Al Gore leadership challenge is based on leading expert advice. EWPC is the first holistic step ready to be implemented in an Energy Policy Act that satifies the non-trivial power system requirements laid out by the leading experts power industry insiders the late Fred C. Schweppe and Jack Casazza.
Is Gore's Revolutionary Leadership Challenge Feasible?
By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
First posted in the GMH Blog, on July 21st, 2008.
Copyright © 2008 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.
As an expert, I state that Gore's revolutionary leadership challenge is feasible. I agree with what he states “It is achievable, affordable and transformative.” Ten years is more than enough to get out of the supply side (fossil fuel central station) system to a leveled playing field system in which the development of the resources of the demand side have equal opportunity as the development of the resources of the supply side.
Electricity Without Price Controls (EWPC) is a holistic market architecture and design paradigm shift away (that emerged about two years ago) from the obsolete and original Vertically Integrated Utilities (VIUs) paradigm vintage 1970. The VIUs paradigm had demand and customer reliability as an externality.
EWPC is based on non-trivial insights of the power industry at the outset of deregulation. Two leading experts that opposed wholesale deregulation for entirely different reasons were Fred C. Schweppe and Jack Casazza. By not considering their expert advice, the flaws in the political system have led to a series of baby steps, as Gores calls them, which have stopped the necessary revolution away from fossil fuels.
Late MIT professor Fred C. Schweppe led the development of Spot Pricing of Electricity (SPoE) in the 1980s. Schweppe and his team unveiled part of the theory and practice to enable the transformation of the electricity industry centered on the development of the demand side. Such transformation was cut short with Schweppe's death and a “misunderstanding” of his spot price based regulated energy marketplace (SPBEM).
The SPBEM was recommended by the team as a required previous step to wholesale deregulation, as many questions were still unanswered. However, the SPBEM was bypassed and the deregulation based on the development of the supply side debacle was the result.
Kevin Bullis writes of unanticipated consequences. They are the result of symptomatic solutions pushed by special interests instead of systemic solutions as Gore is calling for. A great example can be found in The BIG California LIE, whose summary states “The BIG LIE is that retail competition is impossible in electric markets. The implementation of a competitive retail market was the center of the debate in California. Instead of cooperating to implement it, the three big California utilities, that didn't care about the end-custumers, acted very irresponsibly. EWPC is the paradigm shift to show that retail competition is not only possible, but absolutely necessary to turn the electricity industry into a vibrant value added business for all stakeholders.
EWPC answered the questions and extends SPoE which is centered on the development of the resources of the demand side. Jason Black's MIT PhD theses envisioned demand and customer reliability integration, under the open transmission access (OTA) incremental extension of the VIUs paradigm. FERC has issued instructions to integrate demand under the existing OTA paradigm and the result is a large increase in complexity and confusion. The design mantra simplify, simplify, simplify is waiting to be applied to the system structure.
The other leading expert, Jack Casazza, concentrated his comments on the great loss of coordination savings by wholesale deregulation as the transmission system was being operated beyond its intended design criteria. As a result, it is very easy to show that transmission congestion is nothing more than increased reliability risk. The resulting policy is one of economy first, reliability second, E1R2, that not only decreased transmission expansion, but obliterated very large coordination savings. EWPC retains those savings and adds other substantially large saving by coordinating the development of the resources of the demand side to integrate them to power system planning, operation and control.
The EWPC paradigm shift adds the need for transportation (transmission and distribution) ultraquality open access. Ultraquality satisfies a criterion identified by Schweppe that enabled the discovery of the (system, not customer) reliability first economy second (R1E2) policy.
Applying the R1E2 policy a large reduction in complexity results in the separation of two interdependent markets:
1) A controlled transportation market and
2) An open market on the generation - retail - customer value chain, under prudential regulation, instead of price controls to the customers.
Readers are advised to act now, by calling on every candidate, at every level, to enable an EWPC Energy Policy Act. In order to act, readers may consider the 9 out of 10 most commented and 9 out of 10 most read EnergyBlogs.com articles which are based on EWPC. Below I suggest reading 10 of those articles, any of which may interest you to write to a candidate.
Most Commented
1. Can the Power Industry Eliminate its Price Controls to the End Customer? (62)
6. Campaign for Fair Electricity Rates (19)
7. An Overdue Debate: Customers’ Price Controls (18)
Most Viewed
1. Nanosolar Breakthrough and the Old Paradigm (1640)
2. The Sixth Disruptive Technology (1607)
3. Financing and Developing Wind Projects (1417)
7. Demand Integration is NOT the Province of Politics. (1304)
8. Slicing the Last of the Regulated Monopolies (1259)
9. Engineers Needed for Lower Prices (1251)
10. Free Market and Central Planning, Under R1E2 (1243)
Reference: Al Gore's Inconvenient Plan by Kevin Bullis
Al Gore's challenge is best explained with the EWPC article "Leadership Answers What to do First" (hit link http://www.energyblogs.com/ewpc/index.cfm/2008/4/1... ), whose summary is "The answer to the question of what to do first is for the global power industry to get out of the wrong jungle to produce a EWPC based EPAct as soon as possible. That is the kind of leadership needed to face the inevitable fundamental changes required to significantly reduce today's legislative and regulatory uncertainty."
Construction costs for all forms of generating capacity have at least doubled in the last two years, and that's for largely incremental additions rather than the wholesale replacement Mr. Gore envisions. There's considerable opposition to ANY new generation and transmission development by environmental and community groups that can only be overcome quickly by suspending due process. There's not enough skilled labor or engineering talent. All these factors mean that if it can be done, it will be enormously costly and enormously disruptive. I doubt the public would stand for it if they knew the cost, just as public opposition to offshore drilling in heretofore protected coastal areas is waning in the face of high gasoline prices.
I'll take Mr. Gore more seriously when he gives up his private jet and his 10,000 square foot home for digs that better suit the image of a committed environmentalist.
Nicholas Kristof wrote an article today (2005) in the NewYork Times entitled "Nukes are Green". The headline was "The biggest environmental threat we face is global warming, not nuclear power."
I made the following comment to his article, which I think might be useful to the PLMA case.
josevanderhorst - 9:04 PM ET April 10, 2005 (# 20703 of 20703)
Nukes vs Energy Efficiency and Demand Response
The argument that nuclear power is green needs to consider nuclear waste costs to be complete. Natural Capitalism, the book written by Hawken, Lovins and Hunter Lovings, has enough insights about waste reduction to develop different and solid arguments, even without considering nuclear power. Performing whole-systems engineering of the electric power system will lead to the preservation of ecosystem services through the integration Energy Efficiency (EE) and Demand Response (DR) to other existing technologies to sharply increase economic efficiency. The book recommends starting to solve the problem from the demand side with EE, in such an aggressive way as to avoid capital investments, in generation, transmission, distribution and utilization, by what they name as "tunneling through the cost barrier". DR is a risk management tool, based on information technology and advanced metering, which leads to fully functioning, and the integration of, wholesale and retail markets. DR is like the glue to integrate distributed generation and storage resources, and the means to mitigate short run price volatility, and long run boom-bust behavior. Just as the DC-3 designers had to integrate 5 technologies, to ushered in the era of commercial air travel (see The Fifth Discipline of Senge), the last of which was wind flaps, so are DR and EE the needed technologies to start the era of reliable and cost effective commercial electric power system.
When Bill Clinton ran for his second term as president, he claimed to be the "Infrastructure President". HE LIED. I do not believe that Al Gore and friends can offer any more support for the infrastructure required to implement renewable energy than Clinton did. Compounding the quandry, the current admistration has been draining the monetary support from our infrastructure to pay for our commitments in the Middle East; the trillions of dollars that it will take to fix the energy dillema that we have brought upon ourselves will not miraculously appear from the heavens above. Any ideas?
So, please take a look at the first two paragraphs of "100 percent is not the issue" in the link http://www.technologyreview.com/blog/editors/22098... . I disagree with concesions on either nukes or clean coal. We need to let the market decide and for that reason a EWPC based EPAct will set up the market architecture and design rules for an open market on the wholesale and retail value chain. We need to get governments and lobbyists out of the open market. Those that don't believe renewables will pass the test should invest and face the risk of obsolescence. Look also ONLY at a paragraph in "Re: Leadership???"( http://www.technologyreview.com/blog/editors/22098... ) that says "Assume for a moment that Mr. Pickens and his peers can keep renewable energy growing at 40% annually for the next decade. Why shouldn't they? At that rate, it doubles every two years. In 2010, renewables make up 5% of our electricity mix; in 2012, 10%; in 2014, 20%; in 2016, 40%. Assume that growth of renewables slows at this point but that Mazria's efficiency improvements are valid and that we still have nukes and dams. We're over the top in ten years."
Gore is challenging "... all Americans - in every walk of life: to our political leaders, entrepreneurs, innovators, engineers, and to every citizen." That is a leadership call that humanity, no just the U.S., is going to be moved by if the U.S. adopts it. Such a call under an ethical political system to save not the earth, but our people, is based on solid non-trivial understanding by leading experts. Such a call, if the intelligent and important people, like you, agree to it, is not to fix the energy dilemma. There is no quick fix possible. We need to go to the fundamental solution of the environmental systemic problem "to end our reliance on carbon-based fuels.".
The first signs of a brewing political storm struck Friday when a
state senator accused a utility commissioner of lying about what
will happen as electricity rate caps expire during the next 18
months. - (YellowBrix)
--> http://www.energycentral.com/global/news_text.cfm?...
Looks like you'd better grab Sancho and head for Pennsylvania, Jose.
Forget about rate battles and concentrate on the EWPC based EPAct to let the market decide.
Forget rate caps and go back to expain what happen in the The BIG California LIE. The late Donnela Meadows, who in 2001 was the director of the Sustainability Institute, made a strong guess which I have confirmed after the facts on many of my posts. This is part of what she wrote on "Restructuring and Faith in the Market" (hit link http://www.sustainabilityinstitute.org/dhm_archive... ):
First, 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.
There are no delusions like unsubstantiated delusions. You've got to get a hold of yourself!
As can be seen in the EWPC article "Let's Avoid Many Expensive Fiascos" (please hit the link http://www.energyblogs.com/ewpc/index.cfm/2008/8/2... ) the leadership challenge is the means to end up all the hard very questionable data (substantiated delusions) of old utilities and regulators that lead to a Greek Tragedy in the revolutionary times. Listen to Jeanne Liedtka in the video to learn that "growth opportunities is about making sure the future diverges from the past ... so to extrapolate data from the past to justify growth projections does not work very well."