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

[Girish Ghatikar <GGhatikar@lbl.gov>]

Ed,

These are some good use cases. I suggest few simple interaction diagrams 
indicating the communication flow between the actors involved.

Thanks,
Rish

Ed Cazalet wrote:
>
> 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 <mailto: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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-- 
Rish Ghatikar
Lawrence Berkeley National Laboratory
1 Cyclotron Road, MS: 90-3111, Berkeley, CA 94720
GGhatikar@lbl.gov | +1 510.486.6768 | +1 510.486.4089 [fax]

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