
2) The wholesale market of gasoline, where gasoline is produced at refineries, is similar to wholesale electricity market; that is where retailers purchase their gasoline and electricity. Natural gas retailers could have similar situations.
3) At the gasoline market, customers go to the best retailers to get the best short run deals. So, instead of designing a switchboard on the wholesale market, which is impossible, there is a need to first develop EWPC retailers and second to implement the switchboard between retailers and customers. I am no expert on gas retailing, but assume it will be similar process.
4) Short run retail competition will result in several market segments.
The above suggestions are not to be taken without considering the posts mentioned above. EWPC is then one generic and open market architecture and design that doesn’t does not impose any restriction whatsoever to the revised IMEUC retailing switchboard.
I was conducting a generative dialogue with Len that resulted in the posts shown below. To follow very well this post, I suggest reading them:
Playing With Fire and Collapse Part 22 -- Playing With Fire and Collapse Part 21 -- Playing With Fire and Collapse Part 20 -- Playing With Fire and Collapse Part 19 -- Playing With Fire and Collapse Part 17 -- Playing With Fire and Collapse Part 16 -- Playing With Fire and Collapse Part 15
In response to posts sequence, Len wrote on 12.26.06: “Jose Antonio: Your cogent discussion raises some issues with IMEUC which I hope to clarify in a third article in the series here on EnergyPulse in perhaps a couple of weeks, provided I can submit it up to the high standards of the editorial staff. Thank you.”
I am adding some new insights for Len as a result of an effort to comprehend his posts related to the gasoline analogy and to make it easy to update his IMEUC with a third article:
1) It is impractical to have a switchboard between refineries and customers. So, it is also impractical to have a switchboard from generators and customers. The wholesale market’s engineering criteria, including maintenance programming, contingency runs, energy commitment and dispatch procedures, locational marginal prices, real time operation, etc., do not allow for a switchboard between generators and customers.
2) The wholesale market of gasoline, where gasoline is produced at refineries, is similar to wholesale electricity market; that is where retailers purchase their gasoline and electricity. Natural gas retailers could have similar situations.
3) At the gasoline market, customers go to the best retailers to get the best short run deals. So, instead of designing a switchboard on the wholesale market, which is impossible, there is a need to first develop EWPC retailers and second to implement the switchboard between retailers and customers. I am no expert on gas retailing, but assume it will be similar process.
4) Short run retail competition will result in several market segments.
a. One of those segments, for example, could be under the switchboard. For example, in that segment will have to auto finance resources like demand response, energy efficiency and energy storage or find alternative financing means or just do not investment whatsoever. In this case, customers will get a “continuous choice of several suppliers at time intervals comparable to my gasoline or other purchases.”5) T&D is a natural monopoly that competes with gas pipelines monopolies, not in the short run, but in the long run.
b. In an extreme segment, customers could not be under the switchboard. For example, customers getting full financing deals in resources like demand response, energy efficiency and energy storage may not be able to switch so easily.
The above suggestions are not to be taken without considering the posts mentioned above. EWPC is then one generic and open market architecture and design that doesn’t does not impose any restriction whatsoever to the revised IMEUC retailing switchboard.
viernes, enero 05, 2007
Demand Response Under EWPC
Reference: The Potential for Residential Demand Response on Transmission and Distribution Assets
Roger’s “Hmmm, this discussion sounds vaguely familiar...” is related to the long discussion about deregulation, under the article Playing with Fire - The 10 Tcf/year Supply Gap -- Part I, in which I suggested that the decade old deregulation debate, centered on the past, is no longer necessary, because an important third way of true deregulation market architecture and design went missing from implementation. I suggested to shift to a generative dialogue centered on an emerging future that was envisioned by Fred C. Schweppe and colleagues at MIT from 1978-1988.
As can be seen from the series “EWPC: People Coordinating and Cooperating with Electrons,” referred to in my post above, and in the most recent posts A Generative Dialogue Without Illusions Part 9 , A Generative Dialogue Without Illusions Part 8, A Generative Dialogue Without Illusions Part 7, EWPC: People Coordinating and Cooperating with Electrons Part 8, and EWPC: People Coordinating and Cooperating with Electrons Part 7, the parallel discussion with Fred Banks, Len Gould, Arvid Hallén, and James Carson, seems to have ended in favor of my suggestion of the emergent conceptual architecture and design of Market 3, electricity without price controls for the customers (EWPC) approach.
In the post My iPod is on the Demand Side, I said, among other things, that: “A breakthrough in electric power needs to start with a proper reform leading to a new paradigm - the End-State of the power industry [for quite some time]. Such End-State I believe will come from a structure where there is a T&D transportation monopoly (controlled market) that is separate from retail marketing and generation (free market) activities.”
In addition, Roger’s “Hmmm…” is suggesting that in Playing with Fire – Part II, the deregulation discussion was to be only about natgas. As I explained in EWPC: People Coordinating and Cooperating with Electrons Part 6, “Electric power market architecture and design is right at the center of the topic.” The intended topic of the author, not the EnergyPulse assigned topic, is what counts.
As can be seen in My iPod is on the Demand Side Part 2, “Demand Response is the best candidate iPod of the utility industry, located at the customer interface of the monopoly transportation system with a real and true potential free market.”
Roger’s opinion is directed at extending the obsolete monopoly retail market architecture and design model. The utility business model is not centered on a customer orientation, but on the supply oriented, good old days, of exploiting asymmetric knowledge with legal know-how to win rate cases to the regulator. As I said at the end of EWPC: People Coordinating and Cooperating with Electrons Part 2: “There is a need to allow for the emergence of the good new days, and EWPC is a strong candidate to increase the revised criteria: 1) Freedom of choice; 2) Economic efficiency; 3) Equity; and 4) Ultraquality. Only through new knowledge and innovations will societies satisfy emergent needs.”
© 2007, José Antonio Vanderhorst-Silverio, Ph.D.
Roger’s “Hmmm, this discussion sounds vaguely familiar...” is related to the long discussion about deregulation, under the article Playing with Fire - The 10 Tcf/year Supply Gap -- Part I, in which I suggested that the decade old deregulation debate, centered on the past, is no longer necessary, because an important third way of true deregulation market architecture and design went missing from implementation. I suggested to shift to a generative dialogue centered on an emerging future that was envisioned by Fred C. Schweppe and colleagues at MIT from 1978-1988.
As can be seen from the series “EWPC: People Coordinating and Cooperating with Electrons,” referred to in my post above, and in the most recent posts A Generative Dialogue Without Illusions Part 9 , A Generative Dialogue Without Illusions Part 8, A Generative Dialogue Without Illusions Part 7, EWPC: People Coordinating and Cooperating with Electrons Part 8, and EWPC: People Coordinating and Cooperating with Electrons Part 7, the parallel discussion with Fred Banks, Len Gould, Arvid Hallén, and James Carson, seems to have ended in favor of my suggestion of the emergent conceptual architecture and design of Market 3, electricity without price controls for the customers (EWPC) approach.
In the post My iPod is on the Demand Side, I said, among other things, that: “A breakthrough in electric power needs to start with a proper reform leading to a new paradigm - the End-State of the power industry [for quite some time]. Such End-State I believe will come from a structure where there is a T&D transportation monopoly (controlled market) that is separate from retail marketing and generation (free market) activities.”
In addition, Roger’s “Hmmm…” is suggesting that in Playing with Fire – Part II, the deregulation discussion was to be only about natgas. As I explained in EWPC: People Coordinating and Cooperating with Electrons Part 6, “Electric power market architecture and design is right at the center of the topic.” The intended topic of the author, not the EnergyPulse assigned topic, is what counts.
As can be seen in My iPod is on the Demand Side Part 2, “Demand Response is the best candidate iPod of the utility industry, located at the customer interface of the monopoly transportation system with a real and true potential free market.”
Roger’s opinion is directed at extending the obsolete monopoly retail market architecture and design model. The utility business model is not centered on a customer orientation, but on the supply oriented, good old days, of exploiting asymmetric knowledge with legal know-how to win rate cases to the regulator. As I said at the end of EWPC: People Coordinating and Cooperating with Electrons Part 2: “There is a need to allow for the emergence of the good new days, and EWPC is a strong candidate to increase the revised criteria: 1) Freedom of choice; 2) Economic efficiency; 3) Equity; and 4) Ultraquality. Only through new knowledge and innovations will societies satisfy emergent needs.”
© 2007, José Antonio Vanderhorst-Silverio, Ph.D.
jueves, enero 04, 2007
A Generative Dialogue Without Illusions Part 9
Gentlemen, [posted on 4.2.06 under What a surprise: Prices move both ways]
With all my respect for Prof. Banks, I will kindly respond to his comments:
As it might be inferred from my comments, late Prof. Fred Charles Schweppe did not need to take “the early chapters of his favorite economics book literally.” Prof. Schweppe “was regarded as an individualist, almost a renegade, with new and highly creative ideas, someone who was determined to bring these ideas to fruition.” He understood very clearly the feedback requirements of a power system and new that the customer was key to his market proposal. However, as far as I know, his suggestions have not been implemented anywhere.
If there is someone to be questioned (among many others which were part of "the system" of course), it has to be the JFK School of Goverment economist W.W. Hogan, which according to Fernando Alvarado, "in 1992 (Fred was dead) introduced the concept of contract networks as a practical extension to these early notions (of using prices to control the system) because it permitted the establishment of property rights within networks and allowed (approximately) efficient prices to be determined from a dispatch that was influenced by the judment of human operators [1]."
In Fred Schweppe proposal, the end customer was an integral and active part of the market which were supposed to respond to prices. If I understand it correctly, it is Prof. Hogan who did not understand very well how important the end customer was as an active “empowered customer” as EPRI is suggesting. Professor Hogan did not find mistakes in "Schweppe et al., when he said that they "argue for the robustness of spot pricing even when the perfect optimal solution is not available:”
Hogan quotes them saying "The fact that the true (prices) may not be calculated does not destroys the value of implementing a spot price based energy marketplace. The actual value calculated will be much closer to the true values than the present-day flat or time-of-use tares, etc. The goal of implementing the spot price based energy marketplace is to improve the coupling between the utility and its customers, no to achieve theoretical optimality [2]."
By looking at Hogan’s paper, I understand that the big mistake was replacing the price responsive end customer with the non-responsive transmission customer. " As I explained in my comments to Prof. Banks article, where I said: “Recently, I have sent an email to Mr. Casazza, and have gone to Jesus M. Martin-Giraldo, Power Encounters blog, where I posted comments in Spanish about a misunderstanding of Fred C Schweppe's Homeostatic Utility Control in the literature review he posted…”
It turns out, that Schweppe’s said: "conventional metering is replaced by a Marketing Interface to Customer (MIC) which, in addition to measuring power usage, multiplies the usage by posted price and records the total cost [3]," which means that Homeostatic Utility Control was what we are now calling demand response.
The regulated “energy marketplace involves the utility and its customers operating as partners… Utility implementation concerns include real-time calculation/prediction of hourly spot prices, metering-communication-billing, and system control center operation using the new control signal called price… customers who choose to exploit the energy marketplace potentials must implement the appropriate response systems (today demand response), which could range from simple manual response to sophisticated digital controls [4].”
Ádditionally, when I talk about risk management of system failure, please be advised that I am talking about physical risk management of reserves in the power system, by system elements, mostly generators, and costumer responsiveness.
Best regards,
José Antonio Vanderhorst-Silverio, PhD
Interdependent Consultant on Electricity
[1] Fernando Alvarado, "Is Systems Control Entirely by Price Feasible?" Proceedings of the 36th Hawaii International Conference on Power Siences - 2003,
[2] F. C. Schweppe et al, Spot Pricing of Electricity, Kluwer Academic Press Publishers, 1998, p. 97.
[3] Homeostatic Utility Control Vol. IEEE PAS-99, No.3 May/Jun 1980, page 1151.
[4] F. C. Schweppe et al, Spot Pricing of Electricity, ... p. 11.
With all my respect for Prof. Banks, I will kindly respond to his comments:
As it might be inferred from my comments, late Prof. Fred Charles Schweppe did not need to take “the early chapters of his favorite economics book literally.” Prof. Schweppe “was regarded as an individualist, almost a renegade, with new and highly creative ideas, someone who was determined to bring these ideas to fruition.” He understood very clearly the feedback requirements of a power system and new that the customer was key to his market proposal. However, as far as I know, his suggestions have not been implemented anywhere.
If there is someone to be questioned (among many others which were part of "the system" of course), it has to be the JFK School of Goverment economist W.W. Hogan, which according to Fernando Alvarado, "in 1992 (Fred was dead) introduced the concept of contract networks as a practical extension to these early notions (of using prices to control the system) because it permitted the establishment of property rights within networks and allowed (approximately) efficient prices to be determined from a dispatch that was influenced by the judment of human operators [1]."
In Fred Schweppe proposal, the end customer was an integral and active part of the market which were supposed to respond to prices. If I understand it correctly, it is Prof. Hogan who did not understand very well how important the end customer was as an active “empowered customer” as EPRI is suggesting. Professor Hogan did not find mistakes in "Schweppe et al., when he said that they "argue for the robustness of spot pricing even when the perfect optimal solution is not available:”
Hogan quotes them saying "The fact that the true (prices) may not be calculated does not destroys the value of implementing a spot price based energy marketplace. The actual value calculated will be much closer to the true values than the present-day flat or time-of-use tares, etc. The goal of implementing the spot price based energy marketplace is to improve the coupling between the utility and its customers, no to achieve theoretical optimality [2]."
By looking at Hogan’s paper, I understand that the big mistake was replacing the price responsive end customer with the non-responsive transmission customer. " As I explained in my comments to Prof. Banks article, where I said: “Recently, I have sent an email to Mr. Casazza, and have gone to Jesus M. Martin-Giraldo, Power Encounters blog, where I posted comments in Spanish about a misunderstanding of Fred C Schweppe's Homeostatic Utility Control in the literature review he posted…”
It turns out, that Schweppe’s said: "conventional metering is replaced by a Marketing Interface to Customer (MIC) which, in addition to measuring power usage, multiplies the usage by posted price and records the total cost [3]," which means that Homeostatic Utility Control was what we are now calling demand response.
The regulated “energy marketplace involves the utility and its customers operating as partners… Utility implementation concerns include real-time calculation/prediction of hourly spot prices, metering-communication-billing, and system control center operation using the new control signal called price… customers who choose to exploit the energy marketplace potentials must implement the appropriate response systems (today demand response), which could range from simple manual response to sophisticated digital controls [4].”
Ádditionally, when I talk about risk management of system failure, please be advised that I am talking about physical risk management of reserves in the power system, by system elements, mostly generators, and costumer responsiveness.
Best regards,
José Antonio Vanderhorst-Silverio, PhD
Interdependent Consultant on Electricity
[1] Fernando Alvarado, "Is Systems Control Entirely by Price Feasible?" Proceedings of the 36th Hawaii International Conference on Power Siences - 2003,
[2] F. C. Schweppe et al, Spot Pricing of Electricity, Kluwer Academic Press Publishers, 1998, p. 97.
[3] Homeostatic Utility Control Vol. IEEE PAS-99, No.3 May/Jun 1980, page 1151.
[4] F. C. Schweppe et al, Spot Pricing of Electricity, ... p. 11.
A Generative Dialogue Without Illusions Part 8
Fundamentals of Deregulation [posted on 4.21.06 under Post hoc ergo propter hoc: The fallacy of blaming deregulation for rising electricity prices].
Slide #1 of 72
Retail Access is Easy, It’s Getting Wholesale Access that is Hard
William W. Hogan, Harvard University
Virginia Electricity Forum
Virginia State Corporation Commission
Charlottesville, Virginia
November 15, 1996
Slide #2 of 72
ELECTRICITY MARKET --------- Structures
Two elements stand at the core of a new market structure that can be fashioned consistent with this set of objectives.
• Pool-Based Market: Operation of the short-term market through a closely coordinated or pool-based dispatch. System security and network congestion problems handled as part of the dispatch. Transmission capacity rights allocated along with grid costs but implemented through short-term pool pricing and rental payments for use of allocated capacity. Long-run investment and contracts for energy handled in bilateral markets.
• Customer Choice: Under Efficient Direct Access customers remain with the local utility which buys from the wholesale market and resells at a time-of-use rate based on the spot price. There are no necessary changes in cost-of-service principles. All customers remain under the utility tariff but have effective access to the market. Decisions on cost recovery can proceed as before. Whatever can be done under traditional cost-of-service regulation can be continued. Universal service support, investments in energy efficiency, and subsidies for renewable and other environmentally preferred alternatives could be made when justified, and included in the cost of service applied to all customers separate from the time-of-use energy charges.
The pool-based, short-term electricity market addresses the few necessary constraints and technical issues by coordinating system operations and power plant dispatch. Customers, brokers and aggregators enjoy free choice to make long-term arrangements with any supplier or rely solely on access to the short-term market.
No need to read any further...
Slide #1 of 72
Retail Access is Easy, It’s Getting Wholesale Access that is Hard
William W. Hogan, Harvard University
Virginia Electricity Forum
Virginia State Corporation Commission
Charlottesville, Virginia
November 15, 1996
Slide #2 of 72
ELECTRICITY MARKET --------- Structures
Two elements stand at the core of a new market structure that can be fashioned consistent with this set of objectives.
• Pool-Based Market: Operation of the short-term market through a closely coordinated or pool-based dispatch. System security and network congestion problems handled as part of the dispatch. Transmission capacity rights allocated along with grid costs but implemented through short-term pool pricing and rental payments for use of allocated capacity. Long-run investment and contracts for energy handled in bilateral markets.
• Customer Choice: Under Efficient Direct Access customers remain with the local utility which buys from the wholesale market and resells at a time-of-use rate based on the spot price. There are no necessary changes in cost-of-service principles. All customers remain under the utility tariff but have effective access to the market. Decisions on cost recovery can proceed as before. Whatever can be done under traditional cost-of-service regulation can be continued. Universal service support, investments in energy efficiency, and subsidies for renewable and other environmentally preferred alternatives could be made when justified, and included in the cost of service applied to all customers separate from the time-of-use energy charges.
The pool-based, short-term electricity market addresses the few necessary constraints and technical issues by coordinating system operations and power plant dispatch. Customers, brokers and aggregators enjoy free choice to make long-term arrangements with any supplier or rely solely on access to the short-term market.
No need to read any further...
A Generative Dialogue Without Illusions Part 7
Hi James,
On your first and last answers, the fourth I understand is just one of many opinions, I still think debates will not get us where we want to be, which is acting on the emergent worldwide (not just the US) gas crisis pinpointed by Andy, which requires very efficient use of natgas. But since you insist to find out why “… de-regulation wrangling is pertinent to…” the “Playing with Fire” discussion, I will tell you about one very big – key - issue that I posted and that you simply ignored. So I challenge you again without any discourtesy:
This time, however, I will post samples of what you will find. As Jack Casazza wrote to me on 12.29.05, under Professor Banks’ article A Few More Unfriendly Comments on Electric Deregulation, “The restructuring and deregulation of the electric power industry was a serious mistake in the USA and in many countries, harming the general public.” The mistake’s origin can be assigned to the most influential person of deregulation and restructuring, Bill Hogan, whose opinions were instrumental in changing the history of electricity. I know he is a very intelligent man, which I have not met. I know that the powerful lobbies were the true means behind the effort to extend the useful life of the investments of the IOUs.
This is part of what I wrote on 4.2.06, under What a surprise: Prices move both ways: ”If there is someone to be questioned (among many others which were part of "the system" of course), it has to be the JFK School of Government economist W.W. Hogan,… see complete post below to find out how the development of price elasticity of demand - demand response – by a market architecture and design flaw of 1992.
In addition, on Please Blame The Deregulation and Regulation Fiascos Parte 2, Hogan claimed on 11.15.96 – see details below - that retail access is easy, while creating the foundation of the protection of “native loads,” keeping a barrier to innovations on the demand side.
The demand response movement got force only after the 14th August 2003 blackout was begun to be understood. However, the 2005 Energy Bill still includes the “native” load possibility for vested interests, which should be repealed, like you would say “the sooner, the better.”
Responding you second and third items, the PJM Timeline shows the long institutional history of PJM, which begin in 1927 with PA and NJ, and became PJM Interconnection in 1956. The NYISO is an outgrowth of the New York Power Pool, formed by New York’s eight largest utilities following the Northeast Blackout of 1965. The Power Pool combined the power generation and technical resources of its members to create an organization committed to the reliable, safe and efficient operation of the electric system.
Thanks for getting back to the generative dialogue.
© 2007. José Antonio Vanderhorst-Silverio, Ph.D.
On your first and last answers, the fourth I understand is just one of many opinions, I still think debates will not get us where we want to be, which is acting on the emergent worldwide (not just the US) gas crisis pinpointed by Andy, which requires very efficient use of natgas. But since you insist to find out why “… de-regulation wrangling is pertinent to…” the “Playing with Fire” discussion, I will tell you about one very big – key - issue that I posted and that you simply ignored. So I challenge you again without any discourtesy:
Search for Hogan in the following articles, read the complete comments (not only samples), and their links, and get back to me with your conclusions.
What a surprise: Prices move both ways
The Gap Between Demand Response Potential and Demand Response Reality
Post hoc ergo propter hoc: The fallacy of blaming deregulation for rising electricity prices
This time, however, I will post samples of what you will find. As Jack Casazza wrote to me on 12.29.05, under Professor Banks’ article A Few More Unfriendly Comments on Electric Deregulation, “The restructuring and deregulation of the electric power industry was a serious mistake in the USA and in many countries, harming the general public.” The mistake’s origin can be assigned to the most influential person of deregulation and restructuring, Bill Hogan, whose opinions were instrumental in changing the history of electricity. I know he is a very intelligent man, which I have not met. I know that the powerful lobbies were the true means behind the effort to extend the useful life of the investments of the IOUs.
This is part of what I wrote on 4.2.06, under What a surprise: Prices move both ways: ”If there is someone to be questioned (among many others which were part of "the system" of course), it has to be the JFK School of Government economist W.W. Hogan,… see complete post below to find out how the development of price elasticity of demand - demand response – by a market architecture and design flaw of 1992.
In addition, on Please Blame The Deregulation and Regulation Fiascos Parte 2, Hogan claimed on 11.15.96 – see details below - that retail access is easy, while creating the foundation of the protection of “native loads,” keeping a barrier to innovations on the demand side.
The demand response movement got force only after the 14th August 2003 blackout was begun to be understood. However, the 2005 Energy Bill still includes the “native” load possibility for vested interests, which should be repealed, like you would say “the sooner, the better.”
Responding you second and third items, the PJM Timeline shows the long institutional history of PJM, which begin in 1927 with PA and NJ, and became PJM Interconnection in 1956. The NYISO is an outgrowth of the New York Power Pool, formed by New York’s eight largest utilities following the Northeast Blackout of 1965. The Power Pool combined the power generation and technical resources of its members to create an organization committed to the reliable, safe and efficient operation of the electric system.
Thanks for getting back to the generative dialogue.
© 2007. José Antonio Vanderhorst-Silverio, Ph.D.
miércoles, enero 03, 2007
EWPC: People Coordinating and Cooperating with Electrons Part 8
To complete the response to James, please read the following post: EWPC: People Coordinating and Cooperating with Electrons Part 6.
Having reserves available is insufficient. Active and reactive reserves need to be dispatched and deployed in the correct places to keep the system synchronized. Lack of enough reactive reserves leads to voltage collapse, which fuels the dominoe effect.
Because the US grid was not designed for Model 2, a comprehensive design based on ultraquality is a must. Investments required under Model 3 are much smaller than with Model 2, as "connected networks" are very expensive.
A flawed market design and architecture that increases boom-bust behavior is probably the culprit on excess capacity in some regions of the USA.
Please take any follow up discussions to Part II.
Having reserves available is insufficient. Active and reactive reserves need to be dispatched and deployed in the correct places to keep the system synchronized. Lack of enough reactive reserves leads to voltage collapse, which fuels the dominoe effect.
Because the US grid was not designed for Model 2, a comprehensive design based on ultraquality is a must. Investments required under Model 3 are much smaller than with Model 2, as "connected networks" are very expensive.
A flawed market design and architecture that increases boom-bust behavior is probably the culprit on excess capacity in some regions of the USA.
Please take any follow up discussions to Part II.
Residential Demand Response
Reference: The Potential for Residential Demand Response on Transmission and Distribution Assets
The true potential of demand response is for the system as a whole, not by considering one part at a time. Most of the value is in the relationships, which depend a lot on market architecture and design.
As can be seen in the article An Alternative Business Case for Demand Response, “[T]here are two sides on the DR coin. On one side, system crashes are mitigated by a least cost mix of supply and demand risk management tools that may be applied in time and space. On the other, DR is the key to the segmentation of customers supply security (a kind of insurance). Because of its fine grain nature, DR can help mitigate delays (intended or not) of lumpy investments in generation, transmission, and distribution.”
To engage customers to make inform decisions, please take a look at the comments under The Future Utility Customer Service Model. Please take a look also under the article EWPC: People Coordinating and Cooperating with Electrons Part 6 for a suggestion of a comprehensive national energy strategy, where I say that:
The development of the residential DR mass market will depend on the development of business model innovations that include other resources on the demand side as well.
© 2007. José Antonio Vanderhorst-Silverio, Ph.D.
The true potential of demand response is for the system as a whole, not by considering one part at a time. Most of the value is in the relationships, which depend a lot on market architecture and design.
As can be seen in the article An Alternative Business Case for Demand Response, “[T]here are two sides on the DR coin. On one side, system crashes are mitigated by a least cost mix of supply and demand risk management tools that may be applied in time and space. On the other, DR is the key to the segmentation of customers supply security (a kind of insurance). Because of its fine grain nature, DR can help mitigate delays (intended or not) of lumpy investments in generation, transmission, and distribution.”
To engage customers to make inform decisions, please take a look at the comments under The Future Utility Customer Service Model. Please take a look also under the article EWPC: People Coordinating and Cooperating with Electrons Part 6 for a suggestion of a comprehensive national energy strategy, where I say that:
Two generic electricity systems models have been implemented: Model 1: old vertical integration controlled market and Model 2: faulty deregulation, based on open transmission access and “native” loadsThe deferring energy use value proposition is an integral part of Model 3. The barriers on the development of the demand side are integral to Models 1 and 2. Under Model 3, retail competition, under prudential regulation, instead of traditional regulation, is what let’s “the greater the value, the greater the anticipated response” operate. Customer classes disappear as customer segment themselves on the best value proposition in the market, as retail competition will also ‘ensure that programs… are implemented in a manner that achieves net benefits for consumers.”
As an emergent system is Model 3: electricity without price controls [EWPC]. Since Model 1 and Model 2 have barriers on the development of the resources of the demand side that are being addressed on a piecemeal basis [an alternative solution is needed]. Model 3 is based on an integral development of the resources of the demand side.”
The development of the residential DR mass market will depend on the development of business model innovations that include other resources on the demand side as well.
© 2007. José Antonio Vanderhorst-Silverio, Ph.D.
EWPC: People Coordinating and Cooperating with Electrons Part 7
Reference: Playing with Fire – Part II
In response to a comment (see below) by Jim Beyer,
Mr. Beyer,
As far as I understand, under Model 2, prices reflect the marginal plants costs, not the base load units costs; under Model 1, the usual mechanism is to transfer energy costs increases to the customer or the tax payer with a time delay. The timing is for a comprehensive national energy strategy.
As for your suggestions of the development of CHP, Model 1 and 2 are biased againt the development of the resources of the demand side.
Jim Beyer's comment:
In response to a comment (see below) by Jim Beyer,
Mr. Beyer,
As far as I understand, under Model 2, prices reflect the marginal plants costs, not the base load units costs; under Model 1, the usual mechanism is to transfer energy costs increases to the customer or the tax payer with a time delay. The timing is for a comprehensive national energy strategy.
As for your suggestions of the development of CHP, Model 1 and 2 are biased againt the development of the resources of the demand side.
Jim Beyer's comment:
I really don't think electricity prices are strongly tied to NG prices. I think there is something rather Californian about that way of thinking, because in the rest of the country, about 70% percent of electricity is generated from coal and much of the remainder from nuclear.
I won't dispute the problems with using coal w.r.t. GHG emissions, but in the short term, a shortage of NG shouldn't raise electricity prices too much -- at least not in California.
EWPC: People Coordinating and Cooperating with Electrons Part 6
Reference: Playing with Fire – Part II
Andy had said: “This is the first of a four part series of articles on the natural gas and electricity price and supply risks facing the U.S. economy.”
The topic is: natural gas and electricity price and supply risks.
Electric power market architecture and design is right at the center of the topic. Two generic electricity systems models have been implemented: Model 1: old vertical integration controlled market and Model 2: faulty deregulation, based on open transmission access and “native” loads.
As an emergent system is Model 3: electricity without price controls. Since Model 1 and Model 2 have barriers on the development of the resources of the demand side that are being addressed on a piecemeal basis. Model 3 is based on an integral development of the resources of the demand side.
As gas prices rise, in Model 1 gas price volatility are transferred to the electricity price volatility; in Model 2 gas prices volatility are amplified into higher volatility to the electricity prices; and in Model 3 gas price volatility is mitigated into less volatile electricity prices.
Physical supply side risk management of Model 1 was not fully transfer to Model 2, making it unstable under shocks conditions. Model 3 has both supply side and demand side physical risk management. Demand price elasticity development barriers under Model 1 and 2 are fully eliminated under Model 3.
Model 2 incredible volatility is a flaw that goes against electricity as a commodity. The flaw is the lack of ultraquality. McKinsey has an article on electricity as a special commodity.
The key suggestion to develop a generative dialogue is thus right on the topic. The decade old debate around Model 1 and Model 2 is no longer necessary.
By developing two or three plausible scenarios, one of which is the “continuity” scenario, my opinion is that Model 3 will result as a predetermine element – fits on any of the scenarios. Model 1 will only be on the “continuity scenario”. On the “playing with fire” scenario Model 2 won’t cut it, while Model 3 is the best to face the severity of the crisis. Piecemeal changes to Model 2 towards Model 3 will make it very inefficient.
The adoption of a comprehensive national energy strategy should be based on a generative dialogue, including strategic conversations around the scenarios and system dynamic runs that include all the mental models of the interested parties. Major changes to the existing U.S. energy infrastructure, with the wrong market architecture and design is nothing more than playing with fire. Andy’s contribution is a welcome input to such strategy.
For some more details read the following recent posts:
EWPC: People Coordinating and Cooperating with Electrons Part 4
EWPC: People Coordinating and Cooperating with Electrons Part 3
EWPC: People Coordinating and Cooperating with Electrons Part 2
EWPC: People Coordinating and Cooperating with Electrons
© 2007. José Antonio Vanderhorst-Silverio, Ph.D.
Andy had said: “This is the first of a four part series of articles on the natural gas and electricity price and supply risks facing the U.S. economy.”
The topic is: natural gas and electricity price and supply risks.
Electric power market architecture and design is right at the center of the topic. Two generic electricity systems models have been implemented: Model 1: old vertical integration controlled market and Model 2: faulty deregulation, based on open transmission access and “native” loads.
As an emergent system is Model 3: electricity without price controls. Since Model 1 and Model 2 have barriers on the development of the resources of the demand side that are being addressed on a piecemeal basis. Model 3 is based on an integral development of the resources of the demand side.
As gas prices rise, in Model 1 gas price volatility are transferred to the electricity price volatility; in Model 2 gas prices volatility are amplified into higher volatility to the electricity prices; and in Model 3 gas price volatility is mitigated into less volatile electricity prices.
Physical supply side risk management of Model 1 was not fully transfer to Model 2, making it unstable under shocks conditions. Model 3 has both supply side and demand side physical risk management. Demand price elasticity development barriers under Model 1 and 2 are fully eliminated under Model 3.
Model 2 incredible volatility is a flaw that goes against electricity as a commodity. The flaw is the lack of ultraquality. McKinsey has an article on electricity as a special commodity.
The key suggestion to develop a generative dialogue is thus right on the topic. The decade old debate around Model 1 and Model 2 is no longer necessary.
By developing two or three plausible scenarios, one of which is the “continuity” scenario, my opinion is that Model 3 will result as a predetermine element – fits on any of the scenarios. Model 1 will only be on the “continuity scenario”. On the “playing with fire” scenario Model 2 won’t cut it, while Model 3 is the best to face the severity of the crisis. Piecemeal changes to Model 2 towards Model 3 will make it very inefficient.
The adoption of a comprehensive national energy strategy should be based on a generative dialogue, including strategic conversations around the scenarios and system dynamic runs that include all the mental models of the interested parties. Major changes to the existing U.S. energy infrastructure, with the wrong market architecture and design is nothing more than playing with fire. Andy’s contribution is a welcome input to such strategy.
For some more details read the following recent posts:
EWPC: People Coordinating and Cooperating with Electrons Part 4
EWPC: People Coordinating and Cooperating with Electrons Part 3
EWPC: People Coordinating and Cooperating with Electrons Part 2
EWPC: People Coordinating and Cooperating with Electrons
© 2007. José Antonio Vanderhorst-Silverio, Ph.D.
martes, enero 02, 2007
EWPC: People Coordinating and Cooperating with Electrons Part 5
Reference: Playing with Fire - The 10 Tcf/year Supply Gap -- Part I
James said, "My intention is not to convince Professor Banks… is to challenge his assertions with which I disagree. Thousands of people read these forums, and I think it is a bad idea for them to get the impression that… Banks reflects the prevailing consensus. Frankly, I expected a more spirited clash. He merely makes pronouncements with little support and fails to respond to my rejoinders."
As I will show, readers can reverse Banks and Carson’s names without any loss of generality. That shows that Jim opinion does not reflect the prevailing consensus either.” Bad ideas “must be killed, the sooner the better.”
After working for 30 years at FPC and at FERC, Jack Duckworth – a professional engineer, not a politician - predicted the 14th August Blackout in the very illuminating article The Fatal Flaw in Electric Power Deregulation. Mr. Duckworth said that “[D]eregulation can work, but it will not work unless those overseeing the deregulation initiative recognize the inherent flaw and install a mechanism that will fill the gap by guaranteeing the availability of electric power without guaranteeing the price.”
As a mechanism, he said: “When I saw in 2001 that the market was failing to ensure adequate generating reserve margins, I proposed in my book, Power to the People, that the government put national rules in place that would require any power generating company to maintain a set reserve generating capacity margin as a condition of doing business. Such a mandatory reserve margin would ensure that there could never be a disastrous shortage of supply that could blackout an entire electric power supply region. It would also ensure a level field for all competing generating companies.”
This is what Jim, the practical analyst, advised to all readers of EnergyPulse on Feb 18, 2003:
Sorry, I did not find this article at all illuminating.
James said, "My intention is not to convince Professor Banks… is to challenge his assertions with which I disagree. Thousands of people read these forums, and I think it is a bad idea for them to get the impression that… Banks reflects the prevailing consensus. Frankly, I expected a more spirited clash. He merely makes pronouncements with little support and fails to respond to my rejoinders."
As I will show, readers can reverse Banks and Carson’s names without any loss of generality. That shows that Jim opinion does not reflect the prevailing consensus either.” Bad ideas “must be killed, the sooner the better.”
After working for 30 years at FPC and at FERC, Jack Duckworth – a professional engineer, not a politician - predicted the 14th August Blackout in the very illuminating article The Fatal Flaw in Electric Power Deregulation. Mr. Duckworth said that “[D]eregulation can work, but it will not work unless those overseeing the deregulation initiative recognize the inherent flaw and install a mechanism that will fill the gap by guaranteeing the availability of electric power without guaranteeing the price.”
As a mechanism, he said: “When I saw in 2001 that the market was failing to ensure adequate generating reserve margins, I proposed in my book, Power to the People, that the government put national rules in place that would require any power generating company to maintain a set reserve generating capacity margin as a condition of doing business. Such a mandatory reserve margin would ensure that there could never be a disastrous shortage of supply that could blackout an entire electric power supply region. It would also ensure a level field for all competing generating companies.”
This is what Jim, the practical analyst, advised to all readers of EnergyPulse on Feb 18, 2003:
Sorry, I did not find this article at all illuminating.
The principal objection appears to be that reliability is not considered in the market price of power, and cannot be. This is true, as far as it goes. However, there are several market mechanisms that have been developed that specifically address this.
First, capacity. It is not perfect, but it does work after a fashion. More work must be done to improve this mechanism.
Seond, spinning reserve markets are already functioning in PJM and, I believe, ERCOT. So far, so good on these efforts. The notion that electricity is somehow 'different' from other commodities must be killed, the sooner the better. One could make the similar points about wheat and natural gas. Indeed, the histories of both of those commodities are replete with similar concerns.
Power as a commodity is distinguished by two 'interesting' features, both of which contribute to its incredible volatility. First, with a few exceptions, power cannot be stored. However, now that we have functioning markets, we can measure the value of storage. I have already worked on one project that required an estimate of the value of storage.
Second, the elasticity of the demand curve at any particular moment for power is essentially zero. That is, a marginal change in price produces no change whatsoever in demand. Even a large change in price produces no change in demand. That is why the marketplace is working so hard on 'demand side' management programs. Again, the market is responding, albeit slowly.
James Carson JBCarson@RisQuant.com
EWPC: People Coordinating and Cooperating with Electrons Part 4
The IEEE Spectrum Online, Tech Talk, a weekly Blog, discussing topics chosen by Susan Hassler, IEEE Spectrum's Editor-in-Chief, issued on October 13th the post FINAL REPORT: BLACKOUT ACTION NEEDED, where I added the only three comments posted so far. I suggest reading those comments too, if you are interested in the generative dialogue.
Jim Carson seems to enter into a very radical opinion when he says that “We do NOT need yet ANOTHER investigation. The blackout has been investigated ad nauseum. We already know what happened.”
As can be seen in the Final Report, however, a totally different story exists: “… the ultimate impact of the source failure was compounded by "long-standing institutional failures and weaknesses that need to be understood and corrected in order to maintain reliability.”
Secretary Bodman is more conservative than Jim when he says “I appreciate the hard work and diligence that went into this important report. It demonstrates that while improvements are being made to enhance grid reliability, we still have a very complex system that is subject to possible mechanical and human failures. We must remain vigilant." Phrases like “need to be understood,” “very complex system,” “must remain vigilant,” denote that they still don’t know what happened.
In addition, admission that there are "long-standing institutional failures and weaknesses that need to be understood and corrected in order to maintain reliability,” can be the ground for an independent investigation, or better yet a generative dialogue by itself, which I repeat “… should consider fully both the institutional memory and the sound research done by Fred C. Schweppe and colleagues, from 1978-1988, not in a debate, but in a generative dialogue, to resolve most of the flaws identified by Casazza, Delea and Loehr, and also to break the barriers to the emergent innovations flowing into the industry.”
Since the Final Report stresses that “… we have a very complex system…,” I also reiterate that “[S]ystemic thinking, scenarios, system dynamics, mental models are tools to help us approach system complexity. An explanation based on simple cause and effect, mechanistic thinking, is generally insufficient to explain system complexity…”
I am willing to change my opinion to change the need for an independent investigation to that of generative dialogue, and the remaining sentence would read “[T]hose tools should be used fully, since “[a generative dialogue] is needed of all the issues raised by the blackout and other reliability problems to ascertain that all necessary remedial actions have been taken, as PEST suggest and the GMH extends.”
© 2007. José Antonio Vanderhorst Silverio, Ph.D.
Jim Carson seems to enter into a very radical opinion when he says that “We do NOT need yet ANOTHER investigation. The blackout has been investigated ad nauseum. We already know what happened.”
As can be seen in the Final Report, however, a totally different story exists: “… the ultimate impact of the source failure was compounded by "long-standing institutional failures and weaknesses that need to be understood and corrected in order to maintain reliability.”
Secretary Bodman is more conservative than Jim when he says “I appreciate the hard work and diligence that went into this important report. It demonstrates that while improvements are being made to enhance grid reliability, we still have a very complex system that is subject to possible mechanical and human failures. We must remain vigilant." Phrases like “need to be understood,” “very complex system,” “must remain vigilant,” denote that they still don’t know what happened.
In addition, admission that there are "long-standing institutional failures and weaknesses that need to be understood and corrected in order to maintain reliability,” can be the ground for an independent investigation, or better yet a generative dialogue by itself, which I repeat “… should consider fully both the institutional memory and the sound research done by Fred C. Schweppe and colleagues, from 1978-1988, not in a debate, but in a generative dialogue, to resolve most of the flaws identified by Casazza, Delea and Loehr, and also to break the barriers to the emergent innovations flowing into the industry.”
Since the Final Report stresses that “… we have a very complex system…,” I also reiterate that “[S]ystemic thinking, scenarios, system dynamics, mental models are tools to help us approach system complexity. An explanation based on simple cause and effect, mechanistic thinking, is generally insufficient to explain system complexity…”
I am willing to change my opinion to change the need for an independent investigation to that of generative dialogue, and the remaining sentence would read “[T]hose tools should be used fully, since “[a generative dialogue] is needed of all the issues raised by the blackout and other reliability problems to ascertain that all necessary remedial actions have been taken, as PEST suggest and the GMH extends.”
© 2007. José Antonio Vanderhorst Silverio, Ph.D.
Opinión sobre la Opinión
Por César Féliz,
Apreciados todos:
Vivir en una sociedad plural impone asumir que lo absolutamente respetable son las personas, no sus opiniones, y que el derecho a la propia opinión consiste en que ésta sea escuchada y discutida, no en que se la vea pasar sin tocarla como si de una vaca sagrada se tratase.
Lo que debemos fomentar no es la disposición a establecer irrevocablemente lo que se ha elegido pensar, sino la capacidad de participar fructíferamente en una controversia razonada, aunque ello "hiera" algunos de nuestros dogmas personales o familiares. Aprender a discutir, a refutar y a justificar lo que se piensa debe ser parte irrenunciable de cualquier ser humano. Para ello no basta saber expresarse con claridad y precisión (aunque sea primordial, tanto por escrito como oralmente) y someterse a las mismas exigencias de inteligibilidad que se piden a los otros, sino que también hay que desarrollar la facultad de escuchar lo que se propone en el palenque discursivo.
No se trata de patentar una comunidad de autistas celosamente clausurados en sus "respetables" opiniones propias, sino de propiciar la disposición a participar lealmente en coloquios razonables y a buscar en común una verdad que no tenga dueño y que procure no hacer esclavos. Desde luego amigos, tal disposición debe encontrar su primer ejemplo en la propia actitud de quienes han tenido y tienen el privilegio de dirigir o haber dirigido, en el caso que nos ocupa la cosa pública, firmeza en lo que se sabe pero dispuesto a debatirlo e incluso modificarlo en el transcurso con la ayuda de los demás si fuese necesario; para eso definitivamente se necesita tener entereza y temple. Y no hay que temer que ese espíritu crítico lleve al puro nihilismo indisciplinado, porque si es auténtico más bien previene contra él.
Escuchemos una vez más la sensatez de Jhon Passmore, cuando dice:
Con afectos para todos
Apreciados todos:
Vivir en una sociedad plural impone asumir que lo absolutamente respetable son las personas, no sus opiniones, y que el derecho a la propia opinión consiste en que ésta sea escuchada y discutida, no en que se la vea pasar sin tocarla como si de una vaca sagrada se tratase.
Lo que debemos fomentar no es la disposición a establecer irrevocablemente lo que se ha elegido pensar, sino la capacidad de participar fructíferamente en una controversia razonada, aunque ello "hiera" algunos de nuestros dogmas personales o familiares. Aprender a discutir, a refutar y a justificar lo que se piensa debe ser parte irrenunciable de cualquier ser humano. Para ello no basta saber expresarse con claridad y precisión (aunque sea primordial, tanto por escrito como oralmente) y someterse a las mismas exigencias de inteligibilidad que se piden a los otros, sino que también hay que desarrollar la facultad de escuchar lo que se propone en el palenque discursivo.
No se trata de patentar una comunidad de autistas celosamente clausurados en sus "respetables" opiniones propias, sino de propiciar la disposición a participar lealmente en coloquios razonables y a buscar en común una verdad que no tenga dueño y que procure no hacer esclavos. Desde luego amigos, tal disposición debe encontrar su primer ejemplo en la propia actitud de quienes han tenido y tienen el privilegio de dirigir o haber dirigido, en el caso que nos ocupa la cosa pública, firmeza en lo que se sabe pero dispuesto a debatirlo e incluso modificarlo en el transcurso con la ayuda de los demás si fuese necesario; para eso definitivamente se necesita tener entereza y temple. Y no hay que temer que ese espíritu crítico lleve al puro nihilismo indisciplinado, porque si es auténtico más bien previene contra él.
Escuchemos una vez más la sensatez de Jhon Passmore, cuando dice:
Aceptemos que la persona que es un crítico especialmente dotado suele ser destructora. Pero, al menos esperémoslo así, destructora de la verborrea, de lo pretencioso, de la hipocresía, del conservadurismo complaciente y del radicalismo fantasioso. Si como resultado de ser crítico puede ayudar a destruir estos pecados capitales antes de que destruyan a la sociedad humana, tanto mejor.Para finalizar apreciados amigos, quiero decirles, que los humanos no somos problemas o ecuaciones, sino historias; nos parecemos menos a las cuentas que a los cuentos, de manera que lo que hagamos debe estar vinculado al pasado, y a los cambios que han acompañado su desarrollo, quizá sólo así podríamos tener un presente exitoso y liberarnos de la incertidumbre futura.
Con afectos para todos
lunes, enero 01, 2007
EWPC: People Coordinating and Cooperating with Electrons Part 3
Reference: Playing with Fire - The 10 Tcf/year Supply Gap -- Part I
To all readers that want to learn about the third way of deregulation
To complement the posts EWPC: People Coordinating and Cooperating with Electrons and EWPC: People Coordinating and Cooperating with Electrons Part 2, in chapter one of their book, Rechtin and Maeir define ultraquality “as a level of quality so demanding that it is impractical to measure defects, much less certify a system prior to use.” On a note to the definition they say ultraquality “was discussed extensively by Juran…”
They add that “Demonstrating this limit state in high quality is not a simple extension of existing quality measures… because system complexity has outpaced instrument accuracy.”
Systemic thinking, scenarios, system dynamics, mental models are tools to help us approach system complexity. An explanation based on simple cause and effect, mechanistic thinking, is generally insufficient to explain system complexity. Those tools should be used fully, since “[a]n independent investigation is needed of all the issues raised by the blackout and other reliability problems to ascertain that all necessary remedial actions have been taken, as PEST suggest and the GMH extends.”
To all readers that want to learn about the third way of deregulation
To complement the posts EWPC: People Coordinating and Cooperating with Electrons and EWPC: People Coordinating and Cooperating with Electrons Part 2, in chapter one of their book, Rechtin and Maeir define ultraquality “as a level of quality so demanding that it is impractical to measure defects, much less certify a system prior to use.” On a note to the definition they say ultraquality “was discussed extensively by Juran…”
They add that “Demonstrating this limit state in high quality is not a simple extension of existing quality measures… because system complexity has outpaced instrument accuracy.”
Systemic thinking, scenarios, system dynamics, mental models are tools to help us approach system complexity. An explanation based on simple cause and effect, mechanistic thinking, is generally insufficient to explain system complexity. Those tools should be used fully, since “[a]n independent investigation is needed of all the issues raised by the blackout and other reliability problems to ascertain that all necessary remedial actions have been taken, as PEST suggest and the GMH extends.”
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