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Brownlee: Not an ardent follower of fashion. Merely obsolete.

Written By: - Date published: 2:35 pm, November 11th, 2009 - 15 comments
Categories: energy, greens, national - Tags: , ,

One of the things that has surprised me about the government and Brownlee’s energy policy is that it is so mundane and 20th century. In every other area of their political electoral strategy we saw a pithy slogan, often pinched from overseas, substituting for policy and dumbed it down to the level of the dittoheads and  ‘punters‘ that National likes to fool. Of course the implementations are a lot worse than the rhetoric because they really don’t seem to have a government strategy to back up the electoral one. But not Brownlee..

But the pithy slogan “Smart grid” is up for grabs, but neither National nor Brownlee seem to know about it. Jeanette Fitzsimmons knows what she is talking about in energy, so she would. However perhaps Brownlee’s fear  that danger of her knowing the portflio better than he did is what caused yesterdays events. What she didn’t know, she couldn’t help him to correct.

Anyway, back on smart grid’s – according to the Economist

AMERICA wants one. So do Australia, Brazil, Britain, China, Germany, Italy and Japan, to name a few. Even Malta is building one. Big utilities, such as Electricité de France and American Electric Power, are keen. So are industrial heavyweights such as GE and Siemens, and computing giants including Cisco Systems, Google, IBM and Microsoft. Al Gore and other environmentalists are ardent advocates. So are dyed-in-the-wool capitalists such as T. Boone Pickens. Endless surveys suggest that consumers would embrace them enthusiastically. Barack Obama is a big fan: he rated them as one of the highlights of America’s stimulus bill, which lavished $3.9 billion on them. Businesses, sensing an opportunity, are investing with alacrity (see article). No one, it seems, has a bad word to say about smart grids.

The slogan has a political advantage in that no-one actually knows what it means. That makes it a very good slogan in NZ conservative politics. You can make it mean anything you want.

But Brownlee doesn’t appear to be into the current world like the one that Joyce and Key follow of having meaningless electoral slogans and ineffectual governance. To me, Brownlee seems more a man of the 20th century from the way that he keeps looking for faded and failed solutions in energy. It reminds me of Robert Muldoon in the 1970’s and 80’s, always trying policies that might have worked in the 1950’s. Explains why it looks like our grid and energy systems will get even worse under his guidance.

Back on my topic again. The title of the Economist leader is “Clever, but unprincipled“. That seems like a natural for a National ‘policy’, all slogan and no thought.

As the Economist says..

Moreover, the biggest impediment to the spread of renewables in most countries is not an antiquated grid, but the lack of a price on carbon. Consumers waste power not just because they cannot regulate their spending very precisely, but also because it often does not cost very much. Most utilities have an incentive to sell as much power as they can, dirty or clean.

In short, smart grids are not a substitute for a proper energy policy. Mr Obama and other politicians will still need to put in place regulations that encourage investment in energy efficiency and cleaner forms of generation—almost certainly meaning higher bills, however smart the grid. That, naturally, will be a lot less popular than a miraculous technical fix.

Umm perhaps that explains the reason that Brownlee hasn’t jumped on the bandwagon yet. It involves words that Brownlee doesn’t like – policy, regulation, investment, and price. Not to mention imagination, political work and joining the 21st century.

It is a pity, because some of the ideas around this slogan are probably applicable to NZ. Improving our grid and generation facilities to use and store renewable energy seems like a natural for NZ. Hot-topic points to Spain which has been showing the way to use the surplus power to run the natural batteries of a renewables grid. Use the off-peak generated renewable power by pumping water into dams, then release during the peak load times.

Of course this is probably a bit complicated for Brownlee. He likes coal stations for no apparent reason. Their carbon costs under the Kyoto agreement are horrendous. I’d anticipate  their economic being even worse under the Copenhagen agreement when it gets off the ground. If the power generators don’t pay it, then under the governments emissions trading scheme, then we the taxpayers will.

I guess Brownlee is still stuck in the mid-2oth century, because I still haven’t heard him articulate what he wants to do in the energy sector. All he has managed to do is say what he won’t do. Like help reduce consumption or figure out how to bring more cheapish energy online.

15 comments on “Brownlee: Not an ardent follower of fashion. Merely obsolete. ”

  1. gingercrush 1

    [deleted]

    replacement link
    replacement link

    [lprent: I put the links in that you inadvertently missed (and removed the copy/paste). Do you actually have a comment about it? ]

    • lprent 1.1

      It is interesting that appears to be about the only time I can see Brownlee mentioning smart meters. Then it was to say that he’d wait a while.

      From the Colin James link, you can see Bownlee’s issue…

      Brownlee’s problem is Adam Smith’s second law: that businesses will fix prices if they can. Telecom played hard according to that law for more than a decade before the government got out the sledgehammer.

      The electricity oligopoly has weak incentives to make life better for consumers and strong incentives to fatten profits. The previous government eventually started to impose regulations.

      Of course in what is effectively a natural monopoly situation, the government always winds up having to regulate.

  2. gingercrush 2

    Not really. I failed science so this stuff goes right over my head. Only you can see Brownlee has already borrowed this slogan. Though I don’t see him doing much about it. And I wonder whether Smart Grid is merely a slogan for any infrastructure in power supplies since Orion was using the word when upgrading some power lines and a sub-station. That doesn’t exactly sound as if its something smart.

    Also I thought a price on carbon was bad yet that article seems to be suggesting a price on carbon is necessary for this technology to happen. As for the article suggesting power prices are cheap. I can’t imagine numerous pensioners and low and middle income families think prices are cheap.

    • lprent 2.1

      If there was no pollution cost on coal then it is one of the cheapest fuels around.

      So if you’re prepared to leave opencast mines as kiddie traps as happened with the 19th century mines in Britain, or leave vast tailings slopes to crash in on villages a century later – the coal gets even cheaper. That is the past cost.

      Currently we’re in the position where coal is one of the major contributors to changing the composition of the atmosphere (and it is hard to find even a CCD to deny that these days). Consequently the miners should pay for the costs of cleaning it out of the atmosphere. That is what Kyoto is about – user pays. In this case extractors pay and pass the cost onto the users.

      If coal was paying for the costs of the removing their contributions to atmospheric pollution either by charges or by scrubbing, it goes from one of the cheapest fuels to one of the most expensive.

      Which of course is why Brownlee and his government are choosing to lump the cost directly onto the taxpayer. It is a hidden subsidy to polluters.

  3. Draco T Bastard 3

    Ha, the Economist with some good points. It really is regulation that makes things better and not some mystical invisible hand.

  4. Jono 4

    Just a comment about power price setting by utilities:

    The Atlantic a couple of months ago had an article on this issue re California, where power is consistently lower per capita than most other states. In part it is put down to a benign climate, but a large part of it is that utilities make more money if they sell less power.

    “the policy is known as “decoupling’ because it severed the link between consumption and profits. Here’s how it worked: the commission first set a revenue target for utilities by calculating how much money they needed to make to recover their fixed costs, plus an approved profit rate. Next, the commission estimated how much power it expected the utility to sell. Then, it established an energy price that would allow the utility to meet its revenue target at the expected level of sales. If the utility sold more power than it needed to meet its target, the difference was returned to consumers. If it sold less, rates were increased to make up the difference. Applied to natural-gas sales in 1978 and electricity in 1982, decoupling had a profound effect.

    “Utilities were rendered indifferent to sales,’ says Ralph Cavanagh, a senior NRDC attorney and central figure in California energy policy since the late 1970s. “They couldn’t make more money by selling more; they didn’t lose money by selling less. Their addiction to increased sales was eliminated.’ In September 2007, the state utility regulators shifted the incentives for utilities further toward conservation by allowing them to split the savings with customers whenever energy use falls below state targets.

    How much those twin rules—decoupling and decoupling-plus, as they are known—have changed the motivation of utility companies became clear when I visited Peter A. Darbee, the chairman, CEO, and president of Pacific Gas & Electric. Darbee works on the 24th floor of a San Francisco office tower in a glass-enclosed corner office that looks like a ship’s bridge. The office has panoramic views of the Embarcadero, and on the windy, sunny day we spoke, boats silently glided through the water in the distance, as if a painting had somehow been set into motion.

    “I think the biggest key to the success in California was putting in place the right incentives for California utilities,’ Darbee noted. Echoing Cavanagh, Darbee said that decoupling made the utilities “neutral or indifferent’ to sales; then decoupling-plus provided utilities “an incentive to sell less power rather than more.’ With those economic signals nudging the utilities, he continued, “all of a sudden you’ve unleashed the power of these huge organizations to work with you rather than against you.’ Darbee said that sometimes when he’s out sailing with customers, they will say to him, “‘Peter, you would love us, because we have all sorts of lights and air conditioning and we are using a lot of your power.’ And I look at them and say, ‘Well, actually I’d prefer that you use a lot less.’ And they look at me like I’m crazy. And then I say to them, ‘We actually make more money if we sell you less power, and we make less if we sell you more power.”

    Subscribers can visit the article at http://www.theatlantic.com/doc/200910/california-energy

    [lprent: shifted to blockquotes]

  5. George D 5

    Don’t forget, he hates efficiency too!

  6. factchecker 6

    For a statement about what he wants to do, why not go and read his speech from February:

    http://www.beehive.govt.nz/speech/unlocking+new+zealand039s+energy+and+resources+potential

    No mention of coal there. Actually he says:

    “New Zealand’s electrical energy future will rely on more wind, hydro and geothermal. Gas will bridge us to that future.”

    In fact I think National’s 2008 energy policy talked of the phasing out of the Huntly coal station.

    And what about this comment on smart meters – “Fully enabled smart meter technology is an important step for the future. Consumers need to be able to make choices about their power usage in their homes”

    http://www.beehive.govt.nz/release/smart+meters+smart+way

  7. insider 7

    If building a smart grid were as easy as some imply it wouldn’t take $4b to try and build one. The US isn’t the best example perhaps to use as they have multiple interconnecting grids and operators whereas NZ has one (or maybe two if you consider the NI and SI as often separate).

    It’s easy in theory – overlay the system with a communications and software infrastructure that monitors and responds in real time. It’s much harder in reality because of the vast number of connection points many of which change their demand profile every second, as well as maintain frequency levels and voltages within a consistent range . FOr a grid to be truly smart it has to go from the top to the bottom ie generator to consumer. That will require huge computing power to process the large amounts of information and manage to still keep it as near flawless as the power system currently operates. There is a significant cost benefit hurdle that needs to be overcome.

    As for smart meters, Brownlee doesn;t have to do anything as about 90% of the country will get them over the next five or so years without any regulatory intervention. In the UK where they have regulated they wont get anywhere near that level till 2020. In Victoria they have been trying to install them via regulation for over five years and have just started rolling them out whereas we have over one hundreds thousand already in. In Quebec they pulled back from doing it because they said it just didn;t make sense.

    • lprent 7.1

      Actually I agree with virtually everything that you say. I’m unconcerned about smart-meters arriving. They make economic sense at a commercial level. The only thing that needs to be put into place are regulations against power companies using them as a way of locking in residences. Interoperability requirements would be sufficient.

      The network is largely a protocol issue. If a generic protocol is defined or used then it will probably wind up like the internet with nodal endpoints and can be steadily upgraded point by point. If someone tries to build a waterfall command network then it won’t work. It is a standards issue again.

      Both probably require simple regulation to make effective. ie setting the process for making the protocols and making sure that people can’t keep pushing new ones in arbitrarily. If the industry does it – fine. But I wouldn’t hold my breath. They have no reason to do it. In NZ it has to be government. In both cases each power company has a strong incentive to build isolated networks for customer retention.

      The point is – do you see anything coming from Brownlee? Is it ever likely to? Would he even understand the issues and how to initiate the process?

  8. insider 8

    Lyn

    THere are guidelines in place making the meters open standard which the industry is working to. They all favour them and actually want the standards locked in. THe Elec COmmission is working on whether to formalise them as regulation. Of course Brownlee is getting rid of that too…

    I have no faith in Brownlee. He is captured by monopolistic players and SOE lobbyists. He’s a big picture guy who ignores invconvenient facts. When the EC is gone who will do the thinking for him and at what cost?

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