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A new white paper from the Electric Power Research Institute (EPRI) marks an important milestone in the evolution of the Smart Grid. EPRI describes it as the move from Smart Grid command & control to inform & motivate. I describe it as the move from interactive to transactive.
As devices get more intelligent, the grid can move away from centralized control over each device. We won’t need a Giant Brain in the Sky capable of talking to and commanding millions of devices. Instead, we can get by with a central resource controller that keeps those smart devices informed about what is going and gives them incentives for the behavior it wants. Price signals might be one kind of incentive. Seeing that peak pricing was going into effect, a smart appliance might choose to throttle back until prices were lower.
In essence, these devices are performing small transactions. If we take this approach, as EPRI points out, the Smart Grid can move forward much more quickly. For one thing, it lets us innovate and improve without fear of obsolescence. Manufacturers can swap in a newer, better device at any time, as long as it can talk and transact with the system.
The EPRI white paper goes into details about the messaging and other standards needed to allow this kind of system. Many other organizations have been working on this same approach for at least a decade, including Pacific Northwest National Laboratory (see my historical postscript). But EPRI’s paper marks, in my view, the mainstreaming of the concept.
PS: I coined the term transactive back in the late 90s, to describe the progression media was making as it moved from print to TV to Internet to eCommerce (see image below). Hearing me keynote a technology conference, PNNL executive Steve Hauser realized that the nascent Smart Grid was heading for a similar evolution. In fact, scientists at the lab had already been working on ways to make HVAC controls transactive, so that they could "bid" for heating and cooling as they needed it; a technique that turns out to make the system much more efficient.
Since then, economist Lynne Kiesling has adopted and extended the term, as you can read in the links listed below. Please use the Talk Back form to link us to other discussions on this important topic.
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You may also be interested in ...
Smart Grid Command & Control: Concepts to Enable Advancement of Distributed Energy Resources, an EPRI White Paper (PDF)
A Smart Grid Is a Transactive Grid; Lynne Kiesling
Smart Policies for a Smart Grid: Enabling a Consumer-Oriented Transactive Network (PDF)
Related SGN resources ...
Next Generation Monitoring and Control Functions for Future Control Centers
Smart Grid Command & Control news and technologies
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| Death of the Giant Brain |
| Thank you, Jesse, and thank you Lynne Kiesling! I think your ideas and advocacy should help raise the level of debate about corporations, government, technology and democracy even as they help solve the energy problem. |
| Lance McKee - 03/03/2010 - 07:54 |
| The 'transactive' Smart Grid |
| Many thanks to the people at EPRI and their ability to keep their eyes on the energy horizon. I don't hear it much anymore, but it seemed like more Demand Response presentations in the past mentioned the idea of the utility reaching into the consumer endpoint and switching load elements off as part of a DR event. The discussion was always theoretical, but I would bet that in practice many privacy and consumer groups would have a lot to say about giving any entity (whether it's the government or an energy service provider) that level of control. The evolution from centralized to decentralized control seems natural; we've seen it take place in the computing world and it appears to be coming to the electrical supply chain. The key to its adoption will be the delicate balance between the decentralized, incentive-based 'transactive' market at the point of consumption, and the rigid centralized controls that remain necessary for generation. The only way to achieve this is through the enhanced communication, analysis, and planning being made available through the adoption of Smart Grid technologies. |
| Paul Molitor - 03/03/2010 - 07:55 |
| Transactive Demonstration |
| Transactive Hierarchical Control is at the heart of the Pacific Northwest Smart Grid Demonstration Project being led by Battelle along with 12 utilities across the northwest. The project intends to demonstrate how a value signal can affect behavior at the utility and customer level. |
| Richard Damiano - 03/03/2010 - 08:34 |
| No more Command & control |
| Hi Jesse: Fully concur. Right from the beginning, about 5 years ago, one of Smart Grid's cornerstone was distributed intelligence, local control. We cannot rely on the 70's command anc control concept. If the communications is lost, the system dispatcher will be totally in the dark in the C&C case. Thus the distributed intelligence, local controls have been offerred by vendors for a number of years, and the importance of system architecture. |
| ML Chan - 03/03/2010 - 08:56 |
| Role of price in the communications |
| I'm strongly in favor of hierarchical control approaches. However, one aspect that isn't apparent in the scenarios is the price aspect. In other words, the stronger the price incentives, the more energy consumers will drop demand when requested. Conversely, if consumers are willing to pay a premium, suppliers will respond with more energy. I don't see the pricing information discussed in the communication scenarios described in the paper. I don't believe we can assume all that is prearranged. |
| Steve Ray - 03/03/2010 - 09:01 |
| A Smart Grid needs Distributed intelligence |
| Lynne Kiesling continues to hit the nail on the head, by advocating the message that utilities and grid operators need to understand: Command and control simply isn't possible all the way down to the level of load optimization for a truly smart grid. Optimized load control, whether for increasing day-to-day peak load management, or for dealing with stressful conditions, can only be done on a wide scale using Distributed Intelligence techniques. Moving the decision making down to loads within a facility offsets the burden (and ridiculous data management and timing problems) from centralized control agencies, and allows loads to make intelligent, autonomous decisions for the benefit of the grid. Swarm logic is a particular way of using distributed intelligence such that collections of loads can manage themselves, and has demonstrated benefits in terms of the simplicity and ease of deployment previously unachievable using conventional centralized (read "highly customized" and "lengthy time to configure, deploy, and maintain") EMS techniques. Outfitting facilities for "DR in a Day" is only achievable if one's control logic is embedded in load control devices at the point of load control and not in an highly-customize, inflexible command-and-control system that must take into account all data present. We as an industry need to think more in terms of distributed intelligence rather than traditional command and control techniques -- now that the technology is available! Mark Kerbel, President, REGEN Energy |
| Mark Kerbel - 03/03/2010 - 09:07 |
| command & control to inform & motivate |
| EPRI is getting closer with their suggestion to move from "command & control to inform & motivate." However "educate" needs to be part of the process. The customer will be unable to discern what to do with being "informed" and certainly will not be "motivated" until they are educated on the whole of the smart grid ramifications to them. A smart grid with an uneducated endpoint (the customer) is an incomplete system. |
| Bill Wylie - 03/03/2010 - 09:11 |
| Amen to "Price" |
| Steve - You are absolutely correct that the pricing dimension needs to be correct before the system will work. If you happened to catch our article about "Utilities Afraid to Push Hard..." (see link at bottom) then you know that some utilities aren't even trying to use price yet. Sadly it will take policy and regulatory changes to make that happen -- and those things may be even harder than the technical issues that the EPRI paper discusses. http://www.smartgridnews.com/artman/publish/Technologies_Metering_News/Utilities-Afraid-to-Push-Hard-for-Energy-Conservation-1910.html |
| Jesse Berst - 03/03/2010 - 12:56 |
| Amen to "Consumer Education" |
| Bill - Yes, we must educate consumers and the regulators as well, since they are proxies for the consumer. We've run several articles on the growing pushback (see link at bottom) and I can tell you that if the industry doesn't get better at outreach and education, then Smart Grid adoption will slow to a crawl in the face of consumer resistance. http://www.smartgridnews.com/artman/publish/Technologies_Metering_News/Utilities-Afraid-to-Push-Hard-for-Energy-Conservation-1910.html |
| Jesse Berst - 03/03/2010 - 13:00 |
| Do today's power grids have little centralized control? |
| This post is about the perceptions of power grids command and control. Please consider the following: In the article "Cascading failures in power grids," published in the Sep/Oct 2009 issue of IEEE Potentials, Paul Hines, et al, write that: "Unlike with an airplane, a car, or even a municipal water system, no single organization supervises a large power grid. Instead power grids are complex systems, from which we get relatively reliable service with very little centralized control." |
| José Antonio Vanderhorst-Silverio, Ph.D. - 03/03/2010 - 19:48 |
| About Time |
| This type of decentralized control isn't a new idea. I know some folks (because I was one of them) who were trying to win converts back in the late 1990s. Pricing is critically important. Even more important is making sure prices are actionable, which means customers have to know the price ahead of time in order to act, whether that action is taken manually or via some form of automation. At some point, wholesale and retail prices have to come together so that customers can both influence the price and be influenced by the price. Regulators and grid operators have to have a greater tolerance for price volatility than they have been able to muster thus far, because without volatility there's no reason for customers to act. This does not necessarily mean the average prices will be higher or lower as a result. The public won't accept this if it's mandatory, and there's no reason it should be. Instead, regulators have to make some form of dynamic pricing available on a optional basis, and then help consumers understand how they work, why they're beneficial, and how to take good advantage of them. |
| Jack Ellis - 03/03/2010 - 22:01 |
| Electricity 2.0 |
| Jessie's post and the EPRI report are right on. In my recent paper, Electricity 2.0: Unlocking the Power of the Open Energy Network, I make a similar argument for a new distributed, open electricity architecture. However, some of this will happen fastest if competitive spaces with multiple market participants can be demarcated across the network, both physically, ie at the home or business, and conceptually as in a new commerce layer over physical wires. Please check out the report at www.electricity20.org. Michael Moynihan, Chmn, NDN Electricity 2.0 Initiative |
| Michael Moynihan - 03/04/2010 - 06:07 |
| Another Institutional Memory Warning |
| To warn the emerging community, I will repeat once again the following: the leaders of deregulation did not consider the two warnings given by Fred C. Schweppe (and his colleagues) in his book Spot Pricing of Electricity: "The deregulation concept of this chapter is based on a supply and demand marketplace. Most of the other deregulation literature is oriented only to the supply side i.e., to deregulating generation without altering the way users buy electricity. We believe that deregulation which considerers only the supply side of the supply-demand equation is very dangerous and could have very negative results… A second major difference between this chapter and most of the rest of the deregulation literature lies in our concern that the economics and physical security of power systems not be destroyed or compromised." Concentrating on the first warning, Jack has pointed out some key characteristic of an effective architecture framework for the power industry system. These are two examples of my interpretation of Jack post: instead of one shot homogeneous smart grid architecture that forces smart meters on customers, a transition heterogeneous architecture is needed to support customer choice; instead of retail prices that are based on wholesale prices, retail and wholesale prices mutually reinforce each other. In summary, those two key characteristics are in synchronicity with the emergent holistic Electricity Without Price Controls Architecture Framework (EWPC-AF), that is described in the link http://bit.ly/8XJlra In addition, the EWPC-AF considers the second warning in order not to destroy or compromise the economics and physical security of the power systems. That way it does not bypass the non trivial institutional memory of the power industry as a complex adaptive socio-technical system. Instead of command and control, the power industry has practiced, for example, for quite some, the two complex adaptive processes of short run system security and long run system adequacy. I assert that the main deregulation mistake was that lawyers and economists did not take into account those non trivial elements of the institutional memory of the power industry. I just hope that this time the information and communication community do not repeat that same mistake, which is bound to happen with the ongoing Smart Grid strategy. |
| José Antonio Vanderhorst-Silverio, Ph.D. - 03/04/2010 - 07:10 |
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