SMART GRID -- Education + Information + Knowledge = End of Monopoly
With the entire "Transmission Network Interconnected", the end of the Monopoly will ultimately depend on some regulatory rules. The consumer can choose which Utility to buy energy and what energy source will buy. For example, Consumers, Community, Cooperative, City or State located in the area of distribution of a utility, you can buy electricity from any Utility. If the "Tariff Structure" of a Utility is cheaper than that of its region, it can make the choice of which is cheaper.
The trade in energy will have changed their rules to allow "all classes" of consumer access to what we call the "Free Market". Consumers can buy power in the market through a contract or auction, the Utilities sell their energy in this market and the "consumer or group of consumers" will buy the energy by the lowest bidder. The contract of sale shall contain the amount of energy, its source and will have a specified period, which would be renewed or not.
These auctions were held from time to time, Regulatory Agencies set the rules and duration of these contracts.
If the purchase is renewable energy, even if the Utility in your area delivered to your home energy from fossil, you'll know that somewhere a consumer is receiving power from renewable sources -- We recall that the entire transmission network will be connected.
The local Utility in which your house is connected will be responsible for delivering energy and do any service requested, the Utility that sold the energy, put in the "Transmission Network Interconnected" the amount of energy purchased -- Fossil or Renewable. The Utility that sold energy will pay the operator of the network, and the Utility of their region a "Toll" for using their network, the energy bill Consumer be paid to the Utility sold energy.
This possibility is easy to implement and gives consumers the power to choose who to buy the energy that is being used in your home. In the beginning we have some confusion or unforeseen situations, but with time things will work fine.
This model is already used in some countries for consumers of High Voltage and with demand above a certain value.
Prepare for an electric system that is cleaner and more efficient, reliable, resilient and responsive -- a Smarter Grid.
The Smart Grid transforms the current grid to one that functions more cooperatively, responsively and organically smart. Open architecture, Internet protocol, Plug and play, Common technology standards, Non-proprietary and Interoperability.
Fine concepts all, yet one of the reasons the electric industry has been slow to take advantage of common technology standards -- which would speed Smart Grid adoption -- is a lack of agreement on what those standards should be and who should issue them.
The role of the Regulatory Agency is to act as an objective facilitator, allowing the best ideas to prove themselves. Smart Grid efforts are well underway on several key fronts, from forward-thinking utilities to world.
We will offer the consumer some smarter choices, in addition to changing habits and behavior. Surely, this is the least that we expect of an intelligent network?
Comments
That's a key concept which needs to get through to regulators and customers. The reasoning used historically to limit the free market to only very large customers has been transaction costs, since billings needed to be totaled up manually, or by very slow computers. Modern computer systems can eliminate that cost, reducing the redundant storage of a years 15 minute interval billings for a customer to $0.002 . Modern database and communication technology, ebilling, etc. can open up the "Free Market" for all customers, thus enabling all the benefits of authenticated demand management, flattened load profiles, high proportionate integration of variable renewables, etc. etc.
So two of those segments will lend themselves to competition; Generation and the REP's.
However the T&D segment (IMHO) is unlikely to change within the next millennium for the very same reasons that the various Telco's and Cable companies hold virtual monopolies in their respective markets; it has been cost prohibitive to provide competition using the same technology/infrastructure. Even if it where technically feasibility to offer an alternate (cheeper) delivery method, I would question the type of reception one would get from all the various Federal, State, City, and community regulators with anything that would require laying down what would be (at minimum) perceived as redundant and or overlaying utility infrastructure.
IMHO T&D needs to remain the one regulated sector of this puzzle; after all isn't it what is the critical infrastructure?
Cheers!
Eric
Power - Generation/Transmission/Distribution - are services of "public utility" and should be regulated by state and organs of society.
But they should not continue as monopolies, the main concept of the Smart Grid is precisely the opposite of the concept of monopoly.
Information and knowledge can break any monopoly!
The technological backwardness in the area of energy is based on the lack of competition.
I must agree with Len. With only one set of local distribution wires feeding customers, it makes it very tough to come up with a good competition system because only one utility company owns those wires.
I suppose one could devise a scheme like they do in the telephone landline business where multiple service providers compete for customers, where one company (typically a Bell company) owns the wires. My understanding however is that this doesn’t work very well because the company owning the wires must be kept a strong a viable company to maintain reliable service. It ends up being biased against the competitors who don’t own the wires.
The real competition for local electricity distribution companies in the future, in my view, will come from customers themselves who choose to make their own power on their own property for their own use. If there are enough of them someday, and their capacities can technically power multiple customers, governments may even decide to allow them to produce power for themselves plus set up small local grids to sell excess capacity to their closest neighbors. Maybe this is dreaming a bit, but I see it happening in time, especially if rates from the main utilities skyrocket much faster than inflation, and anger many customers into setting up their own generators.
To have competition in the area of energy we do not need to create local networks.
In Brazil for over 5 years high-voltage consumers buy their energy from the utility that he likes.
The utility that sells energy, pays the local utility - which delivers energy - a service charge for this service.
As the transmission system is integrated whole, the utility that sells energy contractor, put that energy into the grid.
This has worked very well, with well-defined regulatory standards, and bringing the competition to this market segment.
If we are talking about "Smart Grid " because we can not carry this same philosophy to other market segments.
Does all the intelligence, flexibility and technology that we're adding to the grid, could not also add competitiveness to all customers.
Your choosing to call the generating entity "the utility" is where the confusion enters. Here, we would typically think of the distribution entity as "the utility" and promote making it the only monolopy, with generation/supply done by competing free-market companies.
Joao, Len has proposed exactly such a wide-open competitive market system between generators for all customers in his IMEUC proposals on detailed this website. Under such a system there would be no restrictive regulations in the way of technology in the hands of customers, because they would own and control the technologies necessary to participate in such a market.
and...
...., because customers would buy, own, and control the technologies from anyone selling them, necessary to participate in such a market.
By the way, one of the major values added for solar is unavailable today according to the best information I can obtain. Living in earth quake country I am especially cognizant of the value of islanding solar generation when the grid is unavailable. Current home inverters cut output to the grid when the grid goes down, but no one seems to have seen the obvious next step. Namely send output through a port that could be connected to the home through a break before make double pole switch like those that are coming into use with Honda generators to island some or all of house circuits. Or have I missed something?
The greater number of people talking and thinking the same thing about Smart Grid, is a sign that we are trying to make things right.
Eliminates gaming (eg. generators / sellers will be very wary of exposing themselves to the charges), strongly encourages required new build of transmission.
Agreed regarding the usless overhead of middlemen. That's why I propose having every customer directly negotiate with private generating entities directly for supply on 15 minute intervals. (Handled by computer software embedded in each smart meter). To now, this is only done by large industrials, because the transactions are all handled manually. IMEUC automates the entire process end to end, effectively eliminating the transaction costs and allowing ALL customers to purchase at wholesale prices.
But the government monopoly or not, in the area of energy has a direct cause for the delay of technological development in the use of our natural resources, in all countries of the world's energy sector has linked to monopolies, governments and big money and this ratio varies from one country to another depending on their democratic freedoms.
The area of communication and information has reached a level of development and innovation, just to escape the shelter, sometimes easy to monopoly.
Communication and Information has a unique characteristic, which is the capillarity, them there should be no surprise that the revolution would bring to the area of energy.
They say that consumer participation is essential to develop all the tools associated with the SMART GRID, but until now, the only option given to the consumer is changing their consumption habits and behavior in energy use.
The relationship between the Utilities and the Consumer may become increasingly difficult, with more information and the possible increase in their energy bills consumers are more aware of their rights.
Switching suppliers or sources of energy are not even discussed, and are not priorities, because the consumer is captive and trapped underneath the basket.
The modernization of infrastructure in the area of energy is “extremely necessary” in the world and should be treated in a globalized way, only the solutions must be local and targeted.
There's a reason why Californians pay the highest electrical rates in the US, and it has very little to do with monopolistic practices of the generators...or as I say, maybe I don't understand the set up in the US.
Paul Stevens
In any event, you might be interested in a proposal for a 'franchise concept' on T&D put forward in one LinkedIn group I follow,
John
John