Blackout and deregulation
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Here in continental Europe are we following the same path than the USK, the dismantlement of the public services and the run to a wild deregulation. I would like to know the opinions of my fellow CPians: do you believe deregulation is positive or negative? Particularly, do you think the Canadian-US blackout was a consequence of the deregulation?
I have always observed that to succeed in the world one should appear like a fool but be wise - Montesquieu
Deregulation can still afford a set of standards (either governmentally mandated or privately established). The really bad thing about a regulated government monopoly of the system is that the consumer has very little control. Hence they always get screwed.
"I can picture in my mind a world without war, a world without hate. And I can picture us attacking that world, because they'd never expect it." - Jack Handey
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Since the privitisation of the UK power industries, we, as consumers, have enjoyed the lower prices and improved services that good old-fashioned competition brings about, and I couldn't imagine what state this country would be in if Thatcher hadn't of initiated this process. However, privitisation/deregulation is a double-edged sword - on the one hand you have more consumer choice but on the other you have attempts to cut costs wherever possible (to stay competitive) which can leave you with poor maintenance (and hence a potentially antiquated infrastructure) as well as worrying worsening of safety standards. At the weekend I read a "leaked" report that said if we have a severe winter in the UK this year, there is a 7 week period (Jan/Feb) where power tranmission to the whole country cannot be guaranteed! This is a a consequence of prices being slashed to the bone, but it looks like it will take a few blackouts before these companies get their acts together. Hence I foresee price increases over the next few years... However, on the whole, privitisation/deregulation has been a roaring success in the UK - OK, people slag off British Telecom but, man, they are light-years ahead of where they were pre-privitisation. Ditto British Airways (recent industrial action aside). Where there is scope for competition, then this capitalism thing actually bloody works! However, where you cannot really compete - and I'm thinking the railways here - it all falls apart and end up costing more public money than it did when it was government run. At it's peak, British Rail cost ~2 billion a year to run, and now it costs 6 billion - with even less routes, much higher prices, worse safety record, abysmal timetables, etc. IMHO it was a woeful decision to privatise the UK rail network - there is only one set of railway tracks - how the hell is competition supposed to work when the companies share the bloody network!!! It was a total balls up - the last gasp by the then incumbent Tory governemnt to raise a few quick bucks to then wave in front of the electorate in the form of tax cuts. The fact that New Labour have had 6 years to fix it and have actually done, as usual, f*ck all is even more unforgiveable. The National Health Service will be next - it might be 10 years away - but privitisation is inevitable. In fact, the WTO may one day force this upon developed countries - making state-controlled services such as healthcare a violation of trade agreements because, according to the WTO, they are inherently unfair in a fre
One hell of a rant! Spot on as well. The railways are one area where deregulation hasn't worked at all.
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KaЯl wrote: Canadian-US blackout was a consequence of the deregulation? According to a friend, who knows about these things, it looks like it is down to the configuration, in the UK we have two control centres that mimic each other, one is live the other a reserve, they swap each week. The HV power lines in the UK are ring main, the US is a star type topography. In a ring if it is broken you supply from each end, in a star you don't. Plus we have the capacity to allow for an large outage, and we can draw power from Europe as well, and soon from Norway. It was designed before privatisation, which is maybe why it works?
If I have seen further it is by standing on the shoulders of Giants. - Isaac Newton 1676
I read that the European cable is rather low capacity and therefore not likely to help much in a serious shortage. Or is the Norway link adding to that?
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I read that the European cable is rather low capacity and therefore not likely to help much in a serious shortage. Or is the Norway link adding to that?
AFAIK it is 2,000MW from France and 1,320MW propsed from Norway and a 500MW from Northern Ireland peak demand is c. 51,523MW. Means sod all to me though and I could be VERY wrong!
If I have seen further it is by standing on the shoulders of Giants. - Isaac Newton 1676
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Deregulation can still afford a set of standards (either governmentally mandated or privately established). The really bad thing about a regulated government monopoly of the system is that the consumer has very little control. Hence they always get screwed.
"I can picture in my mind a world without war, a world without hate. And I can picture us attacking that world, because they'd never expect it." - Jack Handey
-
Since the privitisation of the UK power industries, we, as consumers, have enjoyed the lower prices and improved services that good old-fashioned competition brings about, and I couldn't imagine what state this country would be in if Thatcher hadn't of initiated this process. However, privitisation/deregulation is a double-edged sword - on the one hand you have more consumer choice but on the other you have attempts to cut costs wherever possible (to stay competitive) which can leave you with poor maintenance (and hence a potentially antiquated infrastructure) as well as worrying worsening of safety standards. At the weekend I read a "leaked" report that said if we have a severe winter in the UK this year, there is a 7 week period (Jan/Feb) where power tranmission to the whole country cannot be guaranteed! This is a a consequence of prices being slashed to the bone, but it looks like it will take a few blackouts before these companies get their acts together. Hence I foresee price increases over the next few years... However, on the whole, privitisation/deregulation has been a roaring success in the UK - OK, people slag off British Telecom but, man, they are light-years ahead of where they were pre-privitisation. Ditto British Airways (recent industrial action aside). Where there is scope for competition, then this capitalism thing actually bloody works! However, where you cannot really compete - and I'm thinking the railways here - it all falls apart and end up costing more public money than it did when it was government run. At it's peak, British Rail cost ~2 billion a year to run, and now it costs 6 billion - with even less routes, much higher prices, worse safety record, abysmal timetables, etc. IMHO it was a woeful decision to privatise the UK rail network - there is only one set of railway tracks - how the hell is competition supposed to work when the companies share the bloody network!!! It was a total balls up - the last gasp by the then incumbent Tory governemnt to raise a few quick bucks to then wave in front of the electorate in the form of tax cuts. The fact that New Labour have had 6 years to fix it and have actually done, as usual, f*ck all is even more unforgiveable. The National Health Service will be next - it might be 10 years away - but privitisation is inevitable. In fact, the WTO may one day force this upon developed countries - making state-controlled services such as healthcare a violation of trade agreements because, according to the WTO, they are inherently unfair in a fre
Thanks for your long answer. So, if I understand well, deregulation is a good thing except in the sectors needing very costly investments. About WTO, you're right, it's a threat to democracy. All behind José Bové! :-D
I have always observed that to succeed in the world one should appear like a fool but be wise - Montesquieu
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Here in continental Europe are we following the same path than the USK, the dismantlement of the public services and the run to a wild deregulation. I would like to know the opinions of my fellow CPians: do you believe deregulation is positive or negative? Particularly, do you think the Canadian-US blackout was a consequence of the deregulation?
I have always observed that to succeed in the world one should appear like a fool but be wise - Montesquieu
deregulation is positive up to a certain point, some of the current proceedings are negative but necessary. Problem: government institutes have no effective means of regulation, weeding out the "unfit", keeping things running smoothly on their own, or at justifyable cost. I perceive the blackout as a combinaiton of years of mismanagement, and the deregulation.
"Der Geist des Kriegers ist erwacht / Ich hab die Macht" StS
sighist | Agile Programming | doxygen -
deregulation is positive up to a certain point, some of the current proceedings are negative but necessary. Problem: government institutes have no effective means of regulation, weeding out the "unfit", keeping things running smoothly on their own, or at justifyable cost. I perceive the blackout as a combinaiton of years of mismanagement, and the deregulation.
"Der Geist des Kriegers ist erwacht / Ich hab die Macht" StS
sighist | Agile Programming | doxygenPretty much everyone agrees that the transmission system is to blame for the blackout. Deregulation cannot be blamed then, since transmission is 100% regulated everywhere. Deregulation applies only to distribution (retail access, i.e. independent power marketers) and wholesale generation (merchant power plants that sell to utilities). Utilities own the transmission system, but it is wholly regulated by the government. Transmission will likely never be deregulated, as it technologically doesn't make sense (because of Kirchoff's Law).
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Pretty much everyone agrees that the transmission system is to blame for the blackout. Deregulation cannot be blamed then, since transmission is 100% regulated everywhere. Deregulation applies only to distribution (retail access, i.e. independent power marketers) and wholesale generation (merchant power plants that sell to utilities). Utilities own the transmission system, but it is wholly regulated by the government. Transmission will likely never be deregulated, as it technologically doesn't make sense (because of Kirchoff's Law).
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Oh - so the power lines, and the emergency switchoffs etc. are still in "public hands"?
"Der Geist des Kriegers ist erwacht / Ich hab die Macht" StS
sighist | Agile Programming | doxygenThey are still in "public hands" in the same sense that generation was before any deregulation began. The actual assets are privately owned by utilities, while the price they charge for transmitting power and how much transmission capacity they are required to have is determined in regulatory proceedings. Deregulation in the power industry exists in that there are regional system operators (ISOs) that are government run which determine the wholesale market price (your $/MWh prices) based on supply from utilities and independent power producers (IPPs). Many places also have open retail access, though mostly only for commercial and industrial (C&I) customers, not residential customers. In retail access independent companies can compete against the regulated retail rates (the cts/kWh ones you see on your bill) of utilities, who can also have their own subsidiaries compete against the regulated rate as well. There are really three businesses historically related to electricity: generation, transmission, and distribution (retail sales). Generation has been deregulated first with distribution following. The problem with transmission is that you can't tell the power where to go. For instance, pretend there are two different lines between the same two places owned by two different companies. A deregulated market implies that each owner is free to set their own price to compete in the market. However, because of Kirchoff's law, there is no way to ensure that in real-time the power will use the line that charges the lower price. You can blame it on the electrons for not being bargain hunters :). (If you're wondering why I know this stuff, I work in the industry)
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They are still in "public hands" in the same sense that generation was before any deregulation began. The actual assets are privately owned by utilities, while the price they charge for transmitting power and how much transmission capacity they are required to have is determined in regulatory proceedings. Deregulation in the power industry exists in that there are regional system operators (ISOs) that are government run which determine the wholesale market price (your $/MWh prices) based on supply from utilities and independent power producers (IPPs). Many places also have open retail access, though mostly only for commercial and industrial (C&I) customers, not residential customers. In retail access independent companies can compete against the regulated retail rates (the cts/kWh ones you see on your bill) of utilities, who can also have their own subsidiaries compete against the regulated rate as well. There are really three businesses historically related to electricity: generation, transmission, and distribution (retail sales). Generation has been deregulated first with distribution following. The problem with transmission is that you can't tell the power where to go. For instance, pretend there are two different lines between the same two places owned by two different companies. A deregulated market implies that each owner is free to set their own price to compete in the market. However, because of Kirchoff's law, there is no way to ensure that in real-time the power will use the line that charges the lower price. You can blame it on the electrons for not being bargain hunters :). (If you're wondering why I know this stuff, I work in the industry)