MorganEnergy

The session on electricity market modeling was interesting but not very useful. Supply Function Equilibrium models are all very well, but most clients can’t understand you if you talk only in equations, and whenever I see presentations about these things they always seem to focus on approximations necessary to get the model to solve rather than on whether the model accurately reflects reality.

I’m afraid I was rather mean to the young man who tried to excuse the potential impacts of his grand plans for biofuels by claiming that he only used non-food biomass. Unless the stuff is waste, or grows only in areas unsuitable for food crops, it all competes for the same agricultural land.

I caught a plenary session on demand management and renewables that was quite interesting. Brandi Colander of NRDC gave a lightning fast presentation on demand reduction starting from the fact that DR is apparently much cheaper than generation, but no one puts any money into it. There are many reasons for this, but one that I hadn’t thought of before is rental property. If a property is rented and the tenant pays the energy bills then the landlord has no incentive to improve the property, but if the landlord pays the energy bills then the tenant has no incentive to manage usage. Regulatory issues play a part too, and Brandi was very hot on the need to decouple utility profits from the process of selling more energy.

The session on restructured markets majored on issues regarding whether consumers are better off under deregulation. Jay Zarnikau revealed that in Texas prices had risen much more in the areas of retail competition than in areas where prices are still regulated, but the market is young and that could simply be a matter of private companies passing on costs more quickly than regulators. John Kelly of APPA claimed that prices in the PJM have risen much more sharply than prices in neighboring regulated states, but it is one thing to say that this has happened and another to prove that it is the result of anti-competitive behavior.

The Japanese are apparently worried about their nuclear industry because no one wants to work in it. This is a story that the UK can probably relate to.

The winner of the student paper contest was Derek M Lemoine from Berkeley for a paper using real options to value plug-in hybrid vehicles. Go Bears! (And yes, one of the other finalists was from Stanford.)

The after dinner speaker was Brent W. Dorsey, the Director of Corporate Environmental programs at Entergy. It is perhaps unsurprising that the company whose systems have been wrecked by hurricanes Rita, Katrina, Gustav and Ike believes in global warming, but it was still a pleasure to hear a senior utility executive not only say so, but quote The Onion to make his point. Of course Entergy’s money is not in the coal business, but Mr. Dorsey recognized the plight of his colleagues in the industry and made an impassioned plea for the US to become a world leader in technologies such as clean coal and carbon sequestration, which it could then export to China and India.

We have another full day of program tomorrow.

I was up bright and early this morning for a breakfast meeting looking at plans for next year’s IAEE conference in San Francisco, which looks to be coming along nicely. More on that later.

The conference information sheet I got when I signed up said that the dress code was “business casual” and that the wearing of suits was strongly discouraged. This instruction has been almost universally ignored, which may say something about the attendees.

The opening address was by Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, who stepped in at the last minute when his colleague from Dallas, Richard Fisher, fell ill. Most of his speech focused on doom and gloom in the economy, and hope for recovery, which was pretty much as expected. I happened to end up in an elevator with him afterward and we chatted briefly about risk and human nature. He noted that sometimes tail risks do play out, to which I could only add that perhaps next time I give a lecture on VaR and talk about the need for stress testing maybe some of the audience will listen.

Here I am in New Orleans at the 2008 USAEE Conference. The conference program is available here. I shall report back as and when I can. if there is anything that particularly interests you that you’d like me to report on, please leave a comment.

The Utility Integration Conference is now less than a month away, so it is time to remind you about this offer of a 10% discount on the registration fee.

With much of our Northern Hemisphere readership doubtless on vacation (and the weather in England being predicted to be wet for the next few days) it is perhaps time to think of extending the summer by a trip to the beautiful city of Perth, Australia. The IAEE’s Asian Conference will take place there on November 5-7. Here is a brochure and call for papers.

With this year’s IAEE Annual Conference in Istanbul over, it is time to turn our attention to next year, when the event will take place in San Francisco. Dr. Sioshansi and I will be delighted to see as many of you as possible visit our beautiful “city by the bay”. In the meantime, here are a PDF brochure and a web site for you to peruse.

The 5th Annual Utility Integration Conference takes place in Phoenix on September 16-17. We are pleased to announce that you can get a 10% discount on the registration fee if you mention EEnergy Informer. Useful web links are as follows:

• Registration
• Agenda
• PDF brochure

(more…)