After this podcast was recorded, prompted by, and in collaboration with Bruce, I developed a public California price server that publishes both the hourly prices for the PG&E and SCE pilots, and a collection of ToU and flat-rate tariff prices via the standard OpenADR 3 protocol.
And I developed an OpenADR 3 client (VEN) integration for Home-Assistant, the popular open-source home-automation system. The integration can connect to our price-server, obtain prices, and use them to trigger automations, using any of the thousands of existing appliance integrations for Home Assistant.
I wish Dave could have asked a few more questions that didn't seem to come up:
First, Doesn't this require programmable consumption inside the home, at least for house and water heaters? The nightmare is setting the thermostat and finding you've committed to some huge purchase because the price went up. I would need a thermostat that sets the house temperature at:
22 C - if power <10 cts/kwh
21 C at 11 cts
20 C at 15 cts
19 C at 20 cts
18 C at 30 cts
...I'll put on sweaters to save money, but not if heat is cheap.
Secondly, my thermostat computer would want to know the FUTURE prices, because there's no point waiting for cheaper power if it is high at noon, it's a dunkelflaute and will be even worse at midnight.
Thirdly, my "secondly" might be answered if my computer kept track of prices for weeks. Or could watch the news and hear about the dunkelflaute.
Right. It beggars belief that Bruce simultaneously thinks that "highly dynamic" prices can benefit the grid, and also that nobody's going to pay attention to the prices. That way lies Enron. And managing outlier prices involves significant complexity.
("I can do it with Home Assistant" is fun for some people, but not an acceptable requirement to avoid huge price spikes.)
I can already do this on my ecobee thermostats and my heat pump water heater. I use Comed hourly pricing and Home Assistant to tweak the temperature and operating modes depending on the hourly price.
Scandinavia has dynamic prices and a large percentage of the consumers leverage them. Their smart meters have a connection port that is used to export data to the household and their appliances leverage the data for dynamic load management.
Scandinavian households have capacity constraints/tariffs so there is a high incentive to manage the load. Plus some appliances, like saunas, are very energy intensive.
We should learn more from non-US solutions. Europe's legislation has several mandates relevant to this topic and slowly all countries are moving in this direction, with Scandinavia at the forefront.
im not sure i’m comfortable with the use of the words ‘deterministic’ and ‘non-deterministic’ in this context.
im used to how these words are used in programming and i understand what it means in that context, and it doesn’t mean coordination, it means repeatable, predictable outcomes for any given function or algorithm.
maybe i need to get used to it… i’ve modelled grid energy transition in a deterministic way at a high level of aggregated demand for 8760 hours per year. :-)
I about pulled my hair out over the characterization of embedded chips and software as having no significant costs to the consumer for common household devices. I have lost count of the number of people I know who have had to replace a refrigerator after a few years because the electronics can't be diagnosed/fixed for features they have never used, even though there is nothing wrong with the hardware. Others have had to replace (at great cost) the "entertainment system" in their car, because the GPS system (which is integrated) broke, even though that system was not activated on their model. I can easily imagine a cold night coming when the heating system on your house is in standby mode, waiting for the right price, and nobody can get it to override, even when the temp inside is dropping.
Dynamic Pricing seems like the opposite problem. Why would a for profit corporation (utilities) give a crap about setting prices fairly when they can just continue to buy the elections of corporate commissioners and increase prices with whatever algorithm?
With no competition, there is no reason for a corporate utility to provide fair buy back rates nor charge fair rates in general. I would understand this kind of system only with publicly owned utilities.
With the internet or “IT” terminologies we pay a given internet provider, if we’re not happy with that price, we go with another provider, like fiber or some other option. We don’t have dynamic pricing based on what kind of movie we’re streaming nor website we visit. (Should we be charged more for Substack than twitter because someone paid regulators to vote that way?
If I wouldn’t accept it for my search engine, why should I accept this for how or when I use energy?
Why can’t utilities simply build out extensive utility grade energy storage (regardless of tech used) to gain surplus value from solar production? They are already benefitting off homeowners investing in building “utility infrastructure” in the form of solar generation and small energy storage systems that offset the need to develop and build more peaker plants.
Lastly, I also think of Texas, when they had the severe storm and suddenly customers received bills for thousands of dollars because the grid was collapsing and the grid operator and utility services decided to charge exorbitant rates because they could take advantage of people when they needed energy the most.
We need to stop pretending that utilities have some kind of moral backbone and instead regulate them heavily.
"Utilities should set prices for all of their considerations" Notably missing from the list of considerations was "profit". Most utilities want to optimize profit (within the constraints of their regulators), and the way to do this is to increase the expenditure of capital to expand grid capacity, which they then earn a percentage on. It can't be left in the hands of the utilities--it probably requires legislative mandates.
I love the idea of pricing to regulate demand (that's what we're about to get in the most brutal fashion in the oil and LNG market if Hormuz remains closed), and especially that the consumer captures the value of the equipment he/she has installed rather than the utility or a middleman.
One thing a VPP with enough scale might be able to do is induce manufacturers to produce the right equipment--an outdoor battery with inverter/charger in the 10kWh to 15kWh range for under $2,000. With hundreds of thousands of installations, this might be achievable with present technology. Without that large market we might be left with the $7,000 Tesla unit (which is not fully outdoor rated).
What Amber does is a really interesting comparison to this proposal.
For those not in Australia, the eastern states operate a unified grid called the NEM (National Electricity Market). Each state within the NEM has a spot market which generators bid into, at 5-minute intervals. Of course, a lot of energy doesn’t trade on the spot market as it’s the subject of long-term contracts between generators and retailers (some of whom are one and the same companies); however, the NEM spot market heavily influences the price consumers pay.
Amber is mainly intended for customers with rooftop solar and batteries. Amber customers pay a fixed monthly fee on top of a fixed network access charge; they can then buy and sell power into the NEM spot market. Amber integrates with some of the home battery systems and will attempt to optimise the trading of power to maximise your returns, based on its ability to guess what the spot market will do (ithe market mostly follows fairly simple patterns, the most obvious being that spot prices increase in the evening pea).
Like the model discussed in the pod, prices are dynamic, and more granular in time, but they aren’t local, each state has hundreds of thousands to millions of customers, and covers pretty huge geographic areas.
However, the really big difference is that rather than being published in advance by a monopoly buyer and seller, these prices are the result of an actual market with sellers competing to supply the demand. If the price is fixed in advance, there’s no opportunity to respond to events. A truly dynamic pricing regime would allow prices to increase if everyone turns their EV charger on, for instance.
So while the broad thrust of this proposal - to use pricing as the mechanism to balance supply and demand across a distribution grid at a variety of scales - makes perfect sense, I’m not sure that fixing the prices in advance is the best way to respond to events.
I agree with Bruce that in general dynamic prices would result in lower prices most of the year and especially for customers who invest in smart assets like batteries. He mentioned a capacity constraint as an aside. During grid emergencies price exposure for most customers could result in catastrophic electricity bills. This is what happened to Griddy in TX following Winter storm Uri: https://en.wikipedia.org/wiki/Griddy_(company)
I want to understand how Bruce thinks about the role utilities play in shielding customers from this kind of volatility to provide more stable prices. I think this dynamic prices initially will help larger load customers who are very prices conscious and price responsive long before most residential customers adopt.
My core question that I wish Dave asked: How would you deal with prices during grid emergencies?
I listened to this while on a long drive last week. Thank you to David and Bruce for this discussion! Now to my comments:
The "prices vs. VPPs" IMO isn't the right way to frame this discussion. It's really about energy vs. capacity. What Bruce describes is an energy market selling kWh (like ERCOT). What is called a VPP is trying to manage capacity, selling kW (like most other markets.) These are related, but distinct quantities.
Capacity is dispatchable and can be planned for, but must be actively coordinated. Energy does not need active coordination, but also is not guaranteed and cannot be planned for. This has profound implications for infrastructure planning (and the accompanying costs.)
I disagree with Bruce's statement that VPPs (capacity) are only good for emergency programs. They are currently being used in a number of ways to take the place of centralized power plants, to relieve congestion, and defer infrastructure that aren't based on emergencies and cannot be addressed through energy prices alone.
Also, while I recognize the challenges with existing VPP programs that Bruce mentions, most of them have to do with program design rather than the nature of distributed capacity. Most VPP programs evolved from industrial Demand Response programs, and retain many vestiges that cause issues for customers (direct control of single devices, for example.) Dynamic energy pricing is relatively new and doesn't have to contend with that legacy. It is certainly possible to design a capacity-based VPP program that provides the customer choice and ease of use that Bruce argues are advantages of the energy-based approach. (e.g. publish a price for capacity and allow customers to participate and respond accordingly.)
As for "platforms", energy-based dynamic pricing programs will also require them. How else is a customer to optimize between devices? Few customers will want to do this themselves, so service providers will inevitably step into this role, just like the platform providers currently do for capacity-based programs. Furthermore, the podcast discusses using dynamic pricing to influence customer behavior, but doesn't spend much (any?) time discussing how those prices will be determined. There will need to be some sort of market mechanism to set the price. This will inevitably require an entity to manage a customer's participation in that market - again, requiring a service provider "platform" to step in.
Both energy-based and capacity-based pricing have roles to play in the electricity system. While the details may be different, both approaches have a similar technology and value stack with comparable overall costs. This isn't an either/or discussion - we will need both approaches in order to scale a distributed grid.
I’m not sure what Bruce means when he says Comed doesn’t have the price server in Illinois he is talking about. Maybe there are features missing that he’d like to see. I use this to control charging my EV, cooling my home and heating my water, and turning off unnecessary electronics. I use Home Assistant to control it all.
I'm the CEO and Cofounder of Cala Systems. We design, manufacture and sell an intelligent heat pump water heater (HPWH).
Water heaters are mentioned 13 times in the pod with the message being that today's water heaters are ready for 'prices to devices.' I respectfully disagree. Today's water heaters lack awareness of each home's hot water usage patterns; the controls are based on the tank temperature at a given moment; they lack the hardware (variable speed compressor, mixing valve) to adequately execute on better data and better control strategies. Cala was founded to address these gaps and in doing so to realize the full potential of HPWHs to integrate with people's lives, their homes, and the electric grid.
The scale here matters: home water heating is 4% of U.S. energy use -- more than aviation. If fully electrified with HPWHs, the 125 million residential water heaters in America could shift over 340 GWh per day -- the equivalent of 140 one-hundred MW data centers.
With respect VPPs / demand response, I worked at EnerNOC, the DR pioneer and leader in the 2000's, for six years. Here's my first point: real-world access to VPP/DR/Price Signal for home water heaters is rare right now. We've got a long, long way to go.
More generally:
- Price signals are fantastic and there is enormous opportunity to increase their use. The goal should be fully dynamic prices, as Bruce describes.
- DR/VPPs can add real value in the following situations:
(1) Addressing technical complexity, as with frequency response. Bruce cites this.
(2) Firming the 'product' -- if the market is seeking 100 MWs of delivered capacity, the aggregator manages the statistical variation in fleet. In this case, the aggregator is literally aggregating smaller resources into a larger one with the characteristics the market is seeking (consistency, etc.).
(3) Being a counterparty -- if the market wants a responsible market participant that will, say, accept penalties for nonperformance, an aggregator will take this on, but individual sites typically won't.
None of these value-adds take away from their point that price response is a key tool. Its use should grow enormously over time.
In addition to the drawbacks VPPs/DR that David and Bruce discuss, I would add that VPPs/DR often involve measuring energy use that didn't happen -- a counterfactual. This is an additional source of complexity.
As a California resident I was gratified to learn that this is in the process of being stood up and tested. Last year's legislative session produced a bill to push VPP's forward that was vetoed by our governor. The idea that VPP's are not the be all and end all of increasing grid efficiency and lowering cost is heartening.
The idea of how "pricing" would work seems a bit unrealistic in that consumers don't think of the value of some outcome in terms of price. We want a hot shower and a cold beer and enough power in our car to get thru the day ahead. Much like the new "smart" thermostats take our vote on what temperature we desire, our home controller will probably be an AI that learns our patterns and desires and ultimate desire to keep our electricity bill in some bounds.
On the utility end of things, they will likely have an AI that is trying to learn how all of the home systems react to price signals (and weather and calendar related signals) to be able to extract the desired optimal operation of the grid. Out of this I could see where a grid substation that is easily overloaded would require higher price signals to deliver the headroom needed at that location. This could also be used to point to where upgrades are most needed.
"Don't put digital paint onto 19th-century electricity technology" is the line. The pricing argument lives at the utility-retail layer. Can this work without buy-in from the RTOs and FERC?
After this podcast was recorded, prompted by, and in collaboration with Bruce, I developed a public California price server that publishes both the hourly prices for the PG&E and SCE pilots, and a collection of ToU and flat-rate tariff prices via the standard OpenADR 3 protocol.
See https://github.com/grid-coordination/price-server-user-guide
And I developed an OpenADR 3 client (VEN) integration for Home-Assistant, the popular open-source home-automation system. The integration can connect to our price-server, obtain prices, and use them to trigger automations, using any of the thousands of existing appliance integrations for Home Assistant.
See:
https://community.home-assistant.io/t/announcing-openadr-3-ven-for-home-assistant/1005701
https://github.com/grid-coordination/openadr3-ven-hass
I wish Dave could have asked a few more questions that didn't seem to come up:
First, Doesn't this require programmable consumption inside the home, at least for house and water heaters? The nightmare is setting the thermostat and finding you've committed to some huge purchase because the price went up. I would need a thermostat that sets the house temperature at:
22 C - if power <10 cts/kwh
21 C at 11 cts
20 C at 15 cts
19 C at 20 cts
18 C at 30 cts
...I'll put on sweaters to save money, but not if heat is cheap.
Secondly, my thermostat computer would want to know the FUTURE prices, because there's no point waiting for cheaper power if it is high at noon, it's a dunkelflaute and will be even worse at midnight.
Thirdly, my "secondly" might be answered if my computer kept track of prices for weeks. Or could watch the news and hear about the dunkelflaute.
Right. It beggars belief that Bruce simultaneously thinks that "highly dynamic" prices can benefit the grid, and also that nobody's going to pay attention to the prices. That way lies Enron. And managing outlier prices involves significant complexity.
("I can do it with Home Assistant" is fun for some people, but not an acceptable requirement to avoid huge price spikes.)
I can already do this on my ecobee thermostats and my heat pump water heater. I use Comed hourly pricing and Home Assistant to tweak the temperature and operating modes depending on the hourly price.
Scandinavia has dynamic prices and a large percentage of the consumers leverage them. Their smart meters have a connection port that is used to export data to the household and their appliances leverage the data for dynamic load management.
Scandinavian households have capacity constraints/tariffs so there is a high incentive to manage the load. Plus some appliances, like saunas, are very energy intensive.
We should learn more from non-US solutions. Europe's legislation has several mandates relevant to this topic and slowly all countries are moving in this direction, with Scandinavia at the forefront.
im not sure i’m comfortable with the use of the words ‘deterministic’ and ‘non-deterministic’ in this context.
im used to how these words are used in programming and i understand what it means in that context, and it doesn’t mean coordination, it means repeatable, predictable outcomes for any given function or algorithm.
maybe i need to get used to it… i’ve modelled grid energy transition in a deterministic way at a high level of aggregated demand for 8760 hours per year. :-)
I about pulled my hair out over the characterization of embedded chips and software as having no significant costs to the consumer for common household devices. I have lost count of the number of people I know who have had to replace a refrigerator after a few years because the electronics can't be diagnosed/fixed for features they have never used, even though there is nothing wrong with the hardware. Others have had to replace (at great cost) the "entertainment system" in their car, because the GPS system (which is integrated) broke, even though that system was not activated on their model. I can easily imagine a cold night coming when the heating system on your house is in standby mode, waiting for the right price, and nobody can get it to override, even when the temp inside is dropping.
Dynamic Pricing seems like the opposite problem. Why would a for profit corporation (utilities) give a crap about setting prices fairly when they can just continue to buy the elections of corporate commissioners and increase prices with whatever algorithm?
With no competition, there is no reason for a corporate utility to provide fair buy back rates nor charge fair rates in general. I would understand this kind of system only with publicly owned utilities.
With the internet or “IT” terminologies we pay a given internet provider, if we’re not happy with that price, we go with another provider, like fiber or some other option. We don’t have dynamic pricing based on what kind of movie we’re streaming nor website we visit. (Should we be charged more for Substack than twitter because someone paid regulators to vote that way?
If I wouldn’t accept it for my search engine, why should I accept this for how or when I use energy?
Why can’t utilities simply build out extensive utility grade energy storage (regardless of tech used) to gain surplus value from solar production? They are already benefitting off homeowners investing in building “utility infrastructure” in the form of solar generation and small energy storage systems that offset the need to develop and build more peaker plants.
Lastly, I also think of Texas, when they had the severe storm and suddenly customers received bills for thousands of dollars because the grid was collapsing and the grid operator and utility services decided to charge exorbitant rates because they could take advantage of people when they needed energy the most.
We need to stop pretending that utilities have some kind of moral backbone and instead regulate them heavily.
"Utilities should set prices for all of their considerations" Notably missing from the list of considerations was "profit". Most utilities want to optimize profit (within the constraints of their regulators), and the way to do this is to increase the expenditure of capital to expand grid capacity, which they then earn a percentage on. It can't be left in the hands of the utilities--it probably requires legislative mandates.
I love the idea of pricing to regulate demand (that's what we're about to get in the most brutal fashion in the oil and LNG market if Hormuz remains closed), and especially that the consumer captures the value of the equipment he/she has installed rather than the utility or a middleman.
One thing a VPP with enough scale might be able to do is induce manufacturers to produce the right equipment--an outdoor battery with inverter/charger in the 10kWh to 15kWh range for under $2,000. With hundreds of thousands of installations, this might be achievable with present technology. Without that large market we might be left with the $7,000 Tesla unit (which is not fully outdoor rated).
Check out https://www.amber.com.au/
This future is already here
What Amber does is a really interesting comparison to this proposal.
For those not in Australia, the eastern states operate a unified grid called the NEM (National Electricity Market). Each state within the NEM has a spot market which generators bid into, at 5-minute intervals. Of course, a lot of energy doesn’t trade on the spot market as it’s the subject of long-term contracts between generators and retailers (some of whom are one and the same companies); however, the NEM spot market heavily influences the price consumers pay.
Amber is mainly intended for customers with rooftop solar and batteries. Amber customers pay a fixed monthly fee on top of a fixed network access charge; they can then buy and sell power into the NEM spot market. Amber integrates with some of the home battery systems and will attempt to optimise the trading of power to maximise your returns, based on its ability to guess what the spot market will do (ithe market mostly follows fairly simple patterns, the most obvious being that spot prices increase in the evening pea).
Like the model discussed in the pod, prices are dynamic, and more granular in time, but they aren’t local, each state has hundreds of thousands to millions of customers, and covers pretty huge geographic areas.
However, the really big difference is that rather than being published in advance by a monopoly buyer and seller, these prices are the result of an actual market with sellers competing to supply the demand. If the price is fixed in advance, there’s no opportunity to respond to events. A truly dynamic pricing regime would allow prices to increase if everyone turns their EV charger on, for instance.
So while the broad thrust of this proposal - to use pricing as the mechanism to balance supply and demand across a distribution grid at a variety of scales - makes perfect sense, I’m not sure that fixing the prices in advance is the best way to respond to events.
I agree with Bruce that in general dynamic prices would result in lower prices most of the year and especially for customers who invest in smart assets like batteries. He mentioned a capacity constraint as an aside. During grid emergencies price exposure for most customers could result in catastrophic electricity bills. This is what happened to Griddy in TX following Winter storm Uri: https://en.wikipedia.org/wiki/Griddy_(company)
I want to understand how Bruce thinks about the role utilities play in shielding customers from this kind of volatility to provide more stable prices. I think this dynamic prices initially will help larger load customers who are very prices conscious and price responsive long before most residential customers adopt.
My core question that I wish Dave asked: How would you deal with prices during grid emergencies?
I listened to this while on a long drive last week. Thank you to David and Bruce for this discussion! Now to my comments:
The "prices vs. VPPs" IMO isn't the right way to frame this discussion. It's really about energy vs. capacity. What Bruce describes is an energy market selling kWh (like ERCOT). What is called a VPP is trying to manage capacity, selling kW (like most other markets.) These are related, but distinct quantities.
Capacity is dispatchable and can be planned for, but must be actively coordinated. Energy does not need active coordination, but also is not guaranteed and cannot be planned for. This has profound implications for infrastructure planning (and the accompanying costs.)
I disagree with Bruce's statement that VPPs (capacity) are only good for emergency programs. They are currently being used in a number of ways to take the place of centralized power plants, to relieve congestion, and defer infrastructure that aren't based on emergencies and cannot be addressed through energy prices alone.
Also, while I recognize the challenges with existing VPP programs that Bruce mentions, most of them have to do with program design rather than the nature of distributed capacity. Most VPP programs evolved from industrial Demand Response programs, and retain many vestiges that cause issues for customers (direct control of single devices, for example.) Dynamic energy pricing is relatively new and doesn't have to contend with that legacy. It is certainly possible to design a capacity-based VPP program that provides the customer choice and ease of use that Bruce argues are advantages of the energy-based approach. (e.g. publish a price for capacity and allow customers to participate and respond accordingly.)
As for "platforms", energy-based dynamic pricing programs will also require them. How else is a customer to optimize between devices? Few customers will want to do this themselves, so service providers will inevitably step into this role, just like the platform providers currently do for capacity-based programs. Furthermore, the podcast discusses using dynamic pricing to influence customer behavior, but doesn't spend much (any?) time discussing how those prices will be determined. There will need to be some sort of market mechanism to set the price. This will inevitably require an entity to manage a customer's participation in that market - again, requiring a service provider "platform" to step in.
Both energy-based and capacity-based pricing have roles to play in the electricity system. While the details may be different, both approaches have a similar technology and value stack with comparable overall costs. This isn't an either/or discussion - we will need both approaches in order to scale a distributed grid.
I’m not sure what Bruce means when he says Comed doesn’t have the price server in Illinois he is talking about. Maybe there are features missing that he’d like to see. I use this to control charging my EV, cooling my home and heating my water, and turning off unnecessary electronics. I use Home Assistant to control it all.
https://hourlypricing.comed.com/hp-api/
I'm the CEO and Cofounder of Cala Systems. We design, manufacture and sell an intelligent heat pump water heater (HPWH).
Water heaters are mentioned 13 times in the pod with the message being that today's water heaters are ready for 'prices to devices.' I respectfully disagree. Today's water heaters lack awareness of each home's hot water usage patterns; the controls are based on the tank temperature at a given moment; they lack the hardware (variable speed compressor, mixing valve) to adequately execute on better data and better control strategies. Cala was founded to address these gaps and in doing so to realize the full potential of HPWHs to integrate with people's lives, their homes, and the electric grid.
The scale here matters: home water heating is 4% of U.S. energy use -- more than aviation. If fully electrified with HPWHs, the 125 million residential water heaters in America could shift over 340 GWh per day -- the equivalent of 140 one-hundred MW data centers.
With respect VPPs / demand response, I worked at EnerNOC, the DR pioneer and leader in the 2000's, for six years. Here's my first point: real-world access to VPP/DR/Price Signal for home water heaters is rare right now. We've got a long, long way to go.
More generally:
- Price signals are fantastic and there is enormous opportunity to increase their use. The goal should be fully dynamic prices, as Bruce describes.
- DR/VPPs can add real value in the following situations:
(1) Addressing technical complexity, as with frequency response. Bruce cites this.
(2) Firming the 'product' -- if the market is seeking 100 MWs of delivered capacity, the aggregator manages the statistical variation in fleet. In this case, the aggregator is literally aggregating smaller resources into a larger one with the characteristics the market is seeking (consistency, etc.).
(3) Being a counterparty -- if the market wants a responsible market participant that will, say, accept penalties for nonperformance, an aggregator will take this on, but individual sites typically won't.
None of these value-adds take away from their point that price response is a key tool. Its use should grow enormously over time.
In addition to the drawbacks VPPs/DR that David and Bruce discuss, I would add that VPPs/DR often involve measuring energy use that didn't happen -- a counterfactual. This is an additional source of complexity.
As a California resident I was gratified to learn that this is in the process of being stood up and tested. Last year's legislative session produced a bill to push VPP's forward that was vetoed by our governor. The idea that VPP's are not the be all and end all of increasing grid efficiency and lowering cost is heartening.
The idea of how "pricing" would work seems a bit unrealistic in that consumers don't think of the value of some outcome in terms of price. We want a hot shower and a cold beer and enough power in our car to get thru the day ahead. Much like the new "smart" thermostats take our vote on what temperature we desire, our home controller will probably be an AI that learns our patterns and desires and ultimate desire to keep our electricity bill in some bounds.
On the utility end of things, they will likely have an AI that is trying to learn how all of the home systems react to price signals (and weather and calendar related signals) to be able to extract the desired optimal operation of the grid. Out of this I could see where a grid substation that is easily overloaded would require higher price signals to deliver the headroom needed at that location. This could also be used to point to where upgrades are most needed.
It's an interesting time to be alive.
"Don't put digital paint onto 19th-century electricity technology" is the line. The pricing argument lives at the utility-retail layer. Can this work without buy-in from the RTOs and FERC?
We have been running dynamic network pricing in Australia for quite a few years now. You can read more about it here - https://www.ausgrid.com.au/About-Us/Future-Grid/Project-Edith
I started listening on my way home from work, and I wasn't sure I finish. Glad I did.