Adrian Lloyd’s is happy to listen. His opinions, which he may change, as he is a well versed and important person, are responded below.
This is how EWPC completes the answers Adrian Lloyd comments:
1) Be against isolated distributed generation. Mixed feelings!
For the 3rd time, “… Existing national power grids won't disappear.
”In addition, many customers can remain integrated to the grid without being interconnected. That is how most customers operate their distributed resources in the Dominican Republic, with which they will be able to provide Demand Response services to the grid.
2) Suggest that the grid is for one way traffic from central station to customers. Bad!
Supply side only risk management needs generating reserves (sometimes in the order of 35% of capacity) with some of them to operate a few hours in the year to service customers reliably. One way traffic used to be the way with inactive demand as an externality. Active demand should be integrated to power system planning, operation and control to increase power industry efficiency.
Also read under the article EWPC As The New Internet my response to Malcolm "Problem is that millions of distributed generators will results in no income for the people that supply and operate the grid. No money no maintenance, no maintenance no grid and the scheme falls apart."
3) Saying that the power system should be operated in the Normal Operating State. Good!
That is satisfied with the essential requirement of transportation ultraquality under EWPC. Read the article Synthesis Proposal Agreement of EWPC please.
4) Power quality needs to be solved. Good!
Same response as in item 3.
5) There is problem with variable generation. Good!
Read the article Integrating Uncertain Generation to the Grid posted above please.
6) Wants to know: Who pays? Consider all the costs. No more subsidies. Good!
Leave that to the open market value chain and not to the Government or the utilities. I like to stress from the above article Financing and Developing Uncertain Generation, that the question “Who pays?” is always answered by those that control the political process, as debates get locked, and to get them unlocked the hierarchical force of the authorities is employed. Please read also Slicing the Last of the Regulated Monopolies to complete the response.
Reference and context: Distributed Architectural Renewable Energy Generation, by Brian Braginton-Smith, Executive Director, Sustainable Resources Group.
Jose,
A couple of comments on your posts.
The example you give of the Dominican Republic is interesting, as it shows how people respond to an unreliable supply rather than an unconstrained market. The corollary is vegetables. Most of us could grow vegetables in our back yards if we wanted to, but we chose to get them from a retailer – it is convenient, reliable and cheap. Those people who do grow their own choose to do so for a variety of reasons, which usually does not include a consideration of total cost (if they tell you they do it because it is cheap, they are generally placing a zero or low value on their own labor required to dig and tend the patch) . If however the supply becomes unreliable, then many more people start growing their own.
In the Dominican Republic, the unreliability of the electricity supply has not caused 100% of the population to install DG, because the majority of the population cannot afford to do so. If you were to give them a choice of choosing between an opaque, regulated public supplier that delivered reliable power or an unconstrained market where they were free to buy from whatever supply or install their own DG, but which was unreliable, my guess is that they would choose the former. But as it stands all that the Dominican Republic seems to prove is that when you can't buy it in the market, those who can make their own.
In my opinion the issue of price controls/mandated prices vs a fully competitive market is separate from the issue of grid ownership and grid charging. Grids are natural monopolies and therefore have to be regulated. If the regulatory structure is right, they deliver timely investment and reliable systems at something approaching least cost. If you do not believe me, take a look at the UK which now has one of the most reliable grid systems in the world. Investors are quite happy to invest in the grid operators, because although the returns are relatively low, they are pretty certain.
Against this, you have to look at the UK's supply market, which appears to be heading for a supply shortfall despite being fully competitive, with full demand side participation possible in the market and with less than 4% of the total supply subject to controls or subsidies.
In this case EWPC has failed to deliver adequate investment in new generation or demand side participation, despite the need for both being flagged for more years than I care to remember. In my opinion, this is primarily due to market design with a lesser effect from environmental legislation (creating disincentives to invest in new coal plant or keep existing ones running). If the market continues to fail as I think it is doing, demand will soon outstrip supply and will lead to much higher prices.
This should spur on smart metering (where a number of utilities have trialled it already with a view to curtailing domestic consumption at peak times) and DG, but not at a scale or speed of deployment that will solve their problems.
IMHO the problem with all EWPC theories including the UK is that they try to commoditize electricity so they can apply conventional economics to the industry whilst ignoring the value of capacity, the realities of huge lead times for new generation and the challenge of maintaining the grid in equilibrium. As I told Len Gould in my last post, I don't mind creative engineers. Its creative economists I fear.
Electricity is not a commodity. It is an essential requirement of modern life and security of supply should be placed ahead of consideration of cost. I realise I am probably the guiltiest when it comes to reducing debates to cost, but then I am a money man. What I should have talked about was value. This is why in places that have an unreliably supply, people install DG. The cost may be higher than the cost of grid connected electricity, but it is still lower than the value these people place upon it.
I would like to continue this debate another time, but right now I have to go – Mammon is a very demanding task master.