PriceSignalsandPriceResponsiveDevices

PriceSignalsandPriceResponsiveDevices - Prices to Devices:...

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Prices to Devices: Price Responsive Devices and the Smart Grid Contents 1. Executive Summary 2. Background 3. Nominal and Relative Information 4. Types of Price Signals 5. Control-Like Effects on Device Behavior of Price Signals 6. Requirements to Enable a National Plug-and-Play Market for HAN Devices Capable of Price Responsiveness 7. Implications 8. Appendix 9. References Ivan O’Neill
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White Paper Prices to Devices: Price Responsive Devices and the Smart Grid © Southern California Edison 2010 1 1. Executive Summary The Smart Grid promises to improve the quality, resiliency, and integrity of the grid through the optimization of the existing energy delivery infrastructure and integration of new renewable generation sources. A primary element of the Smart Grid is the enhanced communications capabilities that enable consumers to better manage their electricity consumption and costs via new smart appliances and devices located at the customer’s premises. These are commonly referred to as Home Area Network (HAN) devices. As Smart Grid communications systems open new opportunities for consumer participation, a variety of HAN stakeholders are defining the format and types of messages and signals that will facilitate energy awareness and empower consumers. Most important are the data signals that provide price information. Numerous studies have confirmed that consumers prefer energy information quantified in monetary terms rather than electrical terms like kilowatt-hours. However, while a nominal price signal of $0.13 per kilowatt hour (kWh) is useful for consumers, additional information is required to enable new price responsive devices that modify their behavior automatically in response to higher or lower prices. Price responsive devices are important because they offer their owners convenient and user-friendly management of energy use in a future where the retail price of electricity will more closely reflect the actual economic cost as it varies throughout the day. Price responsive devices require slightly different price signals than nominal price signals; they require relative price signals that use metrics such as high, medium, and low to convey the context of the nominal price and drive action. This white paper will inform HAN stakeholders of Southern California Edison’s HAN research and development work in concert with HAN device suppliers to develop price responsive devices. The intent of this paper is to: Define the types of price signals (e.g., nominal and relative); Review the methods for determining relative price signals;
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White Paper Prices to Devices: Price Responsive Devices and the Smart Grid © Southern California Edison 2010 2 Highlight the regulatory and policy requirements for establishing a national market for HAN devices; Discuss the technical and behavioral implications of providing price signals; and Inform ongoing Smart Grid policy and standards discussions in the United States at the federal and state levels.
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This note was uploaded on 02/14/2011 for the course EE 20101 taught by Professor 30691 during the Spring '11 term at USC.

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PriceSignalsandPriceResponsiveDevices - Prices to Devices:...

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