1 00:00:09,500 --> 00:00:18,300 Well, regulation tries to modify the behavior of people, of companies. 2 00:00:18,360 --> 00:00:20,160 We are talking now about infrastructures. 3 00:00:20,160 --> 00:00:24,860 So the companies that provide infrastructures in a certain sector. 4 00:00:24,860 --> 00:00:31,860 So that in general you try to achieve common good. 5 00:00:34,979 --> 00:00:39,019 The lack of regulation is also regulation because people will be incentivized to do 6 00:00:39,019 --> 00:00:40,710 one thing or another. 7 00:00:40,710 --> 00:00:44,460 And what we try with regulation is to steer to drive the behavior, 8 00:00:44,460 --> 00:00:49,649 if needed, of companies in a certain sector, as I said. 9 00:00:49,649 --> 00:00:55,219 Well I think that, I try to explain to my students in the classes 10 00:00:55,219 --> 00:00:57,940 of the regulations of the power sector that I teach, 11 00:00:57,940 --> 00:01:03,789 that regulation has to be long, loud and legal. 12 00:01:03,789 --> 00:01:07,900 By loud, what I mean is that the regulation has to be strong enough. 13 00:01:07,900 --> 00:01:13,320 So the signals, the incentives that are provided have to modify behavior. 14 00:01:13,320 --> 00:01:18,150 So if the prices are too low, let's say, of CO2 in the European Emissions 15 00:01:18,150 --> 00:01:21,680 Trading system, then you don't change behavior, 16 00:01:21,680 --> 00:01:24,710 the clean technologies will not be developed for instance. 17 00:01:24,710 --> 00:01:26,740 So loud is important. 18 00:01:26,740 --> 00:01:31,900 Also long, so the regulation has to be for infrastructures that have a long economic life, 19 00:01:31,900 --> 00:01:36,900 people are going to invest if they think that the regulation is going to last for decades. 20 00:01:37,410 --> 00:01:41,060 So it has to be stable, and in order to be stable it has to be legal. 21 00:01:41,060 --> 00:01:45,760 So legal means that it's orthodox, that it's not tilted that it creates a level 22 00:01:45,760 --> 00:01:48,630 playing field among the different stakeholders. 23 00:01:48,630 --> 00:01:50,850 So it's a regulation that could stay. 24 00:01:50,850 --> 00:01:57,850 So loud, long and legal make good regulation. 25 00:02:02,460 --> 00:02:07,390 It's true that the sector of regulators are looking for the sector. 26 00:02:07,390 --> 00:02:13,069 So they're trying to do the best that they can in gas and electricity but they ignore 27 00:02:13,069 --> 00:02:13,989 for instance transportation. 28 00:02:13,989 --> 00:02:17,620 Or they're telecommunications, but they ignore electricity. 29 00:02:17,620 --> 00:02:25,400 In some cases they have tried to have a regulatory commission that encompasses all the regulated sectors. 30 00:02:25,530 --> 00:02:27,370 I don't think this is a good idea. 31 00:02:27,370 --> 00:02:29,209 I've been a regulator in two countries. 32 00:02:29,209 --> 00:02:30,879 I've been a regulator, a commissioner, 33 00:02:30,879 --> 00:02:35,420 in Spain for electricity, I've been a regulator in Ireland, 34 00:02:35,420 --> 00:02:39,739 also for the wholesale market and this is difficult enough. 35 00:02:39,739 --> 00:02:47,069 So, trying to have experts in telecommunications, transport, water and electricity and gas 36 00:02:47,069 --> 00:02:48,620 at the same time is impossible. 37 00:02:48,620 --> 00:02:53,689 I think that it is better to have some connection between the regulatory commissions so that 38 00:02:53,689 --> 00:03:00,279 they try to smooth out the differences between the different regulatory agencies, 39 00:03:00,279 --> 00:03:04,400 but it is better to have sectorial ones, in my opinion. 40 00:03:10,000 --> 00:03:15,680 Well, I think that the regulator should try to, 41 00:03:15,680 --> 00:03:19,779 I mean the role is not to establish public policy, 42 00:03:19,779 --> 00:03:23,279 so energy policy for instance, which is my field, 43 00:03:23,279 --> 00:03:29,700 I mean the major guidelines, the major targets have to be established by governments. 44 00:03:30,219 --> 00:03:35,419 Sometimes they come from international relations, and the regulators are looking at secondary 45 00:03:35,419 --> 00:03:37,609 regulation and try to implement it. 46 00:03:37,609 --> 00:03:44,609 So typically, at that level of values they don't have much freedom, 47 00:03:44,819 --> 00:03:47,040 so the values have been decided for them. 48 00:03:47,040 --> 00:03:52,870 But it is also true that regulators could take a proactive stance with respect to 49 00:03:52,870 --> 00:03:55,180 for instance clean technologies. 50 00:03:55,180 --> 00:04:00,419 They could be neutral and do nothing, or they could realize that secondary regulation 51 00:04:00,419 --> 00:04:06,499 is critical to achieve the purposes of the main regulation and then they should try to, 52 00:04:06,499 --> 00:04:09,439 try to have also a soul. 53 00:04:09,439 --> 00:04:12,340 So regulators should not be agnostic. 54 00:04:12,340 --> 00:04:17,600 I think that they should also be interested in promoting sound regulation in terms of values, 55 00:04:17,600 --> 00:04:20,000 but it is difficult. 56 00:04:23,780 --> 00:04:28,790 The regulation at high level will determine that, 57 00:04:28,790 --> 00:04:37,200 let's say the European Commission will agree on some directive to approve on a certain CO2 target. 58 00:04:37,620 --> 00:04:44,480 And then, well if the CO2 target is stringent enough the prices of CO2 will be high and 59 00:04:44,480 --> 00:04:50,450 those prices will make that the clean technologies will become more competitive with the other, 60 00:04:50,450 --> 00:04:56,990 with respect to the other ones, or that practices like for instance driving 61 00:04:56,990 --> 00:05:03,280 vehicles that are very polluting, I mean that they consume a lot of fuel and 62 00:05:03,280 --> 00:05:07,110 well they are inefficient, they will be penalized. 63 00:05:07,110 --> 00:05:10,160 The same thing that is that power plants will be penalized etc. etc. 64 00:05:10,160 --> 00:05:15,670 Or the cleaner ways of transportation will be more successful, 65 00:05:15,670 --> 00:05:21,600 more competitive, but as I said those targets are typically established at the international level, 66 00:05:21,600 --> 00:05:26,400 or national level and this is not the realm of the regulatory agencies. 67 00:05:26,410 --> 00:05:29,700 The regulatory agencies, typically, are working at a lower level, 68 00:05:29,700 --> 00:05:32,000 implementing those measures. 69 00:05:37,000 --> 00:05:47,500 Well, I am working now in projects for universal access to electricity in India, in Peru, Kenia, 70 00:05:47,500 --> 00:05:54,080 looking at other countries also, and what I would say is that we have to think 71 00:05:54,080 --> 00:05:59,740 about regulation in a different way when we are trying to approach these problems. 72 00:05:59,740 --> 00:06:03,590 One thing that we have to realize is that in developed countries, 73 00:06:03,590 --> 00:06:07,180 in my own country Spain, or I've seen that in the United States, 74 00:06:07,180 --> 00:06:13,090 I would say that in all countries in Europe, universal access to electricity in maybe in 75 00:06:13,090 --> 00:06:18,900 the forties or the fifties was achieved by subsidies from the people who had access to electricity, 76 00:06:18,900 --> 00:06:21,960 that paid a surcharge so that it was possible 77 00:06:21,960 --> 00:06:25,300 to extend the grids, provide electricity to everybody and then 78 00:06:25,300 --> 00:06:29,920 people were able to pay to maintain, and to pay for the charges, 79 00:06:29,920 --> 00:06:33,560 but not for the infrastructure that was needed to reach them. 80 00:06:33,560 --> 00:06:39,580 So that means that a certain volume of subsidies will be always needed to reach to the people 81 00:06:39,580 --> 00:06:42,530 who don't have access to electricity in many parts of the world. 82 00:06:42,530 --> 00:06:43,420 So this is one issue. 83 00:06:43,420 --> 00:06:51,300 Another one is that in many cases we are dealing with countries that have companies that are bankrupt. 84 00:06:51,310 --> 00:06:59,900 And, trying to bring, I mean to create conditions for those companies, 85 00:07:00,000 --> 00:07:03,300 electricity companies, to invest will be difficult. 86 00:07:03,300 --> 00:07:06,360 And sometimes the solution comes from microgrids, 87 00:07:06,360 --> 00:07:12,580 or individual solar systems, and those require specific regulation. 88 00:07:12,580 --> 00:07:16,020 In many places, I know in India, some other places in Africa, 89 00:07:16,020 --> 00:07:21,040 those micro grids are, or standalone solar systems, 90 00:07:21,040 --> 00:07:22,810 are appearing without regulation. 91 00:07:22,810 --> 00:07:30,400 Companies that realize that people are willing to pay a lot per kilowatt-hour to have a very 92 00:07:30,420 --> 00:07:34,520 basic access to a couple of lights and a telephone charger. 93 00:07:34,520 --> 00:07:36,630 And then they are, without any subsidy, 94 00:07:36,630 --> 00:07:40,420 they are doing their business in providing very basic electricity. 95 00:07:40,420 --> 00:07:45,780 I think that regulation there should take care of standardizing those practices to make 96 00:07:45,780 --> 00:07:52,590 sure that when electricity through connection to the grid could be provided or later if 97 00:07:52,590 --> 00:07:59,590 those people are able to consume more electricity, that they will be able to upgrade those networks, 98 00:08:00,360 --> 00:08:06,810 or those systems so that they could have not only the very basic tier one service, 99 00:08:06,810 --> 00:08:11,020 but tier two, three, four and have access to a better life. 100 00:08:11,020 --> 00:08:15,870 The vast majority of micro grids, except in developing countries, 101 00:08:15,870 --> 00:08:19,960 will have to come, I mean will be connected to the grid. 102 00:08:19,960 --> 00:08:24,250 So it is, I mean the micro grids, with vocation to be autonomous, 103 00:08:24,250 --> 00:08:27,340 all people could do that, or they want to be independent, 104 00:08:27,340 --> 00:08:30,280 or they hate the electric utility that is fine. 105 00:08:30,280 --> 00:08:37,240 But from economic and environmental reasons, I would say that micro grids make a lot of 106 00:08:37,240 --> 00:08:44,240 sense in developing countries when you have long distances from the main grid and make 107 00:08:44,270 --> 00:08:49,060 sense in order to reduce vulnerability in developed countries. 108 00:08:49,060 --> 00:08:56,060 If people want to have a system, well in case of emergency could be autonomous.