AFCEA Bethesda Smart Tech Symposium Interview Series: Mark Lively, Energy Economist

On October 23, AFCEA Bethesda is hosting an innovative educational symposium for government and industry participants who are or want to be on the cutting edge of smart technology and sustainability. The goals of the event are to make the business case for sustainability, show “big data” applications for energy management, highlight accomplishments with smart building technologies, illustrate saving from effective Federal fleet management, data center energy efficiencies and sustainability leading practices, articulate the connection between data centers and sustainability, and explain the impact of recent regulations and policy related to sustainability for IT procurement.

The AFCEA Smart Tech Symposium Social Media Team put together a mini series of interviews with Academic Experts on related subject matter, to get them to provide insight into their research and how they play a part in building the business case for sustainability on a daily basis through their work.

Our second interview is with Mark Lively, an energy economist who designs financial models that deal with electricity and natural gas, primarily pricing models. Mark Lively also keeps a blog www.livelyutility.com/blog that looks at economic issues from the perspective of an engineer. We asked Lively a series of questions to give us insight into his work and what keeps him motivated to solve some of our toughest energy challenges.

Mark, can you give us a brief description of your research and your interests in energy economics and energy policy?

My interests deal with the pricing of electricity and natural gas, especially pricing the unscheduled flows of those commodities. When there is a systemic imbalance, we can measure the effect of that imbalance and use the size of the systemic imbalance to price customer imbalances. If the customer is contributing to the systemic imbalance, the price faced by the customer for its imbalance should appear to be punitive. If the customer is reducing the systemic imbalance, the price faced by the customer for its imbalance should seem to be a reward.

Tell us about how your research fits into the broader framework of building a business case for sustainability.

I see sustainability as another buzzword for limiting the effects of a free and competitive market. For instance, the Texas Railroad Commission (TRC) in the early 20^th Century felt that unfettered petroleum production would produce ruinous competition and very low oil prices. The TRC imposed limits on how much oil each well could produce each month, generally based on a percentage of the well’s capability, or a Proration of the state production among the various wells. This kept the price up and the Texas oil industry sustainable. As demand grew, the limit was eventually raised to 100%. OPEC based its production quota concept on the TRC Proration plan.

What suggestions do you have to level the cost competitiveness of renewables in comparison to fossil fuels?

Renewables need better ways to store electricity so that the electricity is available to the grid when electricity is more valuable. Indeed the mindset suggested by the question is a problem. Renewables must compete against the market price at the various times of the day and year. Having a low cost isn’t important if the only time that the renewables are available is during periods of surplus. See “Renewable Electric Power—Too Much of a Good Thing: Looking At ERCOT,” Dialogue, United States Association for Energy Economics, 2009 August.

http://livelyutility.com/documents/USAEE-ERCOT%20Aug%2009.pdf

How will widespread implementation of smart grid technologies influence businesses and consumer choices surrounding energy and resource management?

Smart grid technologies will fail unless there are tied to smart pricing systems that reward businesses and other consumers for making appropriate choices. See “Dynamic Pricing: Using Smart Meters to Solve Electric Vehicles Related Distribution Overloads,” Metering International, Issue 3, 2010.

A very special thank you to Mark Lively for giving us his time and insight into how his research helps consumers and businesses understand how they can play a part in solving the energy equation.

If you would like to learn more and keep these discussions going, attend the AFCEA Smart Tech Symposium. The event link, complete with the agenda and confirmed speakers is listed below.

Event link: http://tinyurl.com/cmxx4cn

Confirmed Speakers: https://www.signup4.net/public/ap.aspx?EID=SMAR36E&OID=148

Who Should Attend:

• Agency representatives releasing new IT contracts, including data center consolidation
• Agency representatives responsible for achieving the goals in their agency’s Strategic Sustainability Performance Plan
• Industry representatives looking for new opportunities outside the CIO’s office for IT, including cloud, big data, and mobility
• Company executives that need to understand the business case for incorporating sustainable practices into their overall corporate strategy and operations
• Federal capture and business development executives needing to be informed about government-wide trends
• Small business representatives and system integrators interested in teaming opportunities

Learning objectives include:

• New opportunities for traditional IT companies in this trend of “smart” facilities
• New training and organizational change opportunities associated with this trend
• Insight on how to position your IT offerings to help government use “big data” to increase sustainability of operations and reduce operating costs
• Education for the private sector to create solutions that enable the government to realize the goals of the National Strategy for Electronics Stewardship
• Case studies on how agencies have achieved cost savings by operating more sustainably
• Information on new tools, processes and methodologies in sustainability
• Details on agency requirements, including specific policies, mandates, and recent executive orders