Holistic Approach for Distributed
Generation, Demand Response &
Dynamic Pricing
by Jeremy Laundergan, Director, Utility
Services Consulting, EnerNex
© 2013 EnerNex. All Rights Reserved. www.enernex.com
Pieces of the Whole
In order to understand the impact of different
technologies, programs, policies and programs, we
separate components of a system into different
parts and quantify them separately.
This simplification has been the tendency when
discussing different aspects of grid modernization
and technology adoption including:
– Distributed Generation;
– Demand Response (DR); and
– Dynamic Pricing.
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Concurrent Operation
 In actual application, these components operate
concurrently and can complement or contradict each
other’s contribution in a variety of ways:
– Photovoltaic (PV) distributed generation for end use customers
may be more attractive with dynamic pricing like Time of Use
(TOU), Peak Time Rebate (PTR), Critical Peak Pricing (CPP) and Real
Time Pricing (RTP)
– The intermittency of PV generation can be partially mitigated by
the utilization of DR where discretionary usage is curtailed with
lower solar output or shifted to align with more abundant solar
yield.
– CPP can be called on a hot day and decrease the overall peak
demand, but the PV generation may exceed expectations resulting
in an overabundance of energy.
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Transactive Energy
 The concept of Transactive Energy recognizes
that generation resources, loads and market
dynamics function most effectively and
efficiently when information facilitates
optimization
 Fundamentally, Transactive Energy recognizes that electricity
demand today is essentially inelastic.
– The price of electricity consumption is known to be relatively constant
by consumers
– Electricity use is not influenced by the actual cost of supply
(generation).
 The reality for both utilities and balancing authorities like ISOs
and RTOs is that the electricity demand by consumers must be
met in near real time by generation resources.
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Transactive Energy Association
Transactive Energy is based on buy and sell transactions
of energy among parties that consume, produce, store,
and transport electric energy.
Engages customers and suppliers in decentralized
markets for energy transactions that strive towards the
three goals of economic efficiency, reliability and
environmental enhancement.
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GridWise Architecture Council
Techniques for managing the generation, consumption
or flow of electric power within an electric power
system through the use of economic or market based
constructs while considering grid reliability constraints
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Assn. for DR and Smart Grid
DR 2.0 A Future of Customer Response
“The ability of flexible distributed energy resources
including responsive demand, onsite generation, energy
storage and electric transportation to provide dynamic
and continuous response based on direct or indirect
value information to the mutual benefit of customers
and a broad range of parties including load serving
entities, services firms, aggregators, grid operators, and
wholesale and local balancing markets through
economic transactions.”
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Systems Approach
Transactive Energy strives for consumers with
distributed energy resources and demand response
capability to interoperate with the broader market to
facilitate informed decisions for the generation and
consumption of electricity.
To reach this long term goal, we must understand the
contributions from each discrete component within a
much larger system.
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Component Variability
 Some of these variables, such as customer demand, can and
do respond to information such as price signals.
 Others are variable but less responsive such as PV output
which is directly related to cloud cover and time of year.
 Challenges
– Quantifying the variable aspects of the system
– Determining whether the variability can be
controlled
 Eventually, the controllable attributes to respond
to the non-responsive elements.
 This requires a holistic systems approach to
understanding the complex variables.
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Conclusion
 Transactive energy will not be achieved overnight
– Likely a 10+ year evolution towards interoperation and
interactive systems within the larger infrastructure
 Technologies are already being deployed that support this
evolution
– Advanced Metering Infrastructure
– Demand Response
– Distributed Generation
– Substation Automation
 Regulatory and market constructs also need to evolve to
support the effective and efficient exchange of information
and capabilities for a more robust and optimized system.
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