Hot Air and the Unfair

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We nearly choked, Malcolm Turnbull – Liberal Front bencher – Minister for Communications, said the loss of Holden’s local manufacturing operations is a watershed event for an Australian economy that must 
commit itself to innovative, high-tech industries. We then lamented, this and previous governments have demonstrated that they have contempt for promoting small innovative firms that demonstrate they can provide globally competitive technology best in its class and fully capable of entering multi billion dollar markets. Proof,

–       Look the number of innovators that go off shore for success.

–       Then look at the procrastination going on about reviews and approvals processes.

–       Then look at the discussion going on about cutting red and green tape etc.

Then CO2Land org thought, maybe we could write a book instead of a post about this and call it – Hot air and the unfair – something like that! Or is it that Mal is planning a new power base in getting a fair deal?

On with the story: Why Malcolm Turnbull saying? Recently the Australian Broadcasting Commission (ABC) wrote The inconvenient truth for the Coalition’s NBN By David Braue Updated Fri 13 Dec 2013, 1:23pm AEDT that the NBN Co of the coalitions model was grossly underestimated in what will cost. Maybe there is cabinet reshuffle of portfolios coming already? It has already been reported that Ian McFarlane is unhappy with Warren Truss’s intervention on Holden. That considerable unrest is around with Government performance to date, and the endless control measures such as Joe Hockey’s handling of money movements. Comments like need to review, measures against etc. All this meaning the excuse to do nothing.

Maybe Liberal frontbencher Malcolm Turnbull saying to Sky News on Sunday 15 Dec 2013, Australia has to realise its future is not in “large scale, very low cost manufacturing” where it can’t compete.

“Emotionally this is a big watershed event,” Mr Turnbull told.

“This should be seen as a wake-up call, a reminder that we must recommit ourselves to an economy that is based on innovation and technology, and that is globally competitive.”

What Malcolm said is precisely our point. Thank you.

Does Australia have “globally competitive technology best in its class and fully capable of entering multi billion dollar markets”? Well if you consider China as a desirable trading party, then as you should, take notice of this invitation for a ‘little aussie battler’: The 4th Annual World Congress of Bioenergy

Theme: Roadmap toward 2020  Time: September 21~23, 2014     Venue: Qingdao, China.   Website: http://www.bitcongress.com/WCBE2014/default.asp

“Dear Peter Davies,

On behalf of the Executive Committee Office, it’s our great honor to announce the most influential bioenergy event in Asia – The 4th Annual World Congress of Bioenergy (WCBE-2014) will hold in Qingdao, China during September 21~23, 2014. In view of the fact that your enthusiasm for biological applications and outstanding achievements in the field of bioenergy. The organization committee cordially invites you to be a speaker in our program and give a presentation at Pipeline 315: Integrated Biochemical Conversion Processing and Bioreactors for Scale-up. 

Main Characters of Annual World Congress of Bioenergy

Comprehensive agendas: With the bioenergy steady economic growth and biomass technology is improving by the day. This congress will discuss on biotechnology development and bioenergy sustainable development. The agendas cover Bioenergy Economy and Sustainability, Applications, Commercialization, Biofineries of Bioenergy, Biomass Conversion Technologies, Feedstock Landscape. This congress with the “Roadmap toward 2020 “as the theme to focus on bioenergy and look forward to the new era.”

Well what is there wrong about our posturing? What is wrong with having a front bencher of the cabinet having the courage to make statements that make sense, that is very close to what the ‘real’ world takes notice of! CO2Land org is saying it goes to say to make government relevant again it must have Headship – the current Leadership talk is exactly that – talk.

Then Mungo MacCallum said 16 Dec 2013, “And if Tony Abbott would rather spend the money on building lots of roads around our choking cities and restoring tax rorts for those who get part of their salary in cars to drive on them, so be it. Perhaps we can pretend that the cars are Holdens. That would make us feel better, wouldn’t it?”

Mungo MacCallum is a political journalist and commentator. View his full profile here.

Over to you Mal – show yourself, please.

But, have we lost something here!

The elasticity of renewable demand and controversity

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Newly-elected federal Liberal MP for Hume, Angus Taylor, is a committed anti-wind campaigner and is reported to be against the NSW government decision to allow the “controversial” Collector Wind Farm decision. In the reported post it was said he hinted policy and that the Renewable Energy Target (RET) review would likely prove the undoing of the wind farm industry in Australia –

“Projects like this seem set to continue unabated until a national review – which the new federal government has committed to in 2014 – can reveal the true economics behind the industry,” he said. “The RET review will look into the massive subsidies for wind farms, which are forcing up electricity prices and propping up an economically unviable industry.”

Source:  Hamish Boland-Rudder, Reporter at The Canberra Times | December 5, 2013 | www.canberratimes.com.au .

Unfortunately, in this country, we have again simply decided that ‘a review’ will do, to ignore that real innovators will suffer. The statement may be best viewed if you dissect the last quote above. In particular: subsidies – the go against the traditional models for supply; forcing up – obviously painful to the traditional models; propping up – this is the corker, as it suggests unless it is the traditional supply model the demand balance cannot be effective. If you think even harder you can also come of the view energy efficiency will be discouraged as decreased demand for energy will threaten the ‘viable’ industry. The most interesting part of all this politicking is that it ignores that what is driving all this angst is that technology is quickly overtaking the industry. Technology that is outmoding conventional supply systems. Like all technology advances it takes courage to move forward, to encourage the uptake and reward the innovators. But, alias my dear for that we need a review and force unreasonable cost to those with the shallow pockets.

However, is the secret deal as simple as reducing subsidies and reducing prices? Unfortunately economics is not that simple it also involves elasticity.

The business of BIOCHAR

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The problem can be called “Marketing Myopia”, and the claim was made in relation to the uptake of BioChar. Quickly scanning to understand what was meant by that term the Business Dictionary was most helpful. Marketing Myopia – A short-sighted and inward looking approach to marketing that focuses on the needs of the company instead of defining the company and its products in terms of the customers‘ needs and wants. It results in the failure to see and adjust to the rapid changes in their markets.

The concept of marketing myopia was discussed in an article (titled “Marketing Myopia,” in July-August 1960 issue of the Harvard Business Review) by Harvard Business School emeritus professor of marketing, Theodore C. Levitt (1925-2006), who suggests that companies get trapped in this situation because they omit to ask the vital question, “What business are we in?” Read more: http://www.businessdictionary.com/definition/marketing-myopia.html#ixzz2lJq5Y3wT

So: What is the business of BioChar? It can elicit a number of different answers that can supply at least 11 different industries. What might change is the name that suits the industry. For instance it may be called Bio-Carbon for industrial applications, and can be called carbon black, or graphite.

Applications in industry can be:  Insulation, Air decontamination, Decontamination of earth foundations, Humidity regulation, Protection against electromagnetic radiation (“electrosmog”), Exhaust filters, Controlling emissions, Room air filters.

  • It can be part of Industrial materials: carbon fibres, plastics.
  • Its use in Electronics: Semiconductors, batteries.
  • Use in Metallurgy: Metal reduction.
  • In Cosmetics: Soaps, skin-cream, therapeutic bath additives.
  • In Paints and colouring: Food colorants, industrial paints.

In Energy production:

  • Pellets, substitute for lignite.

In Medicines:

  • Detoxification, carrier for active pharmaceutical ingredients.

In apparel and footware:

  • Fabric additive for functional underwear, Thermal insulation for functional clothing, Deodorant for shoe soles.

In sleepware:

  • Filling for mattresses, filling for pillows

For protection:

  • Shield against electromagnetic radiation.

Then for applications of decontamination and waste handling:

  • Soil additive for soil remediation (for use in particular on former mine-works, military bases, radio transmitters sites and landfill sites)
  • Soil substrates (highly adsorbing, plantable soil substrates for use in cleaning waste water; in particular urban waste water contaminated by heavy metals)
  • A barrier preventing pesticides getting into surface water (Sides of field and ponds can be equipped with 30-50 cm deep barriers made of biochar for filtering out pesticides)

Treating pond and lake water (Biochar is good for adsorbing pesticides and fertilisers, as well as for improving water aeration)

  • Use as or in a Biomass additive, Biogas slurry treatment, Active carbon filter, Pre-rinsing additive, Soil substrate for organic plant beds, Composting toilets.

Then for applications of the treatment of drinking water:

  • Use in: Micro-filters, Macro-filters in developing countries.

Then for numerous Agricultural purposes it can be used or invaluable for:

  • Silage agent, Feed additive/supplement, Litter additive, Slurry treatment, Manure composting, Water treatment in fish farming, Carbon fertiliser, Compost, Substitute for peat in potting soil, Plant protection, Compensatory fertiliser for trace elements.

But you will say some of these are activated carbon. What is the difference? According to Achim Gerlach and published in ithaka (ithaka is also the reference to the 55 uses of biochar above): “Activated carbon = biochar – Generally speaking, all activated carbons are originally biochars. Active carbons are however “activated” using acids or hydroxides or 900°C water steam. In doing so, their specific surface area increases from app. 300 m2/g to over 1000 m2/g. Activated carbon is 5 – 10 times more expensive than simple biochar, so it is possible to use 2-3 times the amount of biochar to achieve the same result – whether with regard to digestion in cattle or in a sewage treatment plant. As activated carbon is for the most part produced without adequate controls in South-East Asia or South America, the eco-balance often leaves a lot to be desired. Biochar by contrast is produced from controlled, locally grown raw materials using controlled production methods. There is no real difficulty involved in producing activated carbon from biochar.”

This still does not answer the ‘what business are we in’ question. It follows that you define your product by way of what it does. But in business it is a definition of purpose for whom the business does serve is how you tend to answer ‘what business are we in’. Now consider the question of whether your product is to be considered as sourced from a co-product, or a by-product. Looking at this logically, it could be seen that the former broadens the scope of available uses that go beyond considering it a variable price component. A by-product might not be a business, and is more likely to be treated in a similar way to waste and less likely to be refined.

If you understand business you will know that the value model assumes you will seek what the market will bear in terms of price and volumes. A by-product only seeks to dispose of the ‘waste’ at a level that mitigates the cost of production. The issue then becomes how do I guarantee a quality product if it is not priced correctly.

Therefore a successful business proposition will have the price set in terms of purpose, price of bioenergy plants and the need for the plants to be tweaked so as to be priced accordingly and as a minimum must have a value sufficiently above its inherent energy value for the use of, and, or the market intended. Why, your business customer base needs to be accommodated to broaden the available uses, and that will be more than agricultural soil amendment.

So what is the business your in? Conventional wisdom suggests you need to be “Cool”, have a willingness to collaborate with end users, understand the proposals of purchasing chars from many sources, spend as much time & effort in researching/ formulating/inoculating to get the biology balance right, and set yourself up as best practice biochar ‘finisher’.

What is a finisher? John Christy asked the same question on LinkedIn, and as best as CO2Land org can find is: A biochar ‘finisher’ is someone who augments it, packages, and distributes. All they want is a price and a place to sell to, and focus on energy production. Is there anyone doing this or willing to consider at this point. Christy continues saying “Offtake agreements are needed now in order to get the financing for these projects. Ideally we want a 20 year agreement to take a minimum amount of biochar, meeting certain criteria….or a memo of understanding would help”. Maybe, that is the tact your business can take too, to satisfy the customers need!

This post does not attempt to address the production or the farm scale platforms for biochar use other than mention some of the factors of the business that will affect how you will function as a business. Country to country the price and composition of biochar will differ. Like all product, the material inputs is important. Here in Australia we have a forestry industry that can provide feedstock from floor waste and we can calculate the manufacturing cost of biochar from that source, other countries might not have such a luxury and have other sources of feedstock materials. The point is well made by John “There is much to be done to define biochar quality, learn how to ship large quantities without significant losses”.

As a footnote references:

 

http://www.ithaka-journal.net/55-anwendungen-von-pflanzenkohle?lang=en

 

To Promote – Expertise – Resilience

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Sitting in Wodonga VIC, with friends of course, the discussion was about enabling to promote resource opportunities. Then joining the table was an impressive thinker, in fact a scientist that could add she was part of a group focused toward the development of sustainable, resilient regional communities. Part of the aim of that group is to build on the region’s competitive attributes – Now sitting with us was an inspiration, someone to be seen as a critical enabling agent.

CO2Land org is familiar with computer terms and if you carry over that same meaning you could describe that agent as: Part of an enabling proxy of the objective that is to allow this agent on other management packs.

Therefore a group like the Regional Centre of Expertise – Murray-Darling, RCE-MD) through this enabling proxy could import their management pack, and that management pack would discover like minded entities and assign them to other organizations.

The down side of this thinking is that some wanting to be influencers have the potential to dupe you into running a framework with a less safe agenda. With that agenda they could introduce a subtle internal social engineering attack that is counter to your stated intention. Such distractions are then not easy to skip over, and take up much of your valuable time to get around this problem and getting the priority message delivered.

In the realization that now, at this time, the political environment encourages such counter tactics: WINTELBOFF (www.wintelboff.com), Carbon Training International (www.co2ti.com), Y ME Solutions (www.ymesolutions.com) are likely to form an agreement to promote and project environmental health. In this context and in recognition the future will not function adequately or at all if we fail to counter the increasingly sophisticated ways less safe solutions are promoted, they propose they will share the need to inform, educate sustainable systems and engage the community – if not a fail could cost the earth! We can only wait to see if this management pact creates a roll-up of the uptake of being much more responsible and enable trust with absolute certainty.

What is the Regional Centre of Expertise? For a start it is acknowledged by the United Nations University. The complete name is the Regional Centre of Expertise on Education for Sustainable Development.  This discussion started around the consortium of the Murray- Darling region (www.rcemurraydarling.com.au), and it is noteworthy that the wording of who they are is ‘a creative re-combination’ in enabling activities and initiatives through collaborative partnerships, networks and resource-sharing as well as the obvious – opportunities.

CO2Land org as a general rule does not promote membership to company entities. However, there is always room for an exception where it is formed solely for being a centre of expertise with a purpose to add meaning to sustainable outcomes and being resilient.  Looking at the members the lead organisations are: Charles Sturt University, Wodonga Institute of TAFE, La Trobe University. Others are with research, schools, business, community, and government in each of the tiers. The suggestion is if you need a contact try Dr Alison Mitchell amitchell@csu.edu.au .

And, there is more – other centres – it is spreading organically.

 

 

Australia – so little support for idea leaders

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It started with one line: Without a culture that makes big, bold bets on new ideas, its difficult to see how Australia can move from being an idea cemetery to an idea launcher -Source Ben McNeil.

All this came from a story in the Australian 28 August 2013. The story called “Big Ideas Buried in Innovation Graveyard”. It touched a nerve because as is the case of so much excellent ideas we generate in Australia, there is so little support for the commercialisation of the ideas. But, wait there is more! – We do not care about the innovation.  What you say, don’t care.  It is true – think about this line: Commercialisation Australia doesn’t support the company but the Commercialisation of the technology. Where does this leave the innovator? Up the creek without a paddle – your ideas can be superb, you business case well founded: But the graveyard – the valley of death for your invention is that place you go to because you cannot find support in our country, the country an with excellence for invention and a fail for innovation efficiency. In short we force our good ideas offshore if we want success as a company. The idea leaders cannot be rewarded for helping our industry to be part of our country.

If you doubt this, then this is what Ian Chubb, Australian Chief Scientist, said in the 28 August article: “Australia ranks 107th out of 141 nations in innovation efficiency”

In a ‘real’ world example: You ask please help me protect my IP, I need help because I have a lot of interest in my product after considerable R&D. What I do not have is the confidence of my buyers to outlay the dollars to place an order. When I place an application for help to move on my trade secrets, I am then faced with a number of questions that directly relate to my IP. Then the ridiculous come to light – the question: Why don’t you fund your own IP Protection? The answer creates a circular argument along the lines of a song from Harry Bellefonte some years ago: There is a hole in my bucket and it goes on rhyme well fix it to the point where to fix it requires the bucket to carry water – but there is a hole in my bucket. Unfortunately that pretty well sums up the Australia attitude of support for our ideas.

If it were to change would the Small man with big ideas be treated better?   Actually, in another perverse twist it is a tendency of this country to promote institutions with generous awards of cash and incentives. We can only suspect that is because it is a highly visible way to make big numbers look ‘real’ big deals. The short-term photo opportunity is seen a tick in the outcome box, yet often proves a less than optimum result.

The risk of failure will still be a major problem for the small innovator, even if they have the big bold new ideas that could drive our nation into prosperity and diversity of our GDP collection points. Because your ideas could not be protected while you seek markets, you fail you cannot protect your secrets – your ideas are ‘stolen’ and you will not attract investment.

CO2Land org noted that recently the Prime Minister announced the think small concept – what did he really mean?

Regenerative Energy a better product

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Very recently, in conversation it became obvious, that apart from hard line protagonists, on both side of the political divide they agree that climate change is happening. The disagreement is whether is it anthropogenic and how exact any remedial action might be in saving the planet. In common with all is that reliance on fossil fuels will remain to dominate our need for comfort. The degrees of the need for comfort and the energy needs to supply it will be lowered or raised by how we control our demand.

But, you know it might be possible that innovators are coming up with better product – a more affordable alternative that provides the same service. More affordable, not just in terms of price but also cost of resources.

If you have followed CO2Land org you will notice there is a strong emphasis on regenerative energy and innovation. You might also notice a practical stance on comments on the campaigns for emissions trading systems (ETS). It had never been denied that ETS has a role for helping switch from coal to natural gas right now and to some extent renewables. It is also advocated that the Mandatory Renewable Energy Targets (MRET) in Australia has encouraged uptake of renewable energy. But carbon allowances themselves have not been observed as being able to produce a better product.

Regenerative energy might be a better product and while renewables have made inroads and are already on the right path in the electricity sector. If you don’t think so take a look around you and you will see wind power is quickly moving to be a mature technology, and the cost of solar having plummeted in the past few years, and China is about to flood us with even cheaper solar products. Another reason to consider regenerative as a better product choice is efficiency as waste can be stored in what you might describe as a battery waiting for peak demand periods before being used. Our comforts for heating, transport, mobility, communications and peak energy use can be provided without the need for compromise.

CO2Land org is optimistic that this transition can succeed mainly because people will view it all as an improvement in their lives. The down side is there will be business as usual type resistance to the term ‘unburnable carbon’. Meaning if we remove the increasing demand trend for finding new fossil resources – such as shale oil and gas – and instead stretch out the fossil reserves by lowering current demand, and hence allow us to leave this carbon in the ground we will be accused of hurting jobs and shareholder returns.  What would be even more interesting is how BAU types could reinforce the constant negative when we can continue to feel comfortable.

Motivation for the post comes from:

http://www.renewablesinternational.net/keeping-carbon-in-the-ground-requires-a-better-alternative/150/537/73336/

 

Keeping carbon in the ground requires a better alternative

Thoughts on the new IPCC report

We were promised a grown up government

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Being described as a Pollyanna took me back a peg or two. (Full Definition of POLLYANNA : a person characterized by irrepressible optimism and a tendency to find good in everything — Pollyanna adjective — Pol·ly·an·na …

www.merriam-webster.com/dictionary/pollyanna).

What do you mean? All that was said was I would like to be optimistic of the intention of the new government. That we should expect some transition difficulties but ultimately once the classical change management transition is complete we should have common sense prevail, as you would expect in a democracy.

If there was some unease with the choice of the basic change management strategy it may be because it was thought there was a right to govern. It could explain the expectation that the degree of resistance or indication of lack of resistance by the people, the dependency of the people to expect him to take decisive action was deemed by the Prime Minister as requiring a power-coercive change management strategy.

But something is already showing itself that the key success factors are astray. Whilst it is seen as a problem the identification of the major risk that is apparent may get down to the Culture or organization alignment.

“Tony Abbott promised us a grown up government.

But apparently what he meant was that he would be the only adult in it. His ministers are to be treated as children – worse than children, in fact, because while children should be seen but not heard, Abbott’s team cannot even be seen in public without permission from the top.

And even then they really shouldn’t open their mouths except to paraphrase Abbott’s message. Why, even his favourite choir boy, little Christopher Pyne, got it wrong this week with his talk about killing off university student unions – he was absolutely sure that was what Mr Abbott wanted him to do, but he was sent straight to the naughty corner for suggesting it prematurely. The other kiddies have apparently got the message; the airwaves have been freakishly Liberal-free ever since.

Still more importantly, he will have to pray that the public and the media react to his policies of concealment, silence and obfuscation with the same acquiescence he expects from his ministers. For the moment at least, he is determined to press ahead with the mushroom policy: keep them in the dark and feed them bullshit. ” Source ABC.net.au the Drum by:

Mungo Wentworth MacCallum is a political journalist and commentator. View his full profile here.

Co2Land org now asks: What is going on, are we to procrastinate to not be so sure – to be sure!

Our democracy – the need to educate, to influence better environmental outcomes

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Increasingly you might hear the comment – we don’t have a democracy anymore and all that we get is push marketing and the pedaling of misinformation. We are told what to think, act and what we feel in order to react ‘appropriately’. Scenario the phone rings – hello, its Adrian mate and if you don’t want to let the community down you will adopt our stance, you don’t want to let the sky fall do you?  You react and say hang on I am a good upstanding community member….you are hooked and steered into a psychological twist.

Whatever scenario you want to paint on the issue a properly functioning democracy requires an educated, well-informed and proactive community. Backing this thread up is a quote from the Executive Director at Liana Downey & Associates – Strategic Advisors to Governments and Nonprofits – contributing to the discussion about the morality of government and some leaders on action on climate change – “I think it just strengthens the impetus to keep educating, and keep moving forward, particularly for those of us with a good understanding of the science. I have had plenty conversations with reasonable, educated professionals who admitted they just weren’t sure if “all this climate change stuff” was really an issue. We have to take the time to acknowledge doubts, and respond to concerns in an informed way that doesn’t patronize people but allows for conversation and progress. Who says there isn’t scope to address the concerns of the cynics? 

This would be an easy time to fall into despair – it’s certainly tempting. But it’s also the most important time to step up, be clear about the facts, and help lead. Government are obviously important players, but not the only decision makers or leaders in our society. There is still plenty of scope to help shape thoughtful sustainable investments, shift consumer and corporate behavior, and keep doing what we know to be right to protect future generations”.

Then we have the comment by Michael O’Flynn – Sustainability and Financial Risk Consultant: “The real culprits are the politicians with their lack of accountability, aspects of the media who cherry-pick “evidence” to push their backer’s agenda, large immoral corporations and their executives who simply care about profits, rates of return and $$$bonuses and some of the mega-rich. We are basically facing a fight between the gung-ho capitalist model who call for less regulation and as happens, have the big bucks and consider all resources as simply a means to derive a profit first and foremost, versus the people. 

It wasn’t so long ago that the god-Father of the current Libs, John Howard and supposedly the Libs too, were keen on an ETS. Exhibit A for long-term culpability for any inaction.”

CO2Land org finds this potent stuff, maybe a little emotive, but puts the point across vey well – we are influenced as opposed led. So is the real problem that we have ourselves to blame, that we are followers and not leaders – short answer is not everyone can be the leader. But, we need to stay focused and committed and advocate for what we believe is right. The Adrian example at the beginning of this post was and example of an advocate that recognized that public opinion and political policies are never static and will ebb and flow. Even from within governments positions on issues are not necessarily entrenched within the Party’s or even its voters. It is a case of reacting from the popularity base both within and outside the party and will influence those that make the hard decisions. A documented illustration of this is in Australia where a newly elected Government is already facing rough times over the party’s previous support of climate change policies such as the Emissions Trading Scheme (ETS). With the current Prime Minister saying his party does not support the view that climate change is real, and then others within, such as the popular Malcolm Turnbull, openly being supportive of an ETS. This suggests we will be in for more push polling efforts and misinformation peddling is in the wings. Sadly it will also auger well for those that will react with ‘we will review this matter’ and behind the scenes say – no further action required it will go away! He recipe for ‘seeing to be doing and not doing at all’!

CO2Land org will argue that until the opposition parties start acting professionally we can expect nothing more than talk on what is needed on meaningful climate change policies. But either way, neither the government nor the opposition parties can exempt themselves from being detrimental to the obvious environmental dangers we are facing now, and merely taking the arguments to the next election will just be too late.

Thank you to those that contributed to this thread – it shows the potential that there is still some really positive discussion going on. It also put into focus, what recently happened when the Australian Climate Council was established as a privately funded model after the government of the day chose to abandon public funding for its predecessor. We speculate that the thinking behind the funding denial was that it would put aside the issues the entity has uncovered. It might actually come back to bite the climate change deniers and we might even see better outcomes for the betterment of how society views the working of our democracy.

Illustration – LED technology triggers new value proposition.

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Is behavior management key to Greenhouse Gas (GHG) reduction? Demand management is a great place to understand GHG sources. Reasonable observations are they not?

Then in a discussion with Carbon Professionals was added an illustration of the view that maintaining interest in the effects of product life cycle is essential  – because the product itself can morph so quickly into another business matter.  If you think business then you will understand – “When things are going wrong in a supply chain, the first reaction is all too often ‘if we could forecast demand better, most of our problems would go away.’” CO2Land org speculates it is not the inability to better forecasting demand that is the main cause of what is ailing that company’s operations….it is the changing conditions that it operates under in creating the demand. It is the need to hold and speculate the demand for its inventory.

CO2Land then postulates the opening paragraph in this post and a position on this: Agreed, it is an interesting statement on the connects that occur with behaviour management and demand management. But: reinforcement can be more difficult after the initial effort, a diminishing return for the effort. Why? The initiative came from a policy and policy can be altered, definitions diffused and vested interests will separate DM and GHG as coincidental to each other. If you follow that you will understand that the business will settle on the economic differences – the measurable, and initially DM works to reduce GHG and then technology (like LED Lighting) removes the need to think about it any more – a new policy is then needed. Motivation must then be linked to another driver.

While discussing this issue a story was printed as

http://www.energymanagertoday.com/shift-to-led-lighting-may-trigger-cataclysmic-change-in-building-automation-industry-095407/

“Shift to LED Lighting May Trigger Cataclysmic Change in Building Automation Industry.”

The story overtly portrays “As we go forward, the case for retrofitting buildings with LED lighting will become very compelling and with it will come a much broader application of controls.

The key difference, though, is that these controls applications and projects will be lighting-centric rather than HVAC-centric and that will make all the difference. These lighting-centric projects will be motivated by LEDs but will naturally incorporate wireless and cloud technology. The result will be the emergence of new players, new technologies and new application delivery mechanisms. The existing industry structure and business models could easily come tumbling down.”

If technology shifts, the business model – what is the value?

Lessons learnt, and studied results suggest that industry structure will remain during the commencing and product development process of the evolutionary change, and this provides incremental gain in the existing value proposition of the company. Once that process markets the technology or change the technology enabled so changes the value propositions, and business survival requires changes in the industry structure.

The example for the building automation industry is that Digital controls were an evolutionary technology shift away from pneumatics, and now LEDs are doing more than making an evolutionary change they are enabling whole new value propositions built on the fact that light affects people and behavior. In this case you can predict the LED transition is and will be far more disruptive to the industry than the introduction of digital controls.

The impact of LED lighting is creating demand for coincident adoption of two other technologies, wireless networking and cloud services. Why? The incumbents in the traditional industries are not geared to extract value from the technology! It is very likely a small company will build a value proposition that is the right combination of business model and technology to drive the industry. Why a small company? Large companies need linear projection for outputs and evolution tends to be non-linear. A smaller company is more likely to be agile and able to adapt, and not shackled by conventional wisdom.  That is they attack with vision and gusto, and not defend with placards to impress the public.

Has the pace of change, changed? Business as usual for industry has powerful reasons for resisting change, and techniques are deployed to slow down the introduction of new technologies and systems. It is not unexpected for 10 to 25 years being considered reasonable for a company to adapt to new technology. But LEDs “come from an industry that moves very quickly, as do wireless networking and cloud services technologies. So, to the extent that companies in these adjacent industries choose to involve themselves directly in LED lighting and controls, the historical rate of change in building automation may be a poor indicator of the future.

It is worth noting that in 2005 there was no You-Tube. The cost and complexity of creating and posting video on the web was prohibitive for casual users. Now, only eight years later, almost anyone can create and post videos on the web … and millions of people do every day.”

The above quote does answer the question:  That is how fast things are changing. So, government policy has to get it right too – to survive another election – eh the needs of society!

 

 

 

how to change a capacity market that serves BAU

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In States like Western Australia there is potential for around 1 gigawatt of “avoided power purchase” to insulate against price rises through wide scale adoption by 2020, or in WA’s case 25% of the existing market. This is base load regenerative power capacity. In this discussion, Peter Davies of ID Gasifiers, also said “I was struck by the potential for increasing significant reduction of demand. Small scale efficient biomass energy plants are on the way.

CO2Land org recently posted, 10 September 2013:

the claim a capacity market only serves BAU

The quote in the story was from Dr Jeffery Doyle after posting his précis of a recent conference paper ‘A Cautionary Tale’ and reported through Greentech Media.

CO2Land org included in the story that advances in waste to energy technologies could have sufficient volume available in time for the next bidding cycle – assuming a two year timeframe – they have the potential to create an industry that has multiple product streams with the developing technology. This innovation can be described as ‘batteries’. The key is that reliable and predictable supply can be managed to provide the volume needed.

What might help readers understand the story better is some background facts on how the market operates in WA. The state operates its power supply under the Wholesale Electricity Market (WEM) that was set up so generators can offer electricity for sale to retailers who purchase electricity for their customers. It was part of the Western Australian Government’s reform of the way electricity is generated, distributed and retailed in Western Australia.

The WEM is not state wide in its supply, it in effect ‘islands’ grid connected supply to the more populist corner of the state and calls this bound the South-West Interconnected System or SWIS (an area bound by Kalbarri in the north, Kalgoorlie in the east, and Albany in the south). If you need to know, the ocean forms the boundary to the west. The dominant generation supplier is Verve Energy. Verve provides about 60% of the generating capacity in the SWIS. Verve Energy sells its electricity on the WEM as well as through bilateral contracts with other participants in the market. The majority of Verve electricity is sold to Synergy.

The operator and administrator of the market is called the Independent Market Operator (IMO). The IMO arranges the orderly dispatch of all the electricity traded and the System Operator, which is an independent operating arm of the network business, manages the dispatch.The bulk of electricity is traded as contracts between generators and retailers. In addition, the Short Term Energy Market provides for day-ahead and ‘realtime’ trading.

Reliability of supply is the paramount concern in the SWIS.

More information about the market is available on www.imowa.com.au and www.era.wa.gov.au.

What concerns the discussion, in this instance, is the Reserve Capacity mechanism as is intended to ensure that the South West Interconnected System (SWIS) has adequate installed capacity available from generators and demand-side management options at all times in order to:

  • Cover expected system peak demand including additional capacity to cover the failure of the largest generator on the system and a capability to respond to frequency variations.
  • Remove the need for high and volatile energy prices in the wholesale electricity market (WEM).

The Independent Market Operator (IMO) administers the Reserve Capacity mechanism.

If there is insufficient Certified Reserve Capacity to fully cover the total Reserve Capacity Requirement in a future Capacity Year, the WEM Rules (clause 4.1.16) require a Reserve Capacity Auction to be held to secure additional Certified Reserve Capacity.

A Maximum Reserve Capacity Price (MRCP) is set for each Capacity Year (clause 4.16.1) and determines the expected cost of new entrant peaking plant and other costs required to establish plant capable of supplying electricity to the SWIS (clause 4.16.4). MRCP has the following price setting functions in the WEM:

  • MRCP is the maximum offer price to apply for the Capacity Year for which a Reserve Capacity auction is being held (clause 4.18.2.(b)).
  • MRCP is scaled down by the IMO when there is more Certified Reserve Capacity than required in a particular Capacity Year (clause 4.29.1).

Clause 2.26.1 of the WEM Rules requires the Economic Regulation Authority (ERA) to review a report provided by the IMO that proposes a revised value of MRCP. In approving the value submitted by the IMO, the ERA is only required to consider if the revised value reasonably reflects methodology specified in clause 4.16 of the WEM Rules and whether an adequate public consultation process has been conducted.

Clause 2.26.3 of the WEM Rules requires the ERA to conduct a review of the methodology specified by clause 4.16 of the WEM Rules on each fifth anniversary of the first Reserve Capacity Cycle.

The opportunity to influence the MRCP is also an opportunity to have in place mechanisms to encourage innovations, albeit Co2Land org has in the 10 Sept 2013 story said would require a courageous action. Writing in a preference to supply clause to alternative solutions or innovations to break the bidding ‘status quo’.

The typical Certified Reserve Capacity notices are typically listed Feb 2012 notices for MRC 2014/15, Jan 2013 for MRC 2015/16. Hence this might help you understand that bids are accepted 2 years into the future, but the need to influence should commence 2 years prior to that time of notice.

Can you bank on that?