Yes, I think it is Churchill that is credited with the phrase, "never let a good crisis go to waste"! Major Reviews are the tried and tested way of taking the heat out of a crisis. The problem is, the electricity supply is a service that is deliberately set up to fail because you could spend 10 times the amount we do now and I doubt the number of crises would go down very much. Yet, I don't see anyone regularly telling people that truth day to day, let alone during or even after a crisis.
And we need to consider the incentives of review teams. Investigations seem to run on the idea that "no stone, no matter how small, will remain unturned" (ie little consideration of how small a role it might play) . Recommendations seem to follow the mantra, "no idea will be left behind" (ie little consideration of their value).
Finally, once the review report is published, it becomes politically difficult for bodies on the receiving end of the recommendations to push back on them. This can be constitutionally fraught because those bodies are usually required by legislation to be open-minded and consultative when considering regulatory changes and only implement them if they meet strict objectives (eg NEO).
On a somewhat related note, I saw a meme today along the lines of "I'm old enough to remember dial up, but young enough to crack it if a webpage takes longer than 5 seconds to load" (my patience extends about 2-3 seconds, truthfully).
I think it's extremely easy to take for granted both how insanely amazing the modern electricity system is, and how fragile it is (actually, this is true of all large complex systems). And the fact that that fragility is not linearly correlated with expenditure.
Completely agree with your past paragraph. I think its also easy to get swept up in the idea that the world and electrical system is going through these big fundamental changes, so it follows that the regulatory framework needs to match this. Having drunk the koolaid at the regulator and working in industry, regulatory stability feels vastly undervalued
I agree. However, I would reframe your point about the value of regulatory stability. I think it is more often the case that, given an imperative or perceived justification for change (for example, by being handed a review report containing a laundry list of recommendations), regulators can tend to downplay the inherent costs and perverse outcomes associated with the changes and overstate the benefits of them.
Yes congrats Alex & best wishes to your better half and baby😁. Meanwhile I can’t let this article pass without some comment.
I worked in regulation for a DNSP in two stints with a 4 to 5 year break between them back in the field so to speak. Folk wondered if I would need sometime to catchup with things “that we’re moving fast and we’re quite complex”. I didn’t need much time as most of what was being debated were the same subjects from 4 years previous. Regulation grinds slowly even in face of MRs.
Further, as to whether a MR is successful or not the worst aspect in my experience is that the MR is called for after things seem to be going wrong and then the MR results in going back to what was in place before numerous Minor Reviews and Rule interpretations resulted in unintended consequences.
We seemed to always be going in circles, though most didn’t realise it. Which brings me the point that the average life of the collective memory is probably of the order of 2 to 3 years, which is better than the memory of a gold fish 🐠 and depending on how you look at it good for the regulation industry but not much fun for those that try to get things done or in my case find themselves back in regulation having thought they’d escaped. 😬
This is very interesting, the longer I spend in the industry, the more I find ideas and proposed changes that have been around forever being dredged up, or in my favourite worst case - when markets swap ideas!
Case in point, AEMO is currently considering assessing new projects in batches rather than individually, and one of the American grids (possibly ERCOT, can't remember) currently assesses new projects in batches but is finding this process has many pitfalls and is considering assessing projects individually!
Interesting to consider that sometimes we make so many incremental changes that we need to stop and consider a major overhaul!
Major overhauls of market systems are fraught. There is an alluring logic to the idea that a couple of decades of incremental changes to the market system must mean it is beyond time to make a "clean slate" replacement. I watched that train wreck occur in NZ. I was in market services team in the SO at the time we pitched for what we thought was a relatively small and harmless upgrade to the version of C-plex we were using for SPD (the NZ version of NEMDE). The scope snowballed out of control into a full market system replacement! The problem is, no one fully understands all the interactions between the myriad software modules that are all connected. It can take years to understand and map them accurately and it is a pre-requisite to develop a replacement.
That market systems replacement was supposed to take 3 years and cost $12M. It ended up taking six years, cost over $100M for a cut-down version of the original scope and it prevented any market systems changes for 3 years.
The pitch was that, once done, changes to the market systems could be implemented much faster and more cheaply. Nothing could have been further from the truth. It was slower and more expensive.
Yes, I think it is Churchill that is credited with the phrase, "never let a good crisis go to waste"! Major Reviews are the tried and tested way of taking the heat out of a crisis. The problem is, the electricity supply is a service that is deliberately set up to fail because you could spend 10 times the amount we do now and I doubt the number of crises would go down very much. Yet, I don't see anyone regularly telling people that truth day to day, let alone during or even after a crisis.
And we need to consider the incentives of review teams. Investigations seem to run on the idea that "no stone, no matter how small, will remain unturned" (ie little consideration of how small a role it might play) . Recommendations seem to follow the mantra, "no idea will be left behind" (ie little consideration of their value).
Finally, once the review report is published, it becomes politically difficult for bodies on the receiving end of the recommendations to push back on them. This can be constitutionally fraught because those bodies are usually required by legislation to be open-minded and consultative when considering regulatory changes and only implement them if they meet strict objectives (eg NEO).
On a somewhat related note, I saw a meme today along the lines of "I'm old enough to remember dial up, but young enough to crack it if a webpage takes longer than 5 seconds to load" (my patience extends about 2-3 seconds, truthfully).
I think it's extremely easy to take for granted both how insanely amazing the modern electricity system is, and how fragile it is (actually, this is true of all large complex systems). And the fact that that fragility is not linearly correlated with expenditure.
Completely agree with your past paragraph. I think its also easy to get swept up in the idea that the world and electrical system is going through these big fundamental changes, so it follows that the regulatory framework needs to match this. Having drunk the koolaid at the regulator and working in industry, regulatory stability feels vastly undervalued
I agree. However, I would reframe your point about the value of regulatory stability. I think it is more often the case that, given an imperative or perceived justification for change (for example, by being handed a review report containing a laundry list of recommendations), regulators can tend to downplay the inherent costs and perverse outcomes associated with the changes and overstate the benefits of them.
Maybe it's time for a Major Review of the reviews
So long as it's got a catchy name and a pillar of the community to lead it! What's Dr Chris Brown doing these days..?
Bondi Rescue the Electricity Market
Yes congrats Alex & best wishes to your better half and baby😁. Meanwhile I can’t let this article pass without some comment.
I worked in regulation for a DNSP in two stints with a 4 to 5 year break between them back in the field so to speak. Folk wondered if I would need sometime to catchup with things “that we’re moving fast and we’re quite complex”. I didn’t need much time as most of what was being debated were the same subjects from 4 years previous. Regulation grinds slowly even in face of MRs.
Further, as to whether a MR is successful or not the worst aspect in my experience is that the MR is called for after things seem to be going wrong and then the MR results in going back to what was in place before numerous Minor Reviews and Rule interpretations resulted in unintended consequences.
We seemed to always be going in circles, though most didn’t realise it. Which brings me the point that the average life of the collective memory is probably of the order of 2 to 3 years, which is better than the memory of a gold fish 🐠 and depending on how you look at it good for the regulation industry but not much fun for those that try to get things done or in my case find themselves back in regulation having thought they’d escaped. 😬
Thanks Troy!
This is very interesting, the longer I spend in the industry, the more I find ideas and proposed changes that have been around forever being dredged up, or in my favourite worst case - when markets swap ideas!
Case in point, AEMO is currently considering assessing new projects in batches rather than individually, and one of the American grids (possibly ERCOT, can't remember) currently assesses new projects in batches but is finding this process has many pitfalls and is considering assessing projects individually!
Interesting to consider that sometimes we make so many incremental changes that we need to stop and consider a major overhaul!
Major overhauls of market systems are fraught. There is an alluring logic to the idea that a couple of decades of incremental changes to the market system must mean it is beyond time to make a "clean slate" replacement. I watched that train wreck occur in NZ. I was in market services team in the SO at the time we pitched for what we thought was a relatively small and harmless upgrade to the version of C-plex we were using for SPD (the NZ version of NEMDE). The scope snowballed out of control into a full market system replacement! The problem is, no one fully understands all the interactions between the myriad software modules that are all connected. It can take years to understand and map them accurately and it is a pre-requisite to develop a replacement.
That market systems replacement was supposed to take 3 years and cost $12M. It ended up taking six years, cost over $100M for a cut-down version of the original scope and it prevented any market systems changes for 3 years.
The pitch was that, once done, changes to the market systems could be implemented much faster and more cheaply. Nothing could have been further from the truth. It was slower and more expensive.
Congratulations Alex on the addition to your family. And I hope the travels were good Declan
Thanks Lucas! 🙏
Thanks Lucas!