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Subject: RE: [emix] follow-on question to 'green fountain' scenario


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

ed@cazalet.com

www.cazalet.com

 

From: Holmberg, David [mailto:david.holmberg@nist.gov]
Sent: Friday, February 19, 2010 2:12 PM
To: emix@lists.oasis-open.org
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

 

 

 

-----Original Message-----
From: Phil Davis [mailto:pddcoo@gmail.com]
Sent: Thursday, February 18, 2010 8:54 PM
To: 'Anne Hendry'; emix@lists.oasis-open.org
Subject: RE: [emix] follow-on question to 'green fountain' scenario

 

Well, my head hurts now...

 

We've had two kinds of customers in the past: one that wanted green energy

but specifically also that wanted to retire the associated certificates

(altruistic).  The other was one that wanted fungible certificates so that

any excess over their target could be resold (mercenary).

 

With respect to local solar,  suspect your points would be addressed by the

state PUC's and implemented by the LDC.  It is not practical to expect local

generators (excluding those that are in the professional generating

business) to deal with the complexities of energy markets.  The result is

that the "greenness value" is expressed in local incentives (rebates, tax

credits) which essentially replace the concept of certificates for value or

at least duplicates that function.  Absent that, you'd almost have to have a

meter that could imbue net metered electrons with the appropriate value

added certificates and communicate that to some central banker.  We actually

make meters capable of this and of distinguishing between dirty and clean

local generation, but the cost is beyond that which most small installations

would find feasible.

 

Helpful?

 

Phil Davis

 

 

 

-----Original Message-----

From: Anne Hendry [mailto:ahendry@pacbell.net]

Sent: Thursday, February 18, 2010 1:49 PM

To: emix@lists.oasis-open.org

Subject: [emix] follow-on question to 'green fountain' scenario

 

After today's discussion I wanted to try to get a bit more clarity on the

'green content source' discussion, so thought I'd throw out a hopefully

simple example.

 

In my area we have quite a bit of local solar.  Up until recently net

metering was the predominant method for handling any excess, although that

is moving towards a direct monetary compensation model and eventually one

where all generation is put back to the grid first.  Now, the generator

(local home, business) gets certs for that green energy put back.  Once that

energy goes back to the pool, though, I don't believe there is any tracking

of how that energy was generated (other

than the remaining certs).   Are we envisioning a future where that will

change and all sources will be tracked through additional mechanisms?

 

[It may be the case that even if power does come from a green source, there

is no certificate or tracking because it has not been 'certified', perhaps

because there has been no mainstream market established for it, or the

certification process is too onerous.]

 

Even if there is tracking, the certs for the above example go off into the

financial carbon trading world where their validity and value are manged by

a financial mechanism that is a world unto its own, and the energy takes a

different route, back to the grid and then on to someone else's home or

business.

 

So the financial value of the 'greenness' of this energy has already

been used up (by giving certs to the producer).   I would therefore

assume the cost of that energy to the consumer would be lower [than if it

included the certs] because it has no certs included/embedded -- that

value has already been realized by someone else.   If the certs had not

already been utilized, and came with the energy, then the price of this

energy would be higher because it would include valuable carbon certs. 

So, then, going back to the 'green fountain' example, is that consumer

looking for utilized or unutilized 'green value', or does it care?   Is

it driven primarily by economic reasons or altruistic reasons?

 

Another way to pose this, relative to what we're modeling, might be: if the

certs have already been utilized, is there still value (and data) to be

tracked due to the green source -- other than what went with the value of

the certs (this would be, basically, altruistic value)?  This assumes the

price is adjusted at the time the certs are removed.

 

I felt at the end of the discussion that we may be talking about two

entirely different types of scenarios/markets.

 

Any comments/corrections welcome.

 

-Anne

 

 

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