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Subject: RE: [emix] What about Price Look-ahead.
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Phil and Jeremy
both support forward prices for emix as do I. To minimize manipulation the forward
prices need to be actual quotes to buy or to sell back at known prices from
competitive or regulated suppliers.
Prices from open, supervised competitive markets such as ISOs and
exchanges are also less subject to manipulation. However any forecast without an offer to
sell or buy at that price is suspect. In emix we should provide a way for a customer to access
multiple suppliers and markets with binding quotes. (I think our current specification does
this.) If we facilitate communication of forecasts these forecasts should be
clearly distinguished from quotes. Anything
to prevent manipulation beyond this is likely outside our scope. A reason (use
case) for binding forward quotes is as follows: if I am quoted high forward prices in the
afternoon because of high forecast temperatures and low wind generation, then I
can buy lower price power in the morning to pre-cool my building and I can pay
for this by selling back at these high afternoon prices from my forward
long-term contract position. This
will enable me to lock in the savings.
If all I have is a forecast of high afternoon prices and the prices drop
becuase of weather changes or manipulation of the forecast, then I may actually
incur higher costs becuase of pre cooling than if I had cooled in the
afternoon. Forward quotes
and transactions will also help stabilize the market. If in the above use case a large number
of customers increase morning cooling and decrease afternoon cooling the
current and forward price quotes will change as the market reaches a new
equilibrium. However, those
customers who act on the forward prices to drive the market toward this new
equilibrium will have locked in their gains. This will promote market
participation and stability. With
automation forward such forward contracting has low overhead. Additionally it
is well known that forward contracting reduces the potential profits to market
manipulators in comparison to pure spot markets because the amount actually
transacted in each opportunity to transact in forward markets is much smaller
than in pure spot markets. Edward G. Cazalet, Ph.D. 101 First Street, Suite 552 Los Altos, CA 94022 650-949-5274 cell: 408-621-2772 From: Phil Davis [mailto:pddcoo@gmail.com] Toby The look ahead would be
important to C&I systems of the near future. Most product roadmaps
have them consuming forward prices, then setting up hourly controls strategy
for the subsequent 24 hours. There are other market oriented interactions
around that, but these come via different, though related, systems. The
BAS component would be a pretty mechanical reaction to prices, driven by an
embedded model of some kind. Phil ________________________________________________________________________________________________ From: Toby Considine [mailto:tobyconsidine@gmail.com] On
Behalf Of Toby Considine Assume we have a basic Emix done. Does the specification
include a look-ahead? Arguments: Against: This is a market interaction pattern that properly belongs
in EnergyInterop For: Appliances and SEP 2.0 should need no more than EMIX. If
Appliances and SEP need price look-ahead, than it goes into EMIX tc "Energy
and persistence conquer all things." -- Benjamin Franklin
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