Sustainable Business and Regulatory Models for Electricity ... · Transactive Energy Platforms:...

Sustainable Business and Regulatory Models for Electricity:

Transactive Energy

Edward G. Cazalet, Ph.D.CEO, TeMix [email protected]

April 9, 2015

Public Utilities Fortnightly Conference:Utilities - the Uncertain Future

National Press Club

mailto:[email protected]

Increasing Disruption and ComplexityGHG & CA 50%

RenewablesSolar

Overgeneration and Duck Curve

Storage Mandates and

Operation

ISO/RTO Complexity

Net Energy Metering (NEM)

and Cost Recovery

Many Complex and Ineffective Retail

Tariffs: Tiers, TOU, RTP, Fixed Charges,

Demand Charges, Minimum Bills

Microgrids

Expanded Direct Access

Demand Response 2.0& FERC 745

Future Business & Regulatory

Models

Stranded Costs and Regulatory

CompactSubsidies

(incl. low income)

DSOs and VPPs

Capacity & Flex Capacity

© 2014 Baker Street Publishing, LLC. All Rights Reserved.

Transactive Energy Platforms: host robust cost-of-service, competitive,

and hybrid business and regulatory models.

Transactive Retail Tariffs: forward subscriptions for revenue and bill stability and spot transactions to efficiently

balance variable supply and demand.

Two Foundations for Sustainable Business and Regulatory Models

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Transactive Energy (TE) Platforms

TEPlatforms

Energy ServicesParties

Intermediaries- Exchanges- Marketers- Retailers- System

Operators- Automated

Market MakersTransport Services Parties

ServiceInterface

- Consumers- Producers- Prosumers- Storage Owners

Tenders and Transactions

- Transmission Operators (TO)

- Distribution Operators (DO)

Regulators

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Transactive Retail Tariffs• Based on my typical usage/production, I automatically

transact on a TE Platform with one or more suppliers for a subcription for a prescribed quantity of energy and transport in each hour of the year(s) for a prescribedmonthly payment .

• If I use less than I subscribed for in each hour then I am paid for the difference at an hourly or 5 minutespot price.

• If I use more than I subscribed for then I pay for the difference at an hourly or 5 minute spot price.

• At any time I can automatically buy or sell to modify my position at current tendered prices on a TE Platform.

Ref: A Model InteroperableTransactive Retail Tariff - Smart Grid Interoperabltiy Panel (SGIP)http://www.sgip.org/Publication-Retail-Tariff

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http://www.sgip.org/Publication-Retail-Tariff


Parties automatically manage facilities and devices in response to Transactive Retail Tariffs from TE Platforms.

Service Interface 0321

Grid

HVACSystem

WaterHeater

Battery

SmartAppliances

IntervalMeter

TE Platforms

EMS

Forward & Spot Tenders &

Transactions

Generator

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http://www.chargepoint.com/img/products/large/ct2025.jpg

http://www.chargepoint.com/img/products/large/ct2025.jpg


The four big ideas of Transactive Energy (TE):

Forward transactions are used to coordinate investments and manage risk.

There are two products: energy and transport..

Spot transactions are used to coordinate operating decisions.

All parties actautonomously.

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A two-way Transport product delivers the Energy product.

Electric energy (at a place and time)

Example: Transmission Connected Substation

Transport

Example: Two-way Feeder

Electric energy(at a different

place and same time)

Example: Building

Transactive Tariff: Recover more cost-of-service whentransport is heavily loaded in either direction

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Energy Service Parties automatically control devices/systems, make investments, and manage tenders and transactions.

Management Algorithms(EMS)

Device State

Devices and Systems

Control Signals &

InvestmentsWeather forecasts

Objectives

TE Platforms

Benefit

Tenders

Service Interface

Energy in/out

TransactionsTransactive

Energy Tariff

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Distribution Operators control grid systems, make investments and post forward and spot transport tenders.No energy role.

Planning & Operations

Available Capacity

Substation and Feeders

Control Signals&

Investments

TE Platforms

Service Interface

Feeder Net Energy Flow @ Substation

TransportTendersTransport

Transactions

Net SoldΣ Surplus-

Transactive Transport Tariff

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TE Platforms can be local or wide area.

TEPlatforms


Intermediaries

Transport Services Parties

Neighborhood

Substation

City/Town

Region

Balancing Area

NERC Area

National

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Platforms may be dedicated to classes of transactions and operated by various entities.

TEPlatformsEnergy

ServicesParties

Intermediaries


Yearly, Monthly

Daily

Hourly

5 min, 4 sec

Energy @ Substation

Yearly, Monthly

Daily

Hourly

5 min, 4 sec

Transport to Facility

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Regulators will have new tools to oversee transactions

TEPlatforms


Intermediaries


Regulators:Congress, DOE, EPA, FERC, NERC, Legislatures, PUCs, Munis, CCAs, PMAs, Coops

Tender and Transaction Data Bases

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Retail TE platforms can interface with existing wholesale and distribution platforms.

Consumers, Prosumers, and DERs

Device

Service Interface

DeviceDevice

Retail TE Platforms

EnergyDistribution Transport

Oneyear



One hour Five minuteOne month

wOneyear

One hour Five minuteOne month

Device

Interoperable Transactive Retail Tariffs

Existing Distribution Operators Forwards and

Futures

Existing Wholesale PlatformsBalancingOperators

Wholesale Parties

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Transactive Energy Platforms: host robust cost-of-service, competitive,

and hybrid business and regulatory models.

Transactive Retail Tariffs: forward subscriptions for revenue and bill stability and spot transactions to efficiently

balance variable supply and demand.

Summary: Two Foundations for Sustainable Business and Regulatory Models

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