Wednesday, 22 October 2014

Big Data: Utilities Are Truly Dumb

One fine day, Aunt & Uncle Drew received a ludicrous water bill.  They challenged it immediately.  The first functionary they spoke to said, well that can't be right: pay 'x' (a more reasonable amount he nominated) for now, and we'll look into it.  So they paid 'x'.

Six months later, another bill arrived - seeking an even more astronomical amount, plus the 'arrears' from the previous bill, all in menacing red ink.  Another 'phonecall: but this time the water company people sucked audibly on their pencils and said the 'arrears' had better be cleared or there'd be trouble - have you been taking lots of baths?  So A & U demanded to speak to a supervisor, who passed them on to 'debt management', who took a more emollient line.  Since A & U are on the 'senior' side of life, they could agree a 'payment plan' which, provided they adhered to it, would cause the amount to be re-classified from 'arrears' to something less penal.  Then the matter would be looked into.

To be fair, the payment plan was set at a pretty modest monthly amount, and it defused the red-ink crisis.  But after a few weeks, with no progress towards sorting the matter, further pointed 'phonecalls were made until some genius at the other end said: maybe there's a leak !  Could you turn off everything, go and peer at the down-hole meter, and tell us what you see.  This task fell to yours truly (being slightly better able to crawl around on the pavement etc) and lo ! - with everything turned off the little dial was perceptibly turning.  Ahah said the voice on the 'phone, that sounds like a leak !

There then followed some dialogue about whose responsibility this might be etc etc which need not detain us: suffice to say they turned up, discovered the meter itself was leaking, fixed it; and negotiations are ongoing as to what should be the deemed usage during the period of the leak.

Ah yes, the period of the leak.  Can we retrospectively identify with reasonable accuracy when it started ?  Oh yes we can ! - take a butchers at this graph of the average monthly usage, drawn up on the basis of several years' worth of half-yearly bills carefully archived by A & U, plus ongoing personal readings of the meter to ensure justice is served.

Yes friends, we can indeed spot the leak.  A nasty one, I'd say, getting progressively worse until they fixed it.  All that lost water !  And not too difficult to estimate the amounts, either.

Among several points one could make about this kind of nonsense, let's think about simple, nay, trivial data mining.  A usage pattern like the one above (produced by myself using nothing more complicated than Mr Microsoft's excellent spreadsheet) could not plausibly be accounted for by extra bath-nights chez Aunt & Uncle Drew.  Given that the water companies are supposed to be on notice to improve their statistics on wastage etc, not to mention customer service, what could be simpler than an automated check for egregious outliers like this ?  Even if they can't stretch to pre-emptive data mining, couldn't the response to distressed 'phonecalls be based on simple after-the-fact analysis of no greater sophistication than the one wot I did ?  At the click of a mouse ?

Mr Tesco has been doing vastly more advanced - and proactive - stuff than this for yonks.  Ditto the banks, ditto the telecomms companies.  Why are utilities such rubbish ?


Tuesday, 21 October 2014

Who wants to be a millionaire ?

Tonight, the EuroMillions lottery prize is estimated to be £143,000,000.

One lucky winner is going to 'invest' £2 and earn a whopping, life changing sum. And it COULD BE YOU!

But it won't be. not you, or me. This lottery has already rolled over 4 times. That means despite all the regular players, and those newly tempted for a flutter by the prize money, having already each tried to guess the seven necessary numbers, not a single person in Europe has. The odds are 116 million to one. it isn't going to happen.

Still, speaking as someone who won $1,000 at Caesar's Palace, and then dragged the wife over to the Wheel of Fortune  to show her how I did it ..  and won another $1,000 .. for an outlay of $10, it CAN happen.! Dream the dream of totally undeserved megawealth.

But if you did win, good and sensible readers of Capitalists@Work, where are you going to put your oligarch's fortune?

Assuming you buy yourself a Maclaren Supercar. And whatever vehicles the others in your immediate family want to have. .A mansion in Virginia Water. A modest flat in Chelsea..A Monaco apartment. New furniture to fill your new homes as you won't want your old tat cluttering up your new domiciles. And new clothes .. makeover ..plastic surgery .. best sporting equipment and entertainment systems on offer .Super-luxury holiday to Australia, Japan, Dubai.. and then dish out handfulls of millions to your lucky brothers and sisters and cousins and so forth...well, chances are, you will still have at least £100 million left.

That is a lot of money to find somewhere safe to keep it. The banks are only guaranteeing you £85,000 per bank. You can't have a thousand bank accounts. 
The ISA annual tax free allowance isn't even a day's interest. Premium bonds can't take more than 0.0004% of your CASH wealth. You can put money into shares. But..that whole dotcom thing..and Enron..And Disney! Or there is property. But Ed and Vince and even George are just waiting for mugs to buy million pound homes so they can take a few tens of thousands of pounds off them each year.

Personally, I might stash 10 million around the world, in various banks and buildings, just for emergencies,  and then use the £90 million remaining to make a romcom movie staring Angelina Jolie and myself.
After all, people, and governments,  are going to be trying very hard to take this dosh off of me.
At least I'd have a memorable screen kiss with Angelina on a speedboat, whilst spraying bullets at black outfitted bad guys .. Or instead, you could just give lots of it it to Alex Salmond like some previous euromillion winners chose to do.

Assuming you, the good and hopeful, blog readers, would rather invest the remaining money you have decided not to just blow in the initial euphoria, where on earth are you going to put it? Where can you deposit it with a reasonable degree of certainty that it will be there when you return to check on it?

Its a tricky problem.
Though admittedly, a problem it would be very nice to actually have.

Ebola and Nigeria: Quite, Quite Extraordinary

In the Drew household, at the end of a broadcast news item we reserve to ourselves the right to chorus: do we believe this?  We are arts graduates at heart: but when it comes to boring old matters-of-fact, the Drew household tries to be a bastion of rigorous empiricism and the scientific method.  So our chorus is raised in a quizzical, measured tone.  We are always open to being convinced.

But repetition of assertions in the media doesn't count.

Now then.
The World Health Organisation declared on Monday that Nigeria is free of Ebola, a rare victory in the months-long battle against the disease. Nigeria’s containment of Ebola is a “spectacular success story”, WHO country director Rui Gama Vaz told a news conference in Nigeria’s capital
Wow.  And some details:
Persistence, rigorous enforcement of quarantine and disinfection of premises contribute to a success story for Nigeria ... Even though that involved hunting through crowded buildings in streets without door numbers, Nigerian teams managed to trace everybody who had been in contact with Sawyer and everybody who had contact with those who later developed the disease ... the list of contacts reached 898 and they were not all in Lagos. A nurse who became infected travelled more than 310 miles to Enugu, finding at least 21 contacts. But the biggest crisis was caused by one of Sawyer’s contacts, who had been infected, fleeing to the oil capital, Port Harcourt, where he infected a doctor. That doctor, who died, was linked to 526 contacts, including many members of his church who carried out a healing ceremony for him involving the laying on of hands. In total, the contact tracers made 18,500 face-to-face visits to check on people for raised temperature.
Nigeria.  Free of Ebola.  Rigorous enforcement.  Managed to trace everybody.  Everybody.

This is deeply impressive, and a lesson to Spain, Texas, everyone.  I hope and pray it's true.


Monday, 20 October 2014

Energy: Large-scale Unintended Consequences

Wherever you look, 21st century energy policy has been hatched by people who know far less than they need to about the subject in hand.

It's sometimes necessary to disagree with the 'experts'.  Prior to liberalisation of the energy markets, the experts - all wedded to the extremely comfortable monopoly model - declared with absolute certainty that gas and electricity were inevitably and essentially matters for monopolies to control.  Not really commodities at all: something magical and different.  Competition ?  Trading ?  No, these were simply impossible.  Trust us.  We are as efficient as it is possible to be. (© Denis Rooke, 1985)

On that, the experts were utterly wrong.

But that doesn't give a licence to greenish, or green-appeasing politicians and civil servants, to announce that electricity grids can be run on windfarms and wishful thinking for zero CO2 emissions, when people who genuinely know better can prove otherwise.  Sadly this is not enough to stop them giving it a try, armed with vast amounts of our money.  But it ain't gonna work: and the harder they try, the more bizarre will be the unintended consequences.  To list a few that had already made themselves apparent a year or so back:
  • Germany, which has gone further and faster than any country (and, some would say, with the least planning) has seen record levels of expenditure on renewables, record high power prices to residential customers, and, yes, rising CO2 emissions
  • ... and, yes, rising CO2 emissions in the UK also
  • ... and around 50% of 'renewable' energy in the EU coming, not from the antiseptic, sunlit windfarms / solar farms / hydro plants of the brochures, but filthy biofuels, whose only claim to reducing CO2 emissions comes from the fact that they are deemed to do so, irrespective of the truth (which is that in most cases they don't)
And now we have the UK 'capacity market' in the electricity sector, being introduced this year to rectify the problem that in an era when no-one moves without a subsidy, no-one seems willing to build unsubsidised power plants to relace the coal stations that are closing with each passing year.  I may write on the technicalities of this 'market' another time, but for now we need simply to look at the recently published details of who are bidding into the auction process for being awarded 3-year or even 15-year wads of 'capacity payments' (i.e. standing charge contracts) for the 'new capacity' they promise to bring onto the UK grid.  

A fair chunk (by volume) of the bids are made by would-be developers of new CCGTs (large gas turbines in their most efficient configuration).  This is what the government hoped for.  But new CCGTs are costly, and unlikely to win at auction, because even more capacity is on offer from other sources, e.g. bids from companies offering to put old, mothballed CCGTs back into service (again, anticipated and welcomed by DECC).

Then come the unintended consequences.
  • one of the largest 'new build' CCGTs is in fact two-thirds already built, and starts up next year anyway, whether it gets a capacity contract or not!  (The capacity payments don't start until 2018)
  • a large chunk of the bids comes from owners of existing coal plants, offering 'new capacity' by way of eking out extended and better performance from their ageing kit
  • the biggest bidder is bloody EDF, hands out again, pretending that its long-announced life-extension projects for its existing UK nukes are also 'new capacity'.  Again, these are money-for-old-rope projects that will go ahead anyway

Needless to say, this is not what DECC or the greens initially expected from the capacity market, though the logic of it had begun to dawn on them over the summer.  The howls of outrage greeting the coal projects in particular are hilarious to hear.  Anyone could have told them: it's always cheaper to refurbish existing capacity than build new plant.

Looking back at several years' worth of C@W energy postings, I find I have invoked reductio ad absurdum several times: and it is time to roll out this venerable tool of formal logic once again.  The absurdities are there for all to see.   The logicians' answer is that the original assumptions must be wrong.  That's the correct conclusion, and one we urgently need DECC to draw.