Archive for May 12th, 2009

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This anti-Neuroeconomics screed on MarketWatch is so bad you have to stop and look

May 12, 2009

Michael Giberson

An example:

The biggest reason the human brain will always remain irrational is because Wall Street wants it that way. Wall Street can control irrational Americans better using its high-tech neuroeconomic data, strategies and algorithms.

I’d rate the whole thing as somewhere between car-crash bad and train-wreck bad. There might be a good point in it somewhere – in the way that, in a car crash, maybe the driver’s ACDC “Back in Black” CD remains unscratched – but an unscratched CD does not undo the fundamental badness of a car crash.

If you were driving by this MarketWatch opinion piece on side of the road, you’d definitely want to slow down and take a look.

(HT to Knowing and Making)

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A message to you Rudy

May 12, 2009

Michael Giberson

Reading and writing about Jeremy Rifkind’s distributed energy proposal has been made much easier for me this morning because I’ve had Pandora running music in the background.

More specifically, Pandora has been playing my “A message to you Rudy” station, and by clicking here you can listen, too. It has been a beautiful mix of The Specials, The Toasters, Gregory Isaacs, The Ethiopians, The Melodians, The Mighty Mighty Bosstones, Burning Spear and others.

One neat feature in Pandora, currently not available in traditional, over-the-air radio, is you can click on the artists name (or song name, or album name) and learn more.  For example, I did not know that Rob Hingley started up The Toasters by gathering “several employees at the comic-book store he managed to form the band’s first incarnation.”

Here are two YouTube videos of the song that inspired the station – The Specials, “A message to you Rudy” – both interesting documents of the era and scene yeilding two tone ska some thirty years ago.

BTW, during the four days I spent at JazzFest I received more comments on my The Toasters t-shirt (4), than on my Bob Wills Day shirt (1), or my Los Lobos shirt (0), or my The Slackers shirt (0).

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Jeremy Rifkind, thinking big about distributed energy resources

May 12, 2009

Michael Giberson

I’m not generally a fan of Jeremy Rifkind’s work. But, as a commenter is quoted as saying at the end of this BBC News report on Rifkind’s latest ideas for energy policy, “The world has room for visionaries.”

At a Prague conference, Rifkind outlined a grand scheme for solving economic and energy problems by rapidly moving Europe to distributed renewable energy resources integrated with smart grid systems. If you strip out the seemingly-obligatory-in-public-pronouncements-these-days promise of millions of “green jobs,” it is a vision of what a smart grid system can do for distributed energy.  Sure, too ambitious by half, but that is part of what makes it a vision and not a program for immediate action.

Although, I’ll have to say, there is an odd bit of centralization in a distributed energy proposal in which at “any one time the system will know what every washing machine is doing in Europe” and in the case of “peak demand, [with] not enough supply, software can say to two million washing machines ‘forget the extra rinse’.” (Though Rifkind notes his system is entirely voluntary and participants would be paid for their contributions.)

In my visionary moments, I imagine a future, more distributed, smart grid system accomplishing much the same sort of interaction and response, but no central system needs to know what every washing machine is doing in Europe in order to achieve my vision.  Instead, my local smart grid agent is monitoring local prices (current prices, future prices over the next several hours) and then scheduling home appliance energy use to maximize value against some model of my demand for service from my home appliances (dishes washed, hot water available for bathing, home temperature within a comfortable range, and so forth).

If area demand for electricity is reaching a peak in which sufficient supply is not available, no doubt spot prices will be getting high and my smart grid agent can cycle off my hot water heater, or my air conditioners, or skip the rinse cycle on dishwasher, whichever option (or all three!) that makes sense given my demands for energy services and the current prices available. Maybe I have a rooftop solar array, and at current prices it makes sense for the house to dramatically cut power use and become a net supplier of power to the distribution system.

Sometimes it will be more important to me to have the hot water available and sometimes it will be more important to keep the air conditioners going full blast, but if I’m not home and not going to be home for a few hours, why not make a few bucks off that rooftop solar array? I’d rather the system the manages those tradeoffs be local, not centralized in a system also responsible for millions of other distributed energy resources.

Related, BBC News reports that the UK has unveiled a plan for every home to have a smart meter by 2020.

(HT to Big Gav at the Energy Collective for the link to the story on Rifkind.)

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Illinois Smart Grid Initiative final report

May 12, 2009

Lynne Kiesling

Last year I worked on the project team for the Illinois Smart Grid Initiative, in which we brought together a wide range of stakeholders to discuss the opportunities, benefits, and costs of different models of investing in smart grid infrastructure and technologies. We also discussed the important regulatory institutional changes that would be required to unleash all of these potential benefits and creating “good value for money” for consumers and investors.

The ISGI final report is now available. From the web site:

The ISGI Report outlines how a smart grid can fundamentally improve reliability and efficiency, integrate renewable energy on the local level, and empower consumers to take charge of and reduce their electricity bills–while saving energy and reducing carbon emissions.

The ISGI Report identifies several steps that can be taken right now to improve the electricity system for the benefit of all Illinois citizens. It encourages increasing consumer choice by pairing real-time electricity rates with smart technology, and urges regulatory rule changes that encourage public and private investment in energy efficient smart grids. Finally, investing in the smart grid can open the door to new ‘green power’, high-tech business opportunities in communities throughout the state.

Currently, Illinois is the national leader in offering residential customers real-time pricing options, and is among the leading states in mandating increased renewables and energy efficiency. Using the economic stimulus bill as one catalyst, the ISGI Report maps out how Illinois can transform the electric grid into a smart grid and set the standard for the nation in stimulating the economy and protecting the environment.

Here’s a direct link to the pdf of the report. While the discussion is specific to Illinois, we are leading the smart grid policy debates at the state level, along with a few other states, so I think in the spirit of the “laboratory of the states”, this report has a lot of valuable information for anyone interested in smart grid policy.

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Hartford Courant editorializes against zone pricing ban in Connecticut

May 12, 2009

Michael Giberson

From the Hartford Courant (May 11, 2009):

A bill in the General Assembly that would force gasoline wholesalers to charge the same price to retail dealers across Connecticut would likely raise the price of fuel for most motorists and make the market less responsive to competition.

Legislation to ban so-called zone pricing has been tried a number of times. The ban’s drawbacks are far outweighed by the advantages of allowing the market to continue working as it already does.

“Zone pricing” is the practice of gasoline wholesalers setting prices for sale to gasoline retailers by area, based upon a projected ability of the area to support higher or lower prices. While specific practices vary by wholesaler, typically incomes in the area and the level of competition between retailers would be taken into account as wholesales select the price it wishes to charge.  It is asserted that zone pricing harms retail station competitiveness and leads to higher retail prices.

Over the past several years zone pricing bans have been often debated in Connecticut and elsewhere. Numerous points have been made by both proponents and opponents of zone pricing bans. Until recently the evidence for and against zone pricing has been primarily theoretical, or experimental, or based on inferences from similar practices in other industry.

But last November neighboring New York implemented a law (partially) banning zone pricing.  So my advice to the people of Connecticut is that they continue without a zone pricing ban a little longer, and commission a few economic studies of the effects of New York’s zone pricing ban instead. Why not find out how this idea actually plays out in the real world?

Better to spend thousands of dollars on economic studies than make a million dollar mistake.

Previous zone pricing posts on Knowledge Problem:

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