Transactive Incentive Signals to Manage Electricity Consumption for Demand Response
This project will design, develop, test, and implement a system to create and communicate transactive signals (proxy prices) that can be used to facilitate Demand Response (DR) provided by California utility customers and other recipients.
Electric Power Research Institute, Inc.
Recipient
Palo Alto, CA
Recipient Location
13th
Senate District
23rd
Assembly District
$498,053
Amount Spent
Completed
Project Status
Project Result
This project was completed on March 31, 2020. The final report has been delivered, returned to the contractor for revision, and resubmitted. It is now going through the publications process. This project successfully developed and demonstrated a TLM price signal system to automate load management strategies. The TLM provided a standard approach to enable supply- and demand-side market DR participation. The TLM price signal delivered hourly and sub-hourly energy prices to reflect real-time grid and market conditions. The price signal enabled grid operators to offer price-based DR programs and allowed customers to participate in those programs when it best fit their cost and operational needs.
The Issue
Demand response (DR) has substantial potential to act as either a demand-side or a supply-side resource. However, existing programs and rates do not provide a participation incentive structure that accurately reflects system conditions or system costs, a suboptimal situation that results in higher ratepayer costs, low DR participation and an inability for system operators to regularly utilize demand-side resources. As the state moves toward more distributed generation and intermittent renewable energy generation, integration of those generation resources will further increase costs in the absence of significantly expanded DR resources responding to actual system needs in real time.
Project Innovation
This project develops Transactive Load Management (TLM) signals, expressed in the form of proxy prices reflective of current and future grid conditions, and develops and implements software to calculate such signals. These signals are being designed to provide customers sufficient information to optimize their energy costs by managing their demand in response to system needs. The signals are transported via proven and available protocols and networks for use by projects that will test the efficacy of the TLM signals using the demand response projects awarded under GFO-15-311, Advancing Solutions that allow Customers to Manage Their Energy Demand.
Project Benefits
This project has developed a day-ahead hourly proxy price signal that incorporates system conditions as reflected by wholesale energy markets. The hourly prices are being made available on a publicly-accessible server and are being incorporated as one of the experimental pricing structures being evaluated in EPIC demand response projects funded under GFO-15-311. The experimental pricing structures assessed the potential for a variety of different loads and customer types to respond automatically to a real-time proxy pricing signal, and by extension, the potential of DR being a demand side or a supply side resource for the State. Utilities have realized the potential benefits of TLM that PG&E has recently proposed its own day-ahead hourly rate.
Affordability
Demand response lowers costs for both the system and individual customers. Procurement costs are reduced when wholesale energy prices are attenuated by price-responsive demand; customer costs are reduced when they either shift consumption to lower-priced times or receive payment for participating load reduction.
Reliability
High levels of demand can stress grid assets, and increased stress could lead to outages if left unchecked. If the TLM day-ahead hourly price signal that was successfully demonstrated in this project with smart management of consumer loads was adopted, retail customers could optimize their demand load to minimize stress on grid equipment and improve reliability.
Key Project Members
Rish Ghatikar
Subrecipients
InTech Energy, Inc.
Greenlots
Match Partners
Greenlots
