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

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

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1. gingercrush 1

   11 November 2009 at 3:25 pm

   [deleted]

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   [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

     11 November 2009 at 4:13 pm

     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

   11 November 2009 at 4:14 pm

   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

     11 November 2009 at 5:06 pm

     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

   11 November 2009 at 4:24 pm

   Ha, the Economist with some good points. It really is regulation that makes things better and not some mystical invisible hand.
4. Jono 4

   11 November 2009 at 4:29 pm

   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

   11 November 2009 at 5:08 pm

   Don’t forget, he hates efficiency too!
6. factchecker 6

   11 November 2009 at 5:44 pm

   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
   • Draco T Bastard 6.1

     11 November 2009 at 7:02 pm

     Yes, but he’s not actually doing anything to bring that about is he?
   • Armchair Critic 6.2

     11 November 2009 at 8:12 pm

     What is so smart about smart meters?
7. insider 7

   12 November 2009 at 1:53 pm

   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

     12 November 2009 at 7:05 pm

     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?
     • prism 7.1.1

       12 November 2009 at 10:09 pm

       Doh!
8. insider 8

   12 November 2009 at 9:21 pm

   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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1. Anyane Eric: posted on 11 November 2009 at 8:24 am

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