My personal view of US energy policy, and how we can better incentivize innovation.
Sustainability Lecture delivered November 25th.
Sustainability Science Centre
The Natural History Museum of Denmark
University of Copenhagen
Universitetsparken 15, Building 3, 3. floor,
DK-2100 Copenhagen, Denmark
How to Troubleshoot Apps for the Modern Connected Worker
Why Do We Ignore Risk in Power Economics?
1. Why Do We Ignore Risk in Power Economics?
University of Copenhagen
Sean P. Meyn
Prabir Barooah, Ana Busic, In-Koo Cho, Anupama Kowli
Matias Negrete-Pincetic, Ehsan Sha
2. eeporfaard, Uday Shanbhag, and Gui Wang
Electrical and Computer Engineering
University of Florida
Thanks to NSF, AFOSR, and DOE / TCIPG
November 25, 2014
3. Why Do We Ignore Risk in Power Economics?
Outline
1 What is the Value of Power?
2 Smart Markets Today
3 Competitive Equilibrium Theory
4 FERC 745: DR for Spinning Reserves
5 FERC 755: AGC from DR
6 Demand Dispatch
7 Conclusions Suggestions
5. What is the Value of Power?
What is the Value of Power?
A short quiz
Wind generation
for one day in the
Pacic Northwest
Price is $20/MWh
8000
6000
4000
2000
0
April 6
MW
1600 MW average output
1 / 47
6. What is the Value of Power?
What is the Value of Power?
A short quiz
Wind generation
for one day in the
Pacic Northwest
Price is $20/MWh
8000
6000
4000
2000
0
April 6
MW
1600 MW average output
Value = 1600 MW x 24 hours x $20/MWh = $768,000 ?
2 / 47
7. What is the Value of Power?
What is the Value of Power?
A short quiz
Zero net power
Price is $20/MWh
800
600
400
200
0
−200
−400
−600
−800
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW
3 / 47
8. What is the Value of Power?
What is the Value of Power?
A short quiz
Zero net power
Price is $20/MWh
800
600
400
200
0
−200
−400
−600
−800
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW
Value = 0 MW x 7 days x $20/MWh = $0 ?
4 / 47
9. What is the Value of Power?
What is the Value of Power?
A short quiz
Zero net power
Price is $20/MWh
Answers to be submitted at the end of lecture
800
600
400
200
0
−200
−400
−600
−800
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW
5 / 47
11. Smart Markets Today
Midwest ISO Today
Typical real-time prices mid-morning in the Midwest
10 April 2013 06:15 10 April 2013 06:20 10 April 2013 07:30
10 April 2013 07:35 10 April 2013 07:50 10 April 2013 08:35
6 / 47
12. Smart Markets Today
Midwest ISO Today
Typical real-time prices mid-morning in the Midwest
10 April 2013 10:15 10 April 2013 10:30 10 April 2013 10:35
10 April 2013 11:30 10 April 2013 11:35 10 April 2013 12:05
7 / 47
13. Smart Markets Today
Midwest ISO Today
Typical real-time prices mid-morning in the Midwest
11 April 2013 07:25 11 April 2013 07:30 11 April 2013 07:35
10 April 2013 09:15 10 April 2013 09:20 10 April 2013 09:25
8 / 47
15. Smart Markets Today
Midwest ISO Today
Prices depend on time, location and context
9 / 47
16. Smart Markets Today
Cold Causes Price Spikes
Texas today: Winter of 2011
3000 $/MWh
Power Prices in Texas
January 31, 2011
$/MWh February 2, 2011
2000
1000
0
5am 10am 3pm 8pm −500
80
60
40
20
10
0
−10
5am 10am 3pm 8pm
10 / 47
17. Smart Markets Today
Cold Causes Price Spikes
Texas today: Winter of 2011
3000 $/MWh
Power Prices in Texas
January 31, 2011
$/MWh February 2, 2011
2000
1000
0
5am 10am 3pm 8pm −500
80
60
40
20
10
0
−10
5am 10am 3pm 8pm
There will be multiple autopsies of the causes for the latest power breakdowns ... Who
pro
18. ted o this near-meltdown and what can be done to incentivize power producers to
maintain adequate reserve capacity for emergencies rather than waiting for emergency
windfalls? { HOUSTON CHRONICLE, Feb 12, 2011
New report hits ERCOT, electricity deregulation: A report released Monday concludes
that electric deregulation has cost Texas residential consumers more than $11 billion in
higher rates... { Dallas Morning News, Feb 14, 2011
10 / 47
19. Smart Markets Today
Cold Causes Price Spikes
Texas today: Winter of 2011
3000 $/MWh
Power Prices in Texas
January 31, 2011
$/MWh February 2, 2011
2000
1000
0
5am 10am 3pm 8pm −500
80
60
40
20
10
0
−10
5am 10am 3pm 8pm
Proposed Remedy Public Utility Commission of Texas (PUCT)
... considering raising oer caps to as high as $9,000/MWh,
among other measures. [Brattle Group, June 1 2012]
10 / 47
20. Smart Markets Today
Cold Causes Price Spikes
Texas today: Winter of 2011
3000 $/MWh
Power Prices in Texas
January 31, 2011
$/MWh February 2, 2011
2000
1000
0
5am 10am 3pm 8pm −500
80
60
40
20
10
0
−10
5am 10am 3pm 8pm
Proposed Remedy Public Utility Commission of Texas (PUCT)
... considering raising oer caps to as high as $9,000/MWh,
among other measures. [Brattle Group, June 1 2012]
Ecient Outcome! October 25, 2012: The Public Utility Commission of Texas has
approved a series of increases in the ERCOT high system-wide oer cap (HCAP)
starting June 1, 2013, with the cap eventually reaching $9,000/MWh.
10 / 47
21. Smart Markets Today
Day-Ahead Market Outcomes
Texas today: Summer of 2011
ERCOT North Zone - August 1-30, 2011
Hourly day-ahead, daily on-peak, and monthly weighted average prices
3,000
2,500
2,000
1,500
1,000
500
0
wholesale price ($/MWh)
hourly, day-ahead price
daily, on-peak price
weighted average monthly
price ($188/MWh)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Source: U.S. Energy Information Administration, based on the Electric Reliability Council of Texas (ERCOT).
Note: ERCOT North Zone includes Dallas/Fort Worth metro region and surrounding areas of Northeast Texas. On-Peak refers
to the 16-hour time block from hours ending 7:00 a.m. to 10:00 p.m. CDT on weekdays, excluding NERC holidays.
Source: U.S. Energy Information Administration, based on the Electric Reliability Council of Texas (ERCOT).
Note: ERCOT North Zone includes Dallas/Fort Worth metro region and surrounding areas of Northeast Texas. On-Peak
refers to the 16-hour time block from hours ending 7:00 a.m. to 10:00 p.m. CDT on weekdays, excluding NERC holidays
11 / 47
22. Smart Markets Today
Ordinary Day { Price Spikes
Texas today: As I prepare this lecture, 2014
12 / 47
23. Smart Markets Today
Madness in New Zealand
New Zealand today: March 25, 2011
A typical day in the New Zealand power market on the N. Island
Otahuhu
Stratford
http://www.electricityinfo.co.nz/
Nodal Power Prices in NZ: $/MWh
100
50
0
4am 9am 2pm 7pm
13 / 47
24. Smart Markets Today
Madness in New Zealand
New Zealand today: March 26, 2011
$25 million dollars extracted by the generators in just six hours
Otahuhu
Stratford
Nodal Power Prices in NZ: $/MWh
4am 9am 2pm 7pm http://www.electricityinfo.co.nz/
20,000
10,000
0
14 / 47
25. Smart Markets Today
Madness in New Zealand
New Zealand today: March 26, 2011
$20 million dollars demanded back from Genesis
Otahuhu
Stratford
Nodal Power Prices in NZ: $/MWh
4am 9am 2pm 7pm http://www.electricityinfo.co.nz/
20,000
10,000
0
Preliminary view of NZ Electrical Authority: Genesis was not guilty of
manipulative ... or deceptive conduct. However, high prices threatened to
14 / 47
26. Smart Markets Today
Madness in New Zealand
New Zealand today: March 26, 2011
$20 million dollars demanded back from Genesis
Otahuhu
Stratford
Nodal Power Prices in NZ: $/MWh
4am 9am 2pm 7pm http://www.electricityinfo.co.nz/
20,000
10,000
0
Preliminary view of NZ Electrical Authority: Genesis was not guilty of
manipulative ... or deceptive conduct. However, high prices threatened to
undermine con
27. dence in, and ... damage the integrity and reputation of the
wholesale electricity market 3:59 PM Friday May 6, 2011 www.nzherald.co.nz
14 / 47
29. Competitive Equilibrium Theory
Equilibrium with Dynamics Network Constraints
Entropic prices
Theorem 1: When dynamics (temporal constraints) are taken into
account, price is never equal to marginal cost [4, 3, 2, 1]
15 / 47
30. Competitive Equilibrium Theory
Equilibrium with Dynamics Network Constraints
Entropic prices
Theorem 1: When dynamics (temporal constraints) are taken into
account, price is never equal to marginal cost [4, 3, 2, 1]
Equilibrium price
The equilibrium price process is a function of equilibrium reserves:
P(t) = p(Re(t))
The marginal value of power to the consumer.
15 / 47
31. Competitive Equilibrium Theory
Equilibrium with Dynamics Network Constraints
Entropic prices
Theorem 1: When dynamics (temporal constraints) are taken into
account, price is never equal to marginal cost [4, 3, 2, 1]
Equilibrium price
The equilibrium price process is a function of equilibrium reserves:
P(t) = p(Re(t))
The marginal value of power to the consumer.
Proof: Lagrangian decomposition,
as in the static Second Welfare Theorem
15 / 47
32. Competitive Equilibrium Theory
Equilibrium with Dynamics Network Constraints
Entropic prices
What is marginal value?
It is not always obvious. With the introduction of network constraints,
16 / 47
33. Competitive Equilibrium Theory
Equilibrium with Dynamics Network Constraints
Entropic prices
What is marginal value?
It is not always obvious. With the introduction of network constraints,
Prices can go well beyond choke-up price (as de
34. ned in static model)
Prices can go well below zero
[Dynamic competitive equilibria in electricity markets. Wang et. al. 2011]
16 / 47
35. Competitive Equilibrium Theory
Equilibrium with Dynamics Network Constraints
Entropic prices
What is marginal value?
It is not always obvious. With the introduction of network constraints,
Prices can go well beyond choke-up price (as de
36. ned in static model)
Prices can go well below zero
[Dynamic competitive equilibria in electricity markets. Wang et. al. 2011]
Without price-caps, Australia might look like an ecient equilibrium:
Price (Aus $/MWh)
Volume (MW)
Price (Aus $/MWh)
Volume (MW)
Demand
Demand
Prices
Prices
24:00
23:00
22:00
21:00
20:00
19:00
18:00
17:00
16:00
15:00
14:00
13:00
12:00
11:00
10:00
09:00
08:00
07:00
06:00
05:00
04:00
03:00
02:00
01:00
00:00
24:00
23:00
22:00
21:00
20:00
19:00
18:00
17:00
16:00
15:00
14:00
13:00
12:00
11:00
10:00
09:00
08:00
07:00
06:00
05:00
04:00
03:00
02:00
01:00
00:00
Victoria Tasmania
10,000
1,400
19,000
1,000
1,200
1,000
800
600
400
- 1,000
200
- 1,500
0
0
1,000
- 1,000
9,000
8,000
10,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
16 / 47
37. Competitive Equilibrium Theory
Sustainable business?
Marginal value of electricity,
$250,000/MWh (?)
Illinois: July 1998 California: July 2000
Purchase Price $/MWh
Previous week
Spinning reserve prices PX prices $/MWh
250
200
150
100
50
0
70
60
50
40
30
20
10
Texas: February 2, 2011
Ontario: November, 2005
5000
4000
3000
2000
1000
0
Mon Tues Weds Thurs Fri Weds Thurs Fri Sat Sun Mon Tues Weds
Demand in MW Last Updated 11:00 AM Predispatch 1975.11 Dispatch 19683.5
Hourly Ontario Energy Price $/MWh Last Updated 11:00 AM Predispatch 72.79 Dispatch 90.82 2000
3 6 9 12 15 18 21 3 6 9 12 15 18 21 3 6 9 12 15 18 21 Time
Tues Weds Thurs
21000
18000
15000
1500
1000
500
0
Forecast Prices Forecast Demand
3000
2000
1000
0
$/MWh
Average price
is usually $30
5am 10am 3pm 8pm −500
$/MWh
17 / 47
38. Competitive Equilibrium Theory
Sustainable business?
Marginal value of electricity,
$250,000/MWh (?)
Illinois: July 1998 California: July 2000
Purchase Price $/MWh
Previous week
Spinning reserve prices PX prices $/MWh
250
200
150
100
50
0
70
60
50
40
30
20
10
Texas: February 2, 2011
Ontario: November, 2005
5000
4000
3000
2000
1000
0
Mon Tues Weds Thurs Fri Weds Thurs Fri Sat Sun Mon Tues Weds
Demand in MW Last Updated 11:00 AM Predispatch 1975.11 Dispatch 19683.5
Hourly Ontario Energy Price $/MWh Last Updated 11:00 AM Predispatch 72.79 Dispatch 90.82 2000
3 6 9 12 15 18 21 3 6 9 12 15 18 21 3 6 9 12 15 18 21 Time
Tues Weds Thurs
21000
18000
15000
1500
1000
500
0
Forecast Prices Forecast Demand
3000
2000
1000
0
$/MWh
Average price
is usually $30
5am 10am 3pm 8pm −500
$/MWh
However,
17 / 47
39. Competitive Equilibrium Theory
Sustainable business?
Marginal value of electricity,
$250,000/MWh (?)
Illinois: July 1998 California: July 2000
Purchase Price $/MWh
Previous week
Spinning reserve prices PX prices $/MWh
250
200
150
100
50
0
70
60
50
40
30
20
10
Texas: February 2, 2011
Ontario: November, 2005
5000
4000
3000
2000
1000
0
Mon Tues Weds Thurs Fri Weds Thurs Fri Sat Sun Mon Tues Weds
Demand in MW Last Updated 11:00 AM Predispatch 1975.11 Dispatch 19683.5
Hourly Ontario Energy Price $/MWh Last Updated 11:00 AM Predispatch 72.79 Dispatch 90.82 2000
3 6 9 12 15 18 21 3 6 9 12 15 18 21 3 6 9 12 15 18 21 Time
Tues Weds Thurs
21000
18000
15000
1500
1000
500
0
Forecast Prices Forecast Demand
3000
2000
1000
0
$/MWh
Average price
is usually $30
5am 10am 3pm 8pm −500
$/MWh
However,
Theorem 2: In this equilibrium, the average price is
precisely the average marginal cost
Proof: Lagrangian relaxation of initial condition.
17 / 47
40. Competitive Equilibrium Theory
Sustainable business?
Marginal value of electricity,
$250,000/MWh (?)
Illinois: July 1998 California: July 2000
Purchase Price $/MWh
Previous week
Spinning reserve prices PX prices $/MWh
250
200
150
100
50
0
70
60
50
40
30
20
10
Texas: February 2, 2011
Ontario: November, 2005
5000
4000
3000
2000
1000
0
Mon Tues Weds Thurs Fri Weds Thurs Fri Sat Sun Mon Tues Weds
Demand in MW Last Updated 11:00 AM Predispatch 1975.11 Dispatch 19683.5
Hourly Ontario Energy Price $/MWh Last Updated 11:00 AM Predispatch 72.79 Dispatch 90.82 2000
3 6 9 12 15 18 21 3 6 9 12 15 18 21 3 6 9 12 15 18 21 Time
Tues Weds Thurs
21000
18000
15000
1500
1000
500
0
Forecast Prices Forecast Demand
3000
2000
1000
0
$/MWh
Average price
is usually $30
5am 10am 3pm 8pm −500
$/MWh
However,
Theorem 2: In this equilibrium, the average price is
precisely the average marginal cost
Proof: Lagrangian relaxation of initial condition.
Is this a sustainable business?
17 / 47
41. Competitive Equilibrium Theory
Little Incentive for Regulation
Figure 3 Average 2012 daily ve-minute and hour-ahead prices are more volatile than the day-ahead price pattern
B. Kirby, The Value of Flexible Generation, 2013
18 / 47
42. Competitive Equilibrium Theory
Little Incentive for Regulation
Figure 3 Average 2012 daily ve-minute and hour-ahead prices are more volatile than the day-ahead price pattern
B. Kirby, The Value of Flexible Generation, 2013
Average prices in the real-time market nearly equal day-ahead prices.
18 / 47
43. Competitive Equilibrium Theory
Little Incentive for Regulation
Figure 3 Average 2012 daily ve-minute and hour-ahead prices are more volatile than the day-ahead price pattern
B. Kirby, The Value of Flexible Generation, 2013
Average prices in the real-time market nearly equal day-ahead prices.
RTM6= Regulation, but similar
18 / 47
44. Contour Map: Real Time Market - Locational Marginal Pricing Help?
$10/MWh
Nirvana @ ERCOT
FERC 745: DR for Spinning Reserves
45. FERC 745: DR for Spinning Reserves
Origin of FERC 745 { Incentives for Demand Response
EnerNOC's plea: (amongst others)
... demand response resources simply cannot be procured because they do
not yet exist as resources. Such investment will not occur so long as
compensation undervalues demand response resources.
19 / 47
46. FERC 745: DR for Spinning Reserves
Origin of FERC 745 { Incentives for Demand Response
EnerNOC's plea: (amongst others)
... demand response resources simply cannot be procured because they do
not yet exist as resources. Such investment will not occur so long as
compensation undervalues demand response resources.
FERC's Decision: The Commission concludes that paying LMP can
address the identi
47. ed barriers to potential demand response providers.
19 / 47
48. FERC 745: DR for Spinning Reserves
Origin of FERC 745 { Incentives for Demand Response
EnerNOC's plea: (amongst others)
... demand response resources simply cannot be procured because they do
not yet exist as resources. Such investment will not occur so long as
compensation undervalues demand response resources.
FERC's Decision: The Commission concludes that paying LMP can
address the identi
49. ed barriers to potential demand response providers.
FERC 745 is Born!
134 FERC {61,187
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
18 CFR Part 35
[Docket No. RM10-17-000; Order No. 745]
Demand Response Compensation in Organized Wholesale Energy Markets
(Issued March 15, 2011)
19 / 47
50. FERC 745: DR for Spinning Reserves
Origin of FERC 745 { Incentives for Demand Response
EnerNOC's plea: (amongst others)
... demand response resources simply cannot be procured because they do
not yet exist as resources. Such investment will not occur so long as
compensation undervalues demand response resources.
FERC's Decision: The Commission concludes that paying LMP can
address the identi
51. ed barriers to potential demand response providers.
FERC 745 is Born!
134 FERC {61,187
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
18 CFR Part 35
[Docket No. RM10-17-000; Order No. 745]
Demand Response Compensation in Organized Wholesale Energy Markets
(Issued March 15, 2011)
The outcome?
19 / 47
52. FERC 745: DR for Spinning Reserves
FERC 745 Is Dead!
20 / 47
53. FERC 745: DR for Spinning Reserves
FERC 745 Is Dead!
Conjecture: It had to die.
20 / 47
54. FERC 745: DR for Spinning Reserves
FERC 745 Is Dead!
Conjecture: It had to die.
FERC 745 Nirvana:
Peaks shaved!
20 / 47
55. FERC 745: DR for Spinning Reserves
FERC 745 Is Dead!
Conjecture: It had to die.
FERC 745 Nirvana:
Peaks shaved!
Contingencies resolved in seconds!!
Prices smoothed to Marginal Cost!
20 / 47
56. FERC 745: DR for Spinning Reserves
FERC 745 Is Dead!
Conjecture: It had to die.
FERC 745 Nirvana:
Peaks shaved!
Contingencies resolved in seconds!!
Prices smoothed to Marginal Cost!
Contour Map: Real Time Market - Locational Marginal Pricing Help?
$10/MWh
Nirvana @ ERCOT
20 / 47
57. FERC 745: DR for Spinning Reserves
FERC 745 Is Dead!
Conjecture: It had to die.
FERC 745 Nirvana:
Peaks shaved!
Contingencies resolved in seconds!!
Prices smoothed to Marginal Cost!
Contour Map: Real Time Market - Locational Marginal Pricing Help?
$10/MWh
Nirvana @ ERCOT
The problem: In this market, there is no opportunity without crisis
20 / 47
58. FERC 745: DR for Spinning Reserves
FERC 745 Is Dead!
Conjecture: It had to die.
FERC 745 Nirvana:
Peaks shaved!
Contingencies resolved in seconds!!
Prices smoothed to Marginal Cost!
Contour Map: Real Time Market - Locational Marginal Pricing Help?
$10/MWh
Nirvana @ ERCOT
The problem: In this market, there is no opportunity without crisis
The paradox: In this nirvana,
there is no business case for demand response
20 / 47
59. SEPTEMBER 2012 OCTOBER 2012
$38.75
MWh
PJM coordinates frequency regulation through two dierent control signals:
RegD - fast moving dynamic regulation (e.g. batteries, ywheels)
RegA - traditional regulation resources (e.g. gas turbine)
PJM introduces a second, fast
moving regulation signal (RegD)
Regulation requirements
reduced by 22%
Further reductions
since then - now 30%
PAY FOR PERFORMANCE IMPLEMENTED
$13.75
MWh
MARKET CLEARING PRICES
DYNAMIC FAST RESPONDING RESOURCES (REGD) REGULATION REQUIREMENTS (MW)
OCTOBER 2013
OCTOBER 2012
FERC 755: AGC from DR
60. FERC 755: AGC from DR
FERC Order 755
Pay-for-Performance
October 20, 2011: New rules for compensating frequency regulation
resources:
FERC 755 required ISO/RTOs to pay regulation resources based on
actual amount of regulation service provided (speed and accuracy).
21 / 47
61. FERC 755: AGC from DR
FERC Order 755
Pay-for-Performance
October 20, 2011: New rules for compensating frequency regulation
resources:
FERC 755 required ISO/RTOs to pay regulation resources based on
actual amount of regulation service provided (speed and accuracy).
FERC's motivation:
Current compensation for frequency regulation is unjust...
Increasing need for frequency regulation service
21 / 47
62. FERC 755: AGC from DR
FERC Order 755
Pay-for-Performance
October 20, 2011: New rules for compensating frequency regulation
resources:
FERC 755 required ISO/RTOs to pay regulation resources based on
actual amount of regulation service provided (speed and accuracy).
FERC's motivation:
Current compensation for frequency regulation is unjust...
Increasing need for frequency regulation service
... allowing the market to establish the compensation for resources'
performance will allow more economically ecient outcomes and
create appropriate incentives ...
21 / 47
63. FERC 755: AGC from DR
FERC Order 755
Pay-for-Performance
Time
Regulation Required @ MISO
600
400
200
0
-200
-400
Two part settlement:
1 A uniform price for frequency regulation capacity paid to all cleared
resources
2 Performance payment for the provision of frequency regulation
service, with the latter payment re
ecting a resource's accuracy of
performance.
22 / 47
64. FERC 755: AGC from DR
FERC Order 755
Pay-for-Performance
Time
Regulation Required @ MISO
600
400
200
0
-200
-400
Two part settlement:
1 A uniform price for frequency regulation capacity paid to all cleared
resources
2 Performance payment for the provision of frequency regulation
service, with the latter payment re
ecting a resource's accuracy of
performance.
Performance?
22 / 47
65. FERC 755: AGC from DR
FERC Order 755
Pay-for-Performance
Time
Regulation Required @ MISO
600
400
200
0
-200
-400
Two part settlement:
1 A uniform price for frequency regulation capacity paid to all cleared
resources
2 Performance payment for the provision of frequency regulation
service, with the latter payment re
ecting a resource's accuracy of
performance.
Performance? Now interpreted as mileage:
Payment /
Z T
0
68. FERC 755: AGC from DR
FERC Order 755
Pay-for-Performance
Time
Regulation Required @ MISO
600
400
200
0
-200
-400
Two part settlement:
1 A uniform price for frequency regulation capacity paid to all cleared
resources
2 Performance payment for the provision of frequency regulation
service, with the latter payment re
ecting a resource's accuracy of
performance.
Performance? Now interpreted as mileage:
Payment /
Z T
0
69.
70. d
dt
G(t)j dt (or discrete-time equivalent)
Is this nuts?
22 / 47
71. FERC 755: AGC from DR
FERC Order 755
Pay-for-Performance
Time
Regulation Required @ MISO
600
400
200
0
-200
-400
Two part settlement:
1 A uniform price for frequency regulation capacity paid to all cleared
resources
2 Performance payment for the provision of frequency regulation
service, with the latter payment re
ecting a resource's accuracy of
performance.
Performance? Now interpreted as mileage:
Payment /
Z T
0
72.
73. d
dt
G(t)j dt (or discrete-time equivalent)
Is this nuts?
Let's have a closer look ...
22 / 47
74. FERC 755: AGC from DR
FERC Order 755
Pay-for-Performance { Yes, this is a bit looney
How many 1MWh batteries are needed to track this signal?
A
0
-A
Power output of battery
1
4
2
4
3
4
1
Charging Dis-charging
t
D(t) = Asin(2t) MW
(hours)
23 / 47
75. FERC 755: AGC from DR
A
FERC Order 755
0
Pay-for-Performance { Yes, this is a bit looney
-A
Power output of battery
1
4
2
4
3
4
1
Charging Dis-charging
t
D(t) = Asin(2t) MW
(hours)
How many 1MWh batteries are needed to track this signal?
Homework: # batteries
A
!
23 / 47
76. FERC 755: AGC from DR
A
FERC Order 755
0
Pay-for-Performance { Yes, this is a bit looney
-A
Power output of battery
1
4
2
4
3
4
1
Charging Dis-charging
t
D(t) = Asin(2t) MW
(hours)
How many 1MWh batteries are needed to track this signal?
Homework: # batteries
A
!
What is the mileage?
23 / 47
77. FERC 755: AGC from DR
A
FERC Order 755
0
Pay-for-Performance { Yes, this is a bit looney
-A
Power output of battery
1
4
2
4
3
4
1
Charging Dis-charging
t
D(t) = Asin(2t) MW
(hours)
How many 1MWh batteries are needed to track this signal?
Homework: # batteries
A
!
What is the mileage? Start with a small segment,
Z T0
0
80. FERC 755: AGC from DR
A
FERC Order 755
0
Pay-for-Performance { Yes, this is a bit looney
-A
Power output of battery
1
4
2
4
3
4
1
Charging Dis-charging
t
D(t) = Asin(2t) MW
(hours)
How many 1MWh batteries are needed to track this signal?
Homework: # batteries
A
!
What is the mileage? Start with a small segment,
Z T0
0
85. FERC 755: AGC from DR
A
FERC Order 755
0
Pay-for-Performance { Yes, this is a bit looney
-A
Power output of battery
1
4
2
4
3
4
1
Charging Dis-charging
t
D(t) = Asin(2t) MW
(hours)
How many 1MWh batteries are needed to track this signal?
Homework: # batteries
A
!
What is the mileage? Start with a small segment,
Z T0
0
89. d
dt
G(t)j dt ?; T arbitrary
Work it out!
23 / 47
90. FERC 755: AGC from DR
A
FERC Order 755
0
Pay-for-Performance { Yes, this is a bit looney
-A
Power output of battery
1
4
2
4
3
4
1
Charging Dis-charging
t
D(t) = Asin(2t) MW
(hours)
How many 1MWh batteries are needed to track this signal?
Homework: # batteries
A
!
What is the mileage? Start with a small segment,
Z T0
0
94. d
dt
G(t)j dt 4!TA; T arbitrary
looney?
23 / 47
95. FERC 755: AGC from DR
FERC Order 755
Pay-for-Performance { and, a bit ingenious
PJM's Conclusions in 2013
PJM lowered its Regulation Requirement1:
# 22%, starting October 2012
# 26%, starting November 2012
# 30%, starting December 2012
1As percent of the peak/valley load forecast; all relative to September, 2012
24 / 47
96. FERC 755: AGC from DR
FERC Order 755
Pay-for-Performance { and, a bit ingenious
PJM's Conclusions in 2013
PJM lowered its Regulation Requirement1:
# 22%, starting October 2012
# 26%, starting November 2012
# 30%, starting December 2012
No negative impact on reliability
1As percent of the peak/valley load forecast; all relative to September, 2012
24 / 47
97. FERC 755: AGC from DR
FERC Order 755
PJM discovers bit of lunacy
SEPTEMBER 2012 OCTOBER 2012
$38.75
MWh
PJM coordinates frequency regulation through two dierent control signals:
RegD - fast moving dynamic regulation (e.g. batteries, ywheels)
RegA - traditional regulation resources (e.g. gas turbine)
PJM introduces a second, fast
moving regulation signal (RegD)
Regulation requirements
reduced by 22%
Further reductions
since then - now 30%
PAY FOR PERFORMANCE IMPLEMENTED
$13.75
MWh
MARKET CLEARING PRICES
DYNAMIC FAST RESPONDING RESOURCES (REGD) REGULATION REQUIREMENTS (MW)
OCTOBER 2013
OCTOBER 2012
Payments triple!
25 / 47
98. FERC 755: AGC from DR
FERC Order 755
PJM discovers bit of lunacy
SEPTEMBER 2012 OCTOBER 2012
$38.75
MWh
PJM coordinates frequency regulation through two dierent control signals:
RegD - fast moving dynamic regulation (e.g. batteries, ywheels)
RegA - traditional regulation resources (e.g. gas turbine)
PJM introduces a second, fast
moving regulation signal (RegD)
Regulation requirements
reduced by 22%
Further reductions
since then - now 30%
PAY FOR PERFORMANCE IMPLEMENTED
$13.75
MWh
MARKET CLEARING PRICES
DYNAMIC FAST RESPONDING RESOURCES (REGD) REGULATION REQUIREMENTS (MW)
OCTOBER 2013
OCTOBER 2012
Payments triple!
Good for the
ywheel companies, but...
25 / 47
99. FERC 755: AGC from DR
FERC Order 755
PJM discovers bit of lunacy
SEPTEMBER 2012 OCTOBER 2012
$38.75
MWh
PJM coordinates frequency regulation through two dierent control signals:
RegD - fast moving dynamic regulation (e.g. batteries, ywheels)
RegA - traditional regulation resources (e.g. gas turbine)
PJM introduces a second, fast
moving regulation signal (RegD)
Regulation requirements
reduced by 22%
Further reductions
since then - now 30%
PAY FOR PERFORMANCE IMPLEMENTED
$13.75
MWh
MARKET CLEARING PRICES
DYNAMIC FAST RESPONDING RESOURCES (REGD) REGULATION REQUIREMENTS (MW)
OCTOBER 2013
OCTOBER 2012
Payments triple!
Good for the
ywheel companies, but...
PJM's
100. nding: All resources, even those
with fair performance, will have an
incentive to follow the fast moving RegD
signal even if the unit is only capable of
following at 50% because their
compensation on average will be
multiplied 3 times or more.
Performance Based Regulation: Year One Analysis
Regulation Performance Senior Task Force PJM
Interconnection. Oct. 12, 2013
25 / 47
101. FERC 755: AGC from DR
FERC Order 755
PJM discovers bit of lunacy
SEPTEMBER 2012 OCTOBER 2012
$38.75
MWh
PJM coordinates frequency regulation through two dierent control signals:
RegD - fast moving dynamic regulation (e.g. batteries, ywheels)
RegA - traditional regulation resources (e.g. gas turbine)
PJM introduces a second, fast
moving regulation signal (RegD)
Regulation requirements
reduced by 22%
Further reductions
since then - now 30%
PAY FOR PERFORMANCE IMPLEMENTED
$13.75
MWh
MARKET CLEARING PRICES
DYNAMIC FAST RESPONDING RESOURCES (REGD) REGULATION REQUIREMENTS (MW)
OCTOBER 2013
OCTOBER 2012
Payments triple!
Good for the
ywheel companies, but...
PJM's
102. nding: All resources, even those
with fair performance, will have an
incentive to follow the fast moving RegD
signal even if the unit is only capable of
following at 50% because their
compensation on average will be
multiplied 3 times or more.
Performance Based Regulation: Year One Analysis
Regulation Performance Senior Task Force PJM
Interconnection. Oct. 12, 2013
Hence, more FERC orders
25 / 47
104. Demand Dispatch
Buildings as Batteries
HVAC
exibility to provide additional ancillary service
Buildings consume 70% of electricity in the US
HVAC contributes to 40% of the consumption.
26 / 47
105. Demand Dispatch
Buildings as Batteries
HVAC
exibility to provide additional ancillary service
Buildings consume 70% of electricity in the US
HVAC contributes to 40% of the consumption.
Buildings have large thermal capacity
26 / 47
106. Demand Dispatch
Buildings as Batteries
HVAC
exibility to provide additional ancillary service
Buildings consume 70% of electricity in the US
HVAC contributes to 40% of the consumption.
Buildings have large thermal capacity
Modern buildings have fast-responding equipment:
VFDs (variable frequency drive)
26 / 47
107. Demand Dispatch
Buildings as Batteries
HVAC
exibility to provide additional ancillary service
Buildings consume 70% of electricity in the US
HVAC contributes to 40% of the consumption.
Buildings have large thermal capacity
Modern buildings have fast-responding equipment:
VFDs (variable frequency drive)
26 / 47
108. Demand Dispatch
Buildings as Batteries
Tracking RegD at Pugh Hall | ignore the measurement noise
In one sentence:
27 / 47
109. Demand Dispatch
Buildings as Batteries
Tracking RegD at Pugh Hall | ignore the measurement noise
In one sentence: Ramp up and down power consumption, just 10%, to
track regulation signal.
27 / 47
110. Demand Dispatch
Buildings as Batteries
Tracking RegD at Pugh Hall | ignore the measurement noise
In one sentence: Ramp up and down power consumption, just 10%, to
track regulation signal.
Result:
27 / 47
111. Demand Dispatch
Buildings as Batteries
Tracking RegD at Pugh Hall | ignore the measurement noise
In one sentence: Ramp up and down power consumption, just 10%, to
track regulation signal.
Result:
PJM RegD Measured
Power
(kW)
1
0
-1
0 10 20 30 40
Time (minute)
27 / 47
112. Demand Dispatch
Pugh Hall @ UF
How much?
4
2
0
−2
−4
10
0
−10
0.2
0
−0.20 500 1000 1500 2000 2500 3000 3500
Time (s)
Fan Power Deviation (kW)
Regulation Signal (kW)
Input (%)
Temperature Deviation (C)
. One AHU fan with 25 kW motor:
3 kW of regulation reserve
. Pugh Hall (40k sq ft, 3 AHUs):
10 kW
Indoor air quality is not aected
28 / 47
113. Demand Dispatch
Pugh Hall @ UF
How much?
4
2
0
−2
−4
10
0
−10
0.2
0
−0.20 500 1000 1500 2000 2500 3000 3500
Time (s)
Fan Power Deviation (kW)
Regulation Signal (kW)
Input (%)
Temperature Deviation (C)
. One AHU fan with 25 kW motor:
3 kW of regulation reserve
. Pugh Hall (40k sq ft, 3 AHUs):
10 kW
Indoor air quality is not aected
. 100 buildings:
1 MW
28 / 47
114. Demand Dispatch
Pugh Hall @ UF
How much?
4
2
0
−2
−4
10
0
−10
0.2
0
−0.20 500 1000 1500 2000 2500 3000 3500
Time (s)
Fan Power Deviation (kW)
Regulation Signal (kW)
Input (%)
Temperature Deviation (C)
. One AHU fan with 25 kW motor:
3 kW of regulation reserve
. Pugh Hall (40k sq ft, 3 AHUs):
10 kW
Indoor air quality is not aected
. 100 buildings:
1 MW
That's just using the fans!
28 / 47
116. Demand Dispatch
Buildings as Batteries
What do you think?
Questions:
Capacity? Tens of Gigawatts from commercial buildings
29 / 47
117. Demand Dispatch
Buildings as Batteries
What do you think?
Questions:
Capacity? Tens of Gigawatts from commercial buildings
Can we obtain a resource as eective as today's spinning reserves?
29 / 47
118. Demand Dispatch
Buildings as Batteries
What do you think?
Questions:
Capacity? Tens of Gigawatts from commercial buildings
Can we obtain a resource as eective as today's spinning reserves?
Yes!! Buildings are well-suited to balancing reserves,
and other high-frequency regulation resources
29 / 47
119. Demand Dispatch
Buildings as Batteries
What do you think?
Questions:
Capacity? Tens of Gigawatts from commercial buildings
Can we obtain a resource as eective as today's spinning reserves?
Yes!! Buildings are well-suited to balancing reserves,
and other high-frequency regulation resources
Secondary control following a contingency?
This remains an open question.
29 / 47
120. Demand Dispatch
Buildings as Batteries
What do you think?
Questions:
Capacity? Tens of Gigawatts from commercial buildings
Can we obtain a resource as eective as today's spinning reserves?
Yes!! Buildings are well-suited to balancing reserves,
and other high-frequency regulation resources
Secondary control following a contingency?
This remains an open question.
How to compute baselines?
29 / 47
121. Demand Dispatch
Buildings as Batteries
What do you think?
Questions:
Capacity? Tens of Gigawatts from commercial buildings
Can we obtain a resource as eective as today's spinning reserves?
Yes!! Buildings are well-suited to balancing reserves,
and other high-frequency regulation resources
Secondary control following a contingency?
This remains an open question.
How to compute baselines?
Who cares? The utility or aggregator is responsible for the equipment {
the consumer cannot `play games' in a real time market!
29 / 47
122. Demand Dispatch
Buildings as Batteries
What do you think?
Questions:
Capacity? Tens of Gigawatts from commercial buildings
Can we obtain a resource as eective as today's spinning reserves?
Yes!! Buildings are well-suited to balancing reserves,
and other high-frequency regulation resources
Secondary control following a contingency?
This remains an open question.
How to compute baselines?
Who cares? The utility or aggregator is responsible for the equipment {
the consumer cannot `play games' in a real time market!
What open issues do you see?
29 / 47
123. Demand Dispatch
One Million Pools in Florida
For ancillary service on a slower time-scale
600
400
200
0
−200
−400
−600
Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7
MW
30 / 47
124. Demand Dispatch
One Million Pools in Florida
For ancillary service on a slower time-scale
600
400
200
0
−200
−400
−600
Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7
MW
... and many other on/o loads
30 / 47
126. Conclusions Suggestions
What is the Value of Power?
Answers to Quiz #1
Wind generation
for one day in the
Pacic Northwest
Price is $20/MWh
8000
6000
4000
2000
0
April 6
MW
1600 MW average output
Value = 1600 MW x 24 hours x $20/MWh = $768,000 ?
31 / 47
127. Conclusions Suggestions
What is the Value of Power?
Answers to Quiz #1 Wind generation
for one day in the
Pacic Northwest
Price is $20/MWh
8000
6000
4000
2000
0
April 6
MW
1600 MW average output
Value = 1600 MW x 24 hours x $20/MWh = $768,000 ?
Answer: Correct!
Electrons are electrons, so add them up, and put them on the market!
32 / 47
128. Conclusions Suggestions
What is the Value of Power?
Answers to Quiz #1 Wind generation
for one day in the
Pacic Northwest
Price is $20/MWh
8000
6000
4000
2000
0
April 6
MW
1600 MW average output
Value = 1600 MW x 24 hours x $20/MWh = $768,000 ?
Answer: False!!
Spring 2012 report from this region:
Annual expected value of oversupply costs estimated at $12 million per
year, with 300,000 MWh of wind curtailment
www.nwcouncil.org/media/11074/2012 1212SupplementalReport.pdf
32 / 47
129. Conclusions Suggestions
What is the Value of Power?
Answers to Quiz #1 Wind generation
for one day in the
Pacic Northwest
Price is $20/MWh
8000
6000
4000
2000
0
April 6
MW
1600 MW average output
Value = 1600 MW x 24 hours x $20/MWh = $768,000 ?
Answer: False!!
Spring 2012 report from this region:
Annual expected value of oversupply costs estimated at $12 million per
year, with 300,000 MWh of wind curtailment
The
130. rst answer would be correct if we had
infrastructure in place to mitigate volatility
www.nwcouncil.org/media/11074/2012 1212SupplementalReport.pdf
32 / 47
131. Conclusions Suggestions
What is the Value of Power?
Answers to Quiz #2
Zero net power
Price is $20/MWh
800
600
400
200
0
−200
−400
−600
−800
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW
Value = 0 MW x 7 days x $20/MWh = $0 ?
33 / 47
132. Conclusions Suggestions
What is the Value of Power?
Answers to Quiz #2 Zero net power
Price is $20/MWh
800
600
400
200
0
−200
−400
−600
−800
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW
Value = 0 MW x 7 days x $20/MWh = $0 ?
Answer: Correct!
The total power is zero, and the 800 MW perturbation is
inconsequential given the 8000 MW load
34 / 47
133. Conclusions Suggestions
What is the Value of Power?
Answers to Quiz #2 Zero net power
Price is $20/MWh
800
600
400
200
0
−200
−400
−600
−800
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW
Value = 0 MW x 7 days x $20/MWh = $0 ?
Answer: False!
Disturbance to the grid is costly, the actual value is $500,000 (guess)
34 / 47
134. Conclusions Suggestions
What is the Value of Power?
Answers to Quiz #2 Zero net power
Price is $20/MWh
800
600
400
200
0
−200
−400
−600
−800
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW
Value = 0 MW x 7 days x $20/MWh = $0 ?
Answer: False!
Disturbance to the grid is costly, the actual value is $500,000 (guess)
Answer: False!!
This is the BPA regulation signal! The actual value is ...
34 / 47
135. Conclusions Suggestions
What is the Value of Power?
Answers to Quiz #2
April 3 April 4 April 5 April 6 April 7 April 8 April 9
35 / 47
136. Conclusions Suggestions
What is the Value of Power?
Answers to Quiz #2
Answer: False!!
This is the BPA regulation signal! The actual value is ...
36 / 47
137. Conclusions Suggestions
What is the Value of Power?
Answers to Quiz #2
Answer: False!!
This is the BPA regulation signal! The actual value is ...
8000
6000
4000
2000
0
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW MW
Load
Generation
from Wind
Balancing reserves deployed
Curtailment tresholds
Value no less than the
800
600
400
200
0
−200
−400
−600
−800 Seattle economy?
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
36 / 47
138. Conclusions Suggestions
What is the Value of Power?
Extra credit: What if one resource cannot provide all of the balancing needs?
Balancing
Reserves
Desired
What’s the
value of this:
800
600
400
200
0
−200
−400
−600
−800
-1000
800
600
400
200
0
−200
−400
−600
−800
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW MW
37 / 47
139. Conclusions Suggestions
What is the Value of Power?
Extra credit: What if one resource cannot provide all of the balancing needs?
Balancing
Reserves
Desired
What’s the
value of this:
800
600
400
200
0
−200
−400
−600
−800
-1000
800
600
400
200
0
−200
−400
−600
−800
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW MW
38 / 47
140. Conclusions Suggestions
What is the Value of Power?
Extra credit: What if the shape isn't quite right?
Balancing
Reserves
Desired
What’s the
value of this:
800
600
400
200
−200
−400
−600
−800
-1000
800
600
400
200
0
−200
−400
−600
−800
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW MW
39 / 47
141. Conclusions Suggestions
What is the Value of Power?
Extra credit: What if the shape isn't quite right?
Balancing
Reserves
Desired
What’s the
value of this:
Answer,
Delay is deadly
in a control system
800
600
400
200
−200
−400
−600
−800
-1000
800
600
400
200
0
−200
−400
−600
−800
-1000
April 3 April 4 April 5 April 6 April 7 April 8 April 9
MW MW
40 / 47
144. Conclusions Suggestions
Where is the risk?
Let us count the ways...
Does the grid operator obtain reliable service?
35
30
25
20
15
10
5
0
-5
-10
-15
20
15
10
5
0
-5
-10
-15
6:00 7:00 8:00 9:00 6:00 7:00 8:00 9:00
Regulation (MW)
Gen 'A' Actual Regulation
Gen 'A' Requested Regulation
-20
:
Regulation (MW)
Gen 'B' Actual Regulation
Gen 'B' Requested Regulation
Traditionally, regulation service is not great
41 / 47
145. Conclusions Suggestions
Where is the risk?
Let us count the ways...
Does the grid operator obtain reliable service?
Is transmission planning adequate?
41 / 47
146. Conclusions Suggestions
Where is the risk?
Let us count the ways...
Does the grid operator obtain reliable service?
Is transmission planning adequate?
41 / 47
147. Conclusions Suggestions
Where is the risk?
Let us count the ways...
Does the grid operator obtain reliable service?
Is transmission planning adequate?
Adequate maintenance?
41 / 47
148. Conclusions Suggestions
Where is the risk?
Let us count the ways...
Does the grid operator obtain reliable service?
Is transmission planning adequate?
Adequate maintenance?
$9000 3000 $/MWh
Insulate the coal plant? February 2, 2011
Are you crazy??
2000
1000
0
5am 10am 3pm 8pm −500
41 / 47
149. Conclusions Suggestions
Where is the risk?
Let us count the ways...
Does the grid operator obtain reliable service?
Is transmission planning adequate?
Adequate maintenance?
Predictable bills to consumers?
41 / 47
150. Conclusions Suggestions
Where is the risk?
Let us count the ways...
Does the grid operator obtain reliable service?
Is transmission planning adequate?
Adequate maintenance?
Predictable bills to consumers?
300
200
100
$/MWh
Hour
Mean Price
Zone Bid Price
Market Clearing Price
00 5 10 15 20 25
Prices in PNNL study
41 / 47
151. Conclusions Suggestions
Where is the risk?
Short term markets =) lack of planning =) risk
From an anonymous colleague in industry:
Actual economic dispatch modeling plays a relatively minor part
in the traditional process of facilities planning (generation and
transmission). Much more attention is placed on construction
and
152. nancing costs (and uncertainty associated with these),
uncertainty of fuel prices, uncertainty of market prices,
uncertainty of future technological advances, uncertainty of
future environmental regulation, uncertainty of other political
factors, etc.
42 / 47
153. Conclusions Suggestions
Where is the risk?
Short term markets =) lack of planning =) risk
From an anonymous colleague in industry:
Actual economic dispatch modeling plays a relatively minor part
in the traditional process of facilities planning (generation and
transmission). Much more attention is placed on construction
and
154. nancing costs (and uncertainty associated with these),
uncertainty of fuel prices, uncertainty of market prices,
uncertainty of future technological advances, uncertainty of
future environmental regulation, uncertainty of other political
factors, etc.
My experience is that we (the planners) always had a
long-term look. Our recommendations and decisions were always
based on long-term net present value analysis. In fact, the reason
we looked out only 30 years was because this was roughly the
expected life span of a generating station.
42 / 47
155. Conclusions Suggestions
The current RTM paradigm must be reconsidered
Why have real time markets?
No value has been demonstrated for real-time markets.
43 / 47
156. Conclusions Suggestions
The current RTM paradigm must be reconsidered
Why have real time markets?
No value has been demonstrated for real-time markets.
Empirical evidence: We cannot distinguish robbery from eciency.
43 / 47
157. Conclusions Suggestions
The current RTM paradigm must be reconsidered
Why have real time markets?
No value has been demonstrated for real-time markets.
Empirical evidence: We cannot distinguish robbery from eciency.
Is This A Free Market For Fire Fighters?
43 / 47
158. Conclusions Suggestions
The current RTM paradigm must be reconsidered
Why have real time markets?
No value has been demonstrated for real-time markets.
Empirical evidence: We cannot distinguish robbery from eciency.
Is This A Free Market For Fire Fighters?
Why then would you use real-time prices to control devices?
43 / 47
159. Conclusions Suggestions
The current RTM paradigm must be reconsidered
Why have real time markets?
No value has been demonstrated for real-time markets.
Empirical evidence: We cannot distinguish robbery from eciency.
Is This A Free Market For Fire Fighters?
Why then would you use real-time prices to control devices?
Today's contracts with DR resources demonstrate alternatives
43 / 47
160. Conclusions Suggestions
The current RTM paradigm must be reconsidered
Alternatives
TOU prices for peak shaving, and
Contracts for real-time demand-response services
44 / 47
161. Conclusions Suggestions
The current RTM paradigm must be reconsidered
Alternatives
TOU prices for peak shaving, and
Contracts for real-time demand-response services
Successful contracts today: Constellation Energy, Alcoa, residential pool
pumps, commercial buildings (see new work at Univ. of Florida), ...
Eciency loss*, but utility and consumers each have reliable services
*Extra credit: De
163. Conclusions Suggestions
The current RTM paradigm must be reconsidered
Alternatives
TOU prices for peak shaving, and
Contracts for real-time demand-response services
Successful contracts today: Constellation Energy, Alcoa, residential pool
pumps, commercial buildings (see new work at Univ. of Florida), ...
Eciency loss, but utility and consumers each have reliable services
New smart appliances that can facilitate these contracts
44 / 47
164. Conclusions Suggestions
The current RTM paradigm must be reconsidered
Alternatives
Control theory to make this all work:
We don't know why the grid is so robust today. Introducing
all of these dynamics may lead to new control challenges.
Policy that is guided by an understanding of physics and economics
44 / 47
165. Conclusions Suggestions
The current RTM paradigm must be reconsidered
Alternatives
Control theory to make this all work:
We don't know why the grid is so robust today. Introducing
all of these dynamics may lead to new control challenges.
Policy that is guided by an understanding of physics and economics
Thank You!
44 / 47
166. Conclusions Suggestions
Pre-publication version for on-line viewing. Monograph ava ilable for purchase at your favorite retailer
More information available at http://www.cambridge.org/us/catalogue/catalogue.asp?isbn=9780521884419
Control Techniques
FOR
Complex Networks
Sean Meyn
August 2008 Pre-publication version for on-line viewing. Monograph to appear Februrary 2009
Markov Chains
and
Stochastic Stability
(f)
Pn(x, · ) − f 0
V (x) −f(x) + bIC(x)
sup
C
Ex[SC (f)]
S. P. Meyn and R. L. Tweedie
References
45 / 47
168. eepoorfard, S. Meyn, and U. Shanbhag.
Dynamic competitive equilibria in electricity markets. In A. Chakrabortty and M. Illic,
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