David,
You posed several use cases, but let me start
with the use case you highlighted which was green energy provided by a retail
service provider.
The retail service provider provides you with
green energy from one of several portfolios or from combinations of these
portfolio. The green portfolios
could be as follows:
1. Consider a set of local solar and wind
resources on a micro grid connected to you and other customers. The retailer contracts
with you to provide energy only from these sources at a dynamic price that
depends on supply vs. demand or he provides you a formula allocation of actual
generation at a price. Price, quantity
and delivery interval and delivery location as well as a contract reference
would give the customer, the retailer and the generators all the information they
need given the contracts the retailer had signed. The retailer includes in his price to
customers the price paid to the generator, the price of the distribution, cost of distribution losses, markup, and
perhaps taxes. The retailer would
have to have access to the generators' meter data in real time to inform the
customers of actual energy delivery.
Customers would automatically turn smart devices on and off depending or
price or supply. Toby's green fountain would work with this. The delivery intervals for the
transactions could be seconds or shorter. If this micro grid is not connected to
the main grid and the only generators on the micro grid are wind and solar and
are all contracted with the retailer a customers is assured he is getting only
wind or solar energy. The retailer could also own batteries or contract for battery
services to reshape the green deliveries accounting for the losses in storage
and the cost of the battery storage in the price of green energy to the
customer. Alternatively the
customer could own or contract for battery storage to shape energy to his
needs. No need for certificates here
as the retailer has only wind and solar energy to serve you and he can only
sell what he has on a closed microgrid.
2. Same as case one but the green generation is remotely
located on the transmission grid. Assume
the retailer has a direct contractual relationship the a set of green
generators to take all of a wind or solar generator output. Then the only difference is that the
retailer must pay for the transmission charges and losses. On an ISO controlled grid such as PJM or
the California ISO. The retailer
will be pay a grid access charge, a marginal congestion charge and incur
marginal losses. Prices for these
services are readily available in these ISOs. However the traceability of the
electrons is lost. As long as the retailer
has access to the meter data from the generators he can assure that he did not
take out of the grid more wind and solar energy than this contracted generators
put in. However, it could be
that congestion on the grid would require that the green electrons be delivered
somewhere else and a coal plant be dispatched to actually deliver electrons to
the customers even though the customers are only getting energy when the wind
and solar generators are producing.
Again no green certificates are needed.
3. Same as 2 except the retailer is dealing
with many green generators and customers.
A third party or the ISO could host an exchange to take the wind and
solar generator meter readings and allocate the generation among the retailers
perhaps based on a sharing rule or a price based auction. Again no need for certificates. Intervals for this exchange could be as
short as desired. Storage can still
be used. The exchange operator
might offer to sell excess wind and solar into the rest of the grid and buy an
equal amount back at a later time using the grid like a storage battery. However he may be displacing hydro energy
when he sells it and buying back coal energy which an obvious non green result
but it provides greater reliability of service to customers.
4. Same as 2 except the a third party creates bank
accounts of green kwh for each generator and each customer. A separate set of accounts is created
for each delivery interval. A
generator's account would be credited for each kwh generator in an interval. A customer's account would be debited
for each kwh consumed in an interval.
The retailer would buy kwh from the generator accounts and deposit them
in the customer accounts. No kwh
could be sold twice. The retailer
could deliver energy from the main grid whenever he has a matching kwh in the customer
account.
5 Same as 4 except there is one account per
year for each customer and generator.
There is no need for the retailer to buy energy directly from any wind
or solar generator. Wind and solar
generators continue to be credited with deposits in their an annual accounts.
The retailer will contract with the green generators to buy only deposits in
his account and the generators will sell their actual generation to anyone on
the grid. Customers accounts will
be debited a kwh of wind solar in their accounts and for each kwh used. To facilitate commerce each bank can
create a certificate for a kwh of green energy ( which is a form of
currency) that can be freely traded. Since the generators are getting one
stream of revenue for the energy to the grid and a second stream of revenue for
the certificates, the price of the certificates will not include the price of
the energy. With annual kwh certificates there will be more market liquidity
than if certificates were set up on very short intervals. However with annual accounts we are essentially
using the grid as a storage battery and there can be environmental consequences
as described above.
Case 5 is essentially how environmental
registry services support green energy today with registered environmental
certificates that can be moved among many parties and registries. In this later case emix
can describe the energy and the certificates as price, quantity, delivery
interval and location records with a reference to the contract, market or
certificate authority.
Probably some diagrams and editing would
improve these uses cases if they are helpful.
Ed
Edward G. Cazalet, Ph.D.
101 First Street, Suite 552
Los Altos, CA 94022
650-949-5274
cell: 408-621-2772
www.cazalet.com
From: Holmberg, David [mailto:]
Sent: Friday, February 19, 2010 2:12 PM
To:
Subject: RE: [emix] follow-on question to 'green fountain' scenario
So, I missed the emix meeting, so don't have those notes
yet, but I want
If I have local generation, PV
·
All I can measure is active and reactive power
at the meter.
·
I can meter the solar panel, or mix it in with
the house meter.
·
The utility can buy me a separate meter and pay
me some premium price for my solar power, then they get the results certs.
·
They can pay for the solar panel and maintain it
and then I am just leasing them my roof.
If I want to use green energy, clearly I get whatever
electrons are in the wire, pushed by the nearest and biggest power sources. If
I have a solar panel on the roof with a crappy inverter, then I get low-quality
green power. But, let’s just talk about what some grid-side service
provider might sell me. They can offer me the “green power” option,
which means they are trading RECs (certs whatever) in the background to make
sure that the number of kWh I purchase is backed up with kWh produced at some
wind/solar/hydro generator somewhere. They might have a RTP for this green
power and communicate with that price the info about where that power came
from, or the serial number on the RECs or something else. But there is no way
to give me only green electrons, and there is no way (I suppose) to even say,
for a given customer, exactly where the power IS coming from.
If we pass cert serial numbers around, then we have
traceability to where the power came from (assuming we don’t have
multiple copies of the cert).
How do RECs work, and what is the difference from that
with a cert? What are we certifying? We could have a minute by minute meter
history that puts a cert on each minute of power production. E.g., 31.52 kWh in
the past minute (timestamped) with PV installation ID, etc. That becomes a
fungible commodity. Physically that power is used instantaneously by nearby
loads, spread about. But practically, some entity will buy that quantity of
green power and throw the cert in a big bucket (let’s say it is the
utility selling me green power) and make sure that the number of kWh consumed
by all customers on the green power tariff is matched by the number of kWh
certs in the bag. Am I anywhere close to reality? But we still haven’t
discussed the time and price sensitivity. A cert is for a given minute where there
was some specific local wholesale nodal price (or some relevant price). That
31.52 kWh of solar power on peak might be worth $30. The same power from wind
at night might be worth $1. If we want to actually have a positive effect on
CO2, pollution, energy reduction, then we have to buy certs from power produced
on peak when the power it is offsetting is used on peak. And thus we have to
have certs tied to time, with value of the cert tied to the price at the time
the power was delivered.
Where is that relative to reality? To where we want to
go?
So, you could sell me green power and send me cert IDs to
prove it, but likely you won’t bother sending such info with my price
signal—it’s really unrelated to the real-time price isn’t it?
The price reflects the cost of power (or of greener sourced power), but
isn’t tied to any specific generator. The cert says that some green
power, with my name now on it, was produced at the same time I used some power.
If I take Toby’s example of only running the fountain when the wind is
blowing at the wind generator on the next mountain, then all I have to do is
buy certs from that generator for power generated at the same time the fountain
is on. What we need is a market interaction that allows completing that
transaction on the order of the time the wind starts and stops so that I can
know I got the power and run the fountain pump based on fresh certs. I
don’t want to run the fountain at 2:05pm only to find out that the wind
on the next mountain quit at 2:03pm, or that all the certs from the now
diminished wind were already sold to someone else. So, then, if we envision
being able to buy specific certs from specific generators, we are really
talking about a local auction, no?
Oh well, too many thoughts…
David
