Made a minor correction in use case 4.
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 3 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
