Valuation of Transactive Energy Systems - Technical Meeting #2

Transcription

1 Valuation of Transactive Energy Systems - Technical Meeting #2 CHRIS IRWIN, RON MELTON AND JULIET HOMER Pacific Northwest National Laboratory Valuation of Transactive Systems Technical Meeting Taylor, TX September 29-30, 2015

2 Agenda Day 1 8:30 10:30 am GWAC business 10:30 11:00 am Transactive Energy Valuation Meeting Welcome, recap of previous meeting, scope and desired outcomes Chris Irwin, DOE Ron Melton, PNNL Juliet Homer, PNNL 11:00 12:00 am Transactive Energy Valuation Methodology Introduction and overview of methodology Don Hammerstrom, PNNL 12:00 1:00 pm Lunch and presentation: Distributed Energy Resources in the ERCOT Kenneth Ragsdale, Principal Market Design & Analysis ERCOT 1:00 2:00 pm Mixed panel discussion - Insights From Practitioners Moderated by Steve Widergren, PNNL Gordon Matthews, BPA Jeff Roark, EPRI Cynthia Wilson, U.S. DOE / EPSA Ron Bernstein, RBCG LLC 2:00 2:30 pm Group discussion Steve Widergren, PNNL 2:30 3:00 pm Value of Transactional Building Energy Systems Chad Corbin, PNNL 3:00 3:15 pm Introduce hands-on exercise #1 Energy and Building Services That are/are not Suitable for Transactive Systems Juliet Homer, PNNL 3:15 4:00 pm Hands-on exercise #1 Energy and Building Services that are/are not Suitable for Transactive Systems 4:00 4:45 pm Working group report out and group discussion Juliet Homer, PNNL 4:45 5:00 pm Day 1 summary and wrap up Ron Melton, PNNL 2

3 Agenda Day 2 8:30 9:00 am Day 1 summary Juliet Homer, PNNL 9:00 9:30 am Worked example of methodology Don Hammerstrom, PNNL 9:30 10:30 am Mixed panel discussion Predicting and Measuring Value Moderated by Steve Widergren, PNNL Al Galiunas, Navigant 10:30 11:00 am Group discussion Steve Widergren, PNNL Stephen Knapp, Energy Alternatives Solutions James Sherwood, Rocky Mountain Institute 11:00 11:15 pm Introduce hands-on exercise #2 Insights About the Ideal Transactive System Valuation Ron Melton, PNNL 11:15 12:00 am Hands-on exercise #2 Insights About the Ideal Transactive System Valuation 12:00 1:00 pm Lunch and continue hands-on exercise 1:00 2:30 pm Report out from working groups and discussion Ron Melton, PNNL 2:30 3:30 pm Summary and next steps Ron Melton, PNNL Don Hamerstrom, PNNL Chris Irwin, DOE 3:30 pm Adjourn 3

4 Background Project funded by U.S. Department of Energy Office of Electricity Delivery and Energy Reliability Office of Energy Efficiency and Renewable Energy Buildings Technology Office DOE views transactive systems as key enabler for engaging distributed energy resources (DERs) in both the electric power system and building energy management systems. About the project: Developing a valuation methodology for transactive systems When applied, the methodology will yield costs and benefits of alternative scenarios that can be compared or ranked Costs and benefits can be mapped to relevant stakeholders in order to understand impacts from multiple perspectives 4

5 Project Context Goals of transactive systems include: Providing a means for engaging and coordinating large populations of customer-owned, third-party or utility-owned distributed assets Use of transparent, competitive means Providing flexibility required by an adaptive, reliable, environmentally sensitive, and cost-effective future electric system In DOE s Quadrennial Energy Review (QER) energy priorities were developed. Valuation came down strongly as a priority. Many studies have attempted to determine the value of solar and other distributed energy resources (DERs) Existing valuation methodologies are not well suited for considering transactive/market-based resources Incorporating transactive into valuations is challenging Valuation methodologies are not consistent, repeatable and transparent 5

6 Project context, cont. Project desired outcomes Foundational methodology that adequately considers transactive systems, from both the grid and building perspectives Consider all relevant stakeholder perspectives Valuation methodology with broad applicability for: Those designing and conducting comprehensive energy valuations Those who want to compare valuation studies (and their methods) against each other 6

7 Previous Technical Meeting Held July 7-8, 2015 in Richland, WA Key purposes of meeting Exchange knowledge related to past and ongoing valuation efforts Receive feedback on initial approach Included individual presentations and working group sessions Organizations represented: Bridge Energy Group E3 Electric Power Research Institute (EPRI) ERCOT Navigant Consulting National Institute of Science and Technology (NIST) National Renewable Energy Laboratory (NREL) Northwestern University OATI Pacific Northwest National Laboratory (PNNL) QualityLogic, Inc. Rocky Mountain Institute (RMI) University of Washington U.S. Department of Energy (EPSA and OE) 7

8 Prior meeting - key takeaways Current valuation and resource planning methodologies don t consider temporal and locational value this is important! Heterogeneity of systems and associated value is a reality drivers/value vary by region and feeder; No one size fits all value Need for consistent, repeatable and transparent analytical processes Be able to compare studies on the same value basis Need same generally recognized methodology Value of resilience is important and difficult to quantify methodology should include resilience even if its clumsy and inadequate at first For IOUs, regulators establish whether utilities can recover their costs Case must be made to regulators Regulators need to be part of the conversation Important and hard-to-quantify value of increased customer choice and local control should be built into methodology Equity issues matter must consider impact on non-early adopters and those on fixed incomes 8

9 Key takeaways, cont. Transactive systems are not the only answer Ancillary services provided by smart inverters may be more readily achieved through equipment standards, than transactive markets Adoption needs to be part of conversation - if no adoption, no value Substantial value is derived through planning timeframe Capital budgeting priorities established through planning Distribution system (planning) is changing Current planning methods are limited Vendors are approaching utilities with new products/services methodology could objectively show which are cost effective Improved asset utilization and oversupply mitigation are valuable Platform and markets can create new opportunities and value Utilize tools already developed don t reinvent wheel Include more utilities in the conversation 9

10 Meeting purpose Desired outcomes - MEETING: a) Feedback from participants on how to improve applicability, design and uptake of methodology being proposed b) Information about established models or data sources that could be used in this project c) Agreement on basis of comparison of valuation methodologies 10

11 Methodology - Context Valuation methodologies have been developed by others Some theoretical/concepts, others actual models For this project we reviewed: Lawrence Berkeley National Lab (LBNL) FINDER Model National Renewable Energy Laboratory (NREL) Integrated Distributed-generation PV Value Study (DGPV) Rocky Mountain Institute (RMI) EDGE Model Electricity Policy Research Institute Integrated Grid Framework Navigant Smart Grid Regional Business Case for the Pacific Northwest Utility Integrated Resource Plans (IRPs) Noted similarities, differences and innovations 11

12 LBNL s FINDER Model Source:

13 NREL s vision of a comprehensive, integrated distributed-generation PV value study 13 Source: NREL Methods for Analyzing the Benefits and Costs of Distributed Photovoltaic Generation to the U.S. Electric Utility System September 2014

14 RMI s EDGE Model Source: Rocky Mountain Institute; EDGE Model Progress Update; Spring 2014

15 EPRI s Integrated Grid Source: EPRI, The Integrated Grid: A Benefit-Cost Framework, Executive Summary, Feb 2015

16 Navigant Smart Grid Regional Business Case for the Pacific Northwest Source: Regional-Business-Case-2013-White-Paper.pdf

17 Source: PacifiCorp 2013 IRP available at Sample IRP diagram - PacifiCorp Phase 1: Case Definitions Phase 3: Optimized Portfolio Development, no RPS Phase 6: Monte Carlo Production Cost Simulation Phase 2: Price Forecast Development Phase 4: Selection of Resource to Meet RPS Phase 7: Top Performing Portfolio Selection Phase 5: Optimized Portfolio Development, with RPS Phase 8: Preferred Portfolio Selection 17

18 So What s Missing? Ability to value technologies or programs based on services provided in time and space Standardized way to represent valuation methods Transparent visibility of assumptions Harmonization of terminology among practitioners Extensibility to new situations and to introductions of new value streams Systems view that will be needed to evaluate transactive systems Clear baseline comparisons Clear mapping to an extensible set of stakeholders Organized repository for best valuation practices 22

19 Questions? 23