EWPC based EPAct is Smart Grid Prerequisite

This is a comment posted under the EnergyPulse article Intelligent Electrical System - a Prerequisite to Smart Grid (please hit red hyperlinks), by Manvendra Tewari, Domain Consultant, Wipro Technologies

First posted on the GMH Blog on March 30th, 2009

Dear Manvendra, Pranav, and Alok,

Please look at a different power industry whole that is trying to emerge since the 80s.

Under the investor owned utilities paradigm (IOUs) incremental extensions, it seems to be true that “Each utility has to devise its own roadmap and identify milestones towards achieving Smart Grid.” But that extension, on top of the many extensions so far, like EPAct 92, open transmission access (OTA), capacity markets, NERC mandatory requirements, etc., etc., a new roadmap is just too much.

A real paradigm shift has been waiting before OTA, which seems a simple thing that can be corrected by reintegrating T&D. But, that is not the case as the investments and complexity involved in the separation of T and D is now overwhelming, as to lead to very large value destruction. That is the main reason for the status quo to keep extending the IOUs paradigm.

But, as you can see in the EWPC Just as Pogo, IOUs Found the Enemy, “Just as everybody else, power industry investors win by changing their IOUs paradigm mental model. Well in agreement with the insights of three DOE’s Electricity Advisory Committee reports, a transformation to the end-state of the power industry, for quite some time, is the EWPC paradigm that allows the application of two crucial socioeconomic insights.”

In addition, the OTA flaw had a global pervasive impact. With its origin in energy policy act (EPAct) 92, the flaw got even into the purpose of the COMPETE Coalition, which advocates: “… well functioning, competitive wholesale electricity markets which enable state governments to implement retail electric service options best sited to their regional needs and which enable consumers to benefit from the best possible price and service."

To undestand that competitive retail markets are a prerequisite to the smart grid, see the EWPC article How to Increase the Leverage of Stimulus Bill to Global Green Energy, whose summary states “By balancing the influence of supply side and demand side, it is possible to develop retail markets and wholesale markets that mutually reinforce each other to increase the leverage of the economic stimulus and to set a leadership example for the whole world.”

In a sense, the smart grid is a lot more about the development of the resources of the demand side and so I assert that the prerequisite of the smart grid is the EWPC paradigm restructuring. To enable system leverage, then a reform with an EWPC based EPAct is needed.

Please follow the progress on EWPC on Twitter.com using the hashtag #EWPC.