Why the IEEE Smart Grid World Forum Requires Learning About T&D Transportation Ultraquality

Turning the Tide on Outages: What are the true costs of implementing—or failing to implement—a stronger, smarter and more robust grid, asks Massoud Amin is a must read, September 29, 2010, article written by Dr. Amin himself on greentechmedia.com.


As expected, Dr. S. Massoud Amin has given us a very important lecture on the future of the electric power industry in the US. I propose that his article should be widely read by those participating in the IEEE Smart Grid World Forum (IEEE SGWF), that will take place in Brussels on the 2nd and 3rd days of December, 2010.

I will try to enhance his insights by adding the complementary issue of electricity policy. When the government initiated the restructuring of the power industry, back in the 1990s, it was because vertical integration was already obsolete. Many American states were at different stages in the process of industry restructuring, but the California crisis put the process to a halt for many of them. I will give next a not well known perspective of why that process was seriously flawed.

In a presentation I gave in March 2006, at the Academy of Science of the Dominican Republic, I quoted Eberhart Rechtin and Mark Maier, from their book “The Art of System Architecting,” by saying that “social system quality… is less a foundation than a case-by-case trade-off; that is, the quality desired depends on the system to be provided. In nuclear power generation, modern manufacturing, and manned space flight, ultraquality is an imperative. But in public health, pollution control, and safety, the level of acceptable quality is only one of many economic, social, political, and technical factors to be accommodated.”

The main flaw in the electric power policy was made by following the traditional political process as “one of many economic, social, political, and technical factors to be accommodated.” I have written many times in both blogs that the essence of the resulting erroneous policy was “economy first, system reliability second.”

As can be seen in the December 2007 article Demand Integration is NOT the Province of Politics, the policy that had already emerged through me is “system reliability first, economy second.” It is such a policy the basis for the proper restructuring of the industry into two highly cohesive systems that are lightly coupled among them: first is the priority regulated T&D Grid system, which will fulfill the requirement of the ultraquality imperative; and second is the complementary Enterprise system on a value chain of wholesale and retail markets that mutually reinforce each other.

That is how the EWPC Architecture Framework (EWPC-AF) emerges. It is also very important to learn that the ongoing smart grid process is compromising the security of the whole system by having a much larger complexity than necessary. By restructuring the industry with the EWPC-AF, the job of the Department of Homeland Security is greatly simplified. I hope that the EWPC-AF also finds its well earned place at the IEEE SGWF.

Plane Crashes in the Making: What Chilean Pilots are Facing

Below you will find an explanation of why the newly appointed managers of the distribution companies EdeNorte, EdeSur y EdeEste will face a moving target, which as pilots of an obsolete planes will not be able to maneuver, as they are not prepared to handle the crisis being face in the Dominican power industry and anywhere in the world with similar situations like India.

How the Smart Grid Could Fight Off Energy Thieves in India is an important news for the Dominican Republic. In that greentechmedia.com report, that Boonsri Dickinson wrote on September 23, 2010, Dr. Rahul Tongia of the Center for Study of Science, Technology, and Policy (CSTEP) in Bangalore, India, gave his thoughts at the GridWise Global Forum.

Right now there are 9 comments under the report, three of which are mine: In the first one, I wrote:

What Dr. Tongia said “…that India shows that every country’s needs are different. You can’t just make a magic black box and use it to deliver energy—it isn’t that easy,” seems very reasonable under conventional wisdom. But, the systemic leverage of the transformation of the electric power industry is more about changing mental models or paradigms than about standards or technologies.

If the US goes ahead with their exclusive and ineffective smart grid, as described by IBM Chairmen, Samuel Palmisano, they stand to lose the great opportunities in the inclusive and effective development explained in the EWPC article Which Country Will Take the Leadership of a Global Vision for Advancing Grids for Customers?

Mariano Orellana wrote on 09/25/10 11:34 PM the following:

During a Chilean Trade Commercial Mission to New Delhi on 2004, we presented our experience done for chilean utility, that permitted decrease commercial losses from 28% to 8%. We detected how distribution was done, and proposed some solutions to local authority, but nothing was possible to be done, and losses were > 47% for a population of around 18 millions.

This is my response of 09/26/10 6:40 PM

Hi Mariano,

Taking aside the political issues, which I know interfere a lot, I respectfully disagree that Chile’s experience is of good use to India or to the Dominican Republic. I suspect that India is a lot closer to the Dominican context than when the Chilean utility reduced losses to 8%. We are in a very different world. If that is the approach that the three new Chilean managers that came to the Dominican Republic will use, they will not be able to solve our 44 year old crisis. That crisis is a moving target as explained next.

In my country, we have a very different market environment as we are exiting the Mass Market Revolution that is inherent to Chile’s experience. We are way inside the Systems Revolution and there is a paradigm shift available to develop the resources of the demand side, which is an area of vibrant open retail markets where I think Chile is now behind. I know the attempt made with the Short Law.

Chile has a great 1980s disruptive design (think of an airplane design) and great managers (think of the pilots) for the Mass Market electric power industry that operate monopoly retail markets. We need an emergent 2010s disruptive design for the Systems electric power industry and a new kind of managers that operate under retail markets competition. That is about what I wrote in my first post.

Oferta de Memorando de Entendimiento para a una Coalición Sistémica Sobre la Estrategia Nacional de Desarrollo del Sector Eléctrico

Nota: los eMails mencionados no forman parte de este mensaje, que será remitido como parte de una serie de eMails ya enviados.

Estimadas y estimados dirigentes,

La oferta que el Plan Dominicano de Desarrollo Sistémico (PDDS), en vías de ser constituido, le ofrece a ustedes es la de servirles como tanque de pensamiento sistémico para la transformación de la República Dominicana. Desde el punto de vista sistémico, esta oferta necesita estar enclavada en la Estrategia Nacional de Desarrollo (END) para poder surtir sus mayores efectos en el sector eléctrico. En ese sentido, sugerimos que dicho en dicha coalición se acuerde y consigne contratar el PDDS para los estudios y asesoría que se juzguen necesarios. Esta intención se concretaría por medio de un Memorando de Entendimiento.

Esta coalición concentrará su atención en el objetivo visionario del PDDS que es el siguiente:

La creación de nuevas realidades para el desarrollo de la República Dominicana

La Estrategia Nacional de Desarrollo (END) centrada en la transformación de los sectores educativo, energía y agua, y salud, como parte del nuevo orden social, cultural, político y económico que:

emerge alrededor de cada medio siglo, por lo que supera con creces las contiendas electorales de cada cuatro años.

corresponde a la Revolución de los Sistemas que se impulsa con la nueva moneda de alto valor que son los sistemas de las tecnologías de información y las comunicaciones y que sustituye al viejo orden con la destrucción creativa de la Revolución de la Producción en Masa cuya moneda de bajo costo era el petróleo.

Resulta que el problema del sector eléctrico es muy cambiante y no solo se nutre de los nuevos adelantos tecnológicos y del cambio de las prioridades de la gente, sino que principalmente ocurre en un momento histórico sin igual en que la Revolución de la Producción en Masa se desvanece para ser reemplazada por la Revolución de los Sistemas. Este es un cambio mayor que pasa de lo que fue el petróleo como insumo de bajo costo a las tecnologías de la información y las telecomunicaciones como producto para la creación de alto valor. Un ejemplo convincente del cambio transformador que está sucediendo en el país se puede ver en que las telecomunicaciones son ya el principal motor de nuestra economía. No obstante, el problema de las restricciones de corto plazo impuestas como parte del acuerdo con el FMI es que suponen grosso modo que el problema eléctrico sigue siendo pensado como parte de la Producción en Masa, que se sustenta con el modelo chileno, y por eso recurren por segunda vez a gerentes expertos que ya resolvieron ese viejo problema de gerencia, cuando lo que realmente se necesita es un fuerte liderazgo para transformar el sector.

El contexto trivial de dicho pacto puede verse muy bien en el editorial del periódico Hoy, del 13 de septiembre de 2010, Crisis eléctrica y ejercicio de prueba y error, que resume el calvario que hemos padecido, según dicen, en los últimos 44 años. Pero, la principal razón no trivial del pacto y porqué no se resuelve la crisis es eminentemente cultural y reside en el pensamiento mecánico que se adueñado de la sociedad y parece ser que también de los organismos multilaterales. Para salir de la crisis en el referido pacto se necesita estar dispuesto a una transformación cultural para poder responder satisfactoriamente la pregunta ¿Se Deberá Nuestro Bajo Desarrollo a la Tiranía de las (Des)Organizaciones Antisistémicas que Disponemos? (ver el mensaje más abajo) A continuación, empleando hallazgos recientes daremos algunos apuntes adicionales a los que hemos enviado anteriormente sobre como terminar de una vez por todas dicho calvario y llevar el sector a los primeros lugares del Foro Económico Mundial.

El caso del emprendedurismo, que ANJE ha estado promoviendo, el mes pasado cobró relevancia con el estudio Who Creates Jobs? Small vs. Large vs. Young realizado por John C. Haltiwanger, Ron S. Jarmin, and Javier Miranda, que refina la creencia generalizada de que las PYMES generan más empleos que las empresas grandes. El estudio divide las PYMES en nuevas y viejas, siendo los emprendedurismos nuevos los que realmente generan la gran mayoría de los empleos. Mi interpretación del estudio, a la luz del proceso de grandes cambios arriba mencionado, es que es evidente que los nuevos negocios sean los que generen la mayoría de los empleos. Esta reinterpretación sistémica del estudio cobra mucha vigencia para la Estrategia Nacional de Desarrollo (END) a la luz del Informe del Foro Económico Mundial (FEM). En dos párrafos de su columna GV.-Global y variable, en Diario Libre, del 13 de septiembre, de 2010, Gustavo Volmar usa el informe del FEM para tratar el asunto Compitiendo con Centroamérica, diciendo:

Costa Rica, que ocupa el lugar 56, nos aventaja en diez de los doce criterios de evaluación. Sólo en tamaño del mercado y entorno macroeconómico la superamos. Especialmente abismal es la diferencia en salud y educación primaria (22 ellos y 107 nosotros), innovación (35 y 118), educación superior y entrenamiento (43 y 99), eficiencia del mercado de productos (48 y 109) y en las instituciones (51 y 117)

La RD tuvo la "distinción" de recibir la peor calificación del mundo (lugar 139) en cuanto a favoritismo en las decisiones de funcionarios gubernamentales, la segunda peor (138) respecto del desperdicio de gastos públicos, y la tercera peor (137) en la calidad de la educación primaria.

Una excelente respuesta a la pregunta ¿Se Deberá Nuestro Bajo Desarrollo a la Tiranía de las (Des)Organizaciones Antisistémicas que Disponemos? que plantea la necesidad de redefinir la END con el PDDS se sintetiza en los aspectos culturales con “La RD tuvo la ‘distinción’ de recibir la peor calificación del mundo (lugar 139) en cuanto a favoritismo en las decisiones de funcionarios gubernamentales, la segunda peor (138) respecto del desperdicio de gastos públicos.” Debe quedar muy clara la reorientación que necesitamos en la END para impulsar la innovación en la Revolución de los Sistemas con una estrategia de emprendedurismo concentrada en salud, educación y electricidad.

Es importante destacar que el problema de la electricidad no ha devenido en un problema esencialmente institucional que surgió luego de la capitalización. Es totalmente a la inversa, el grave problema institucional, como parte de la razón cultural, fue el que precisamente llevó a una reforma antisistémica del sector, que induce al mayor desperdicio de gastos públicos y que impide a nombre de la institucionalidad que se reestructure el sector para abrirlo a la innovación. Es así como encaja el eMail enviado “La Respuesta al Desempeño Antisistémico de las Edes y la Amenaza de la Profundización de la Crisis Económica Global,” que sigue a continuación.

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

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

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

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

First posted in the GMH Blog, on September 1st 2010.

Copyright © 2010 José Antonio Vanderhorst-Silverio. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, without written permission from José Antonio Vanderhorst-Silverio. This article is an unedited, an uncorrected, draft material of The EWPC Textbook. Please write to javs@ieee.org to contact the author for any kind of engagement.

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Senate Majority Leader Harry Reid (D-NV)

Honorable Senator,

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

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

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

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

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

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

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

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

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

Best regards,

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