An Electricity eBay Framework Takes Shape in Europe

The PowerMatchingCity pilot in the city of Groningen in Holland deploys a number of innovations in policy, market models, and technology. One of the most intriguing innovations is their creation of a framework to enable easy communications between energy devices. In the past, energy devices were either producers – like generation plants – or consumers – like a refrigerator. Devices in markets used to be limited to large generation sources that had centralized and predictable characteristics.

The Smart Grid enables the democratization of energy markets for new participants and the vast expansion of energy markets with new devices. Smart Grid technologies enable these changes for distributed energy resources (generation, storage, price-based consumption, and aggregated DR) via distributed intelligence in the grid using both powerline carrier and wireless communications technologies. Communications networks have critical roles in these pilots. Peer-based energy grids require “smart controllers” in all devices that are “enrolled” in the grid that receive realtime and day ahead price signals.

As described in my previous article, the PowerMatchingCity pilot has been focused on building a peer-based or hyperlocal transactive energy grid that accommodates new devices into the energy market. TNO researchers define four types of devices that can participate in peer-based energy grids and markets:

Timeshifters – appliances or equipment that can be operated on a discretionary basis to take advantage of lowest energy prices.
Buffers – devices that can store thermal energy, such as ice-based chillers or hot water heaters that bank energy.
Uncontrolled loads or producers, such as wind and solar generation. (Note – while we cannot control the sources of solar and wind power, we can develop sophisticated models to predict their performance patterns and behaviors.)
Electrical storage in the form of fixed batteries or electric vehicles (EVs).

Classifying all market-participating devices in one of these categories simplifies development of the semantic framework. Such a framework provides context for energy market interactions and the concepts within these interactions. It also helps ensure that all devices are equal in a market, and regardless of wired or wireless communications preference, can participate as defined by their owners

The projected benefits are ambitious: to give consumers maximum choice in device decisions; prevent vendor “lock-ins”; and create an eBay-like energy market. There are benefits for utilities in these pilots too in the forms of reduced grid loads, reduced need for more transmission line investments, and support for virtual power plants (VPPs).

These benefits are not fully appreciated yet in the USA. But the challenges facing construction of high voltage transmission lines (NIMBY, costs, logistics, and project timelines) reduce the odds that large and remote generation will continue to be the only electricity supply chain configuration. Once timelines and costs are fully defined, investments in small-scale, distributed generation in the distribution grid may become more attractive to utilities and to the financial communities that invest in them.

But there are significant challenges with peer-based energy grids that currently remain unanswered. One puzzle is how to tally, audit, summarize, and present the energy exchanges for participating consumers. With the KISS (Keep It Simple, Stupid) principle in mind, will our future energy bills be multiple pages that reflect daily purchases and sales of electricity at variable prices? Will consumers accept and trust additional bill complexity with buy/sell transactions, or do we need to rethink bill presentment? Just as importantly, what market rules will deliver the trust that is keenly important to the success of peer-based energy grids?

Other challenges concern the interoperability standards that will create uniform interfaces for all devices to operate in peer-based energy grids. A new industry alliance called the Flexiblepower Alliance Network (FAN) was announced at the recent Metering/Billing/CRM Europe conference that intends to leverage agreement about semantics to develop open standards and implementation support tools to encourage vendors to incorporate a uniform interface in their devices. The device classification listed above is a good start in that direction.

Image: Electricity via Shutterstock