EnergyNet A Platform for Energy Transaction Settlements
Introduction EnergyNet is a software platform for energy transactions and customer engagement. EnergyNet works in harmony with all other Power Analytics offerings, such as DesignBase Xi for designing power systems and Paladin Microgrid Power Management System (MPMS). EnergyNet is a patented solution from our associated company, Causam Energy. Both Power Analytics and Causam Energy are recognized for innovative solutions for power and energy management and, together, have over 100 patents within the energy industry. It is the purpose of this paper to describe how the Power Analytics EnergyNet software platform fulfills the expectations of the New York Reforming the Energy Vision project, provides a significant array of benefits to electric distribution utilities, and gives grid-edge energy consumers greater access to information and control over their energy options. Power Analytics fully expects EnergyNet to become the platform standard upon which the North American electric energy industry will be restructured into an efficient, robust, reliable and resilient operational and financial infrastructure, capable of serving the needs of multiple constituents. Executive Summary The business model for the energy industry of the future has been outlined by the New York Public Service Commission (NY PSC) in its ground-breaking Reforming the Energy Vision (REV) project. The purpose of the REV project is to optimize the macro electric Page 2
energy grid by fully integrating grid-edge resources distributed energy resources (DER) 1, demand response (DR), energy storage, microgrids, community solar, and all other existing and potential grid elements 2. EnergyNet is a patented, comprehensive, turn-key software platform for optimizing the operations of the integrated grid, settling the financial transactions created by new and existing market participants, and providing energy consumers, suppliers, and equipment vendors with sophisticated, easy-to-use, Internet-based tools for advanced awareness of energy usage, options, and opportunities. For distribution utilities, EnergyNet offers four key benefits: (1) Grid optimization through the seamless integration and use of grid-edge elements; (2) Cost savings through a more efficient and accurate transaction settlement process; (3) Revenue generation through better market segmentation and an online energy store full of energy options and opportunities targeted toward specific market segments; (4) Improved customer satisfaction and retention through enhanced consumer engagement. 1 DER is an all-inclusive term that refers to: Combined Heat and Power (CHP), solar photovoltaics, wind generation, diesel generators, battery storage, electric vehicle charging devices, etc. 2 The term grid element refers to all devices that are attached to the grid, both large and small, and all other tools that manage or control such devices. Page 3
For grid-edge consumers of all sizes, EnergyNet offers four key benefits: (1) Access to customized energy information about usage, pricing, options, and opportunities; (2) Recommendations from the distribution utility or other suppliers for energy savings, energy equipment purchases, financing, prepayment, etc.; (3) Improved payment process for any supply contributions the consumer makes toward the grid (e.g., immediate VISA like payment vs. today s net metering payment process); (4) Creation of a localized off-grid energy marketplace where grid-edge power suppliers can sell power directly to grid-edge power consumers, through community microgrids, solar PV, energy storage, etc. The EnergyNet platform enables all of these benefits plus more, as needs warrant and innovative options and applications are developed over time. The key to understanding EnergyNet lies in the software s ability to deliver real-time, two-way actionable communications to and from all energy market participants and every interconnected grid element. Secure Internet Protocol (IPV6) based networks are rapidly becoming the communications standard for virtually all messages to and from all energy market participants and every interconnected grid element, whether at the wholesale or retail level. Secure IP networks, like those already in operation by the major telecommunications carriers (AT&T, Verizon, Sprint, etc.), can carry the messaging necessary for electric grid operations, financial settlements, and an open and transactive online energy marketplace. Page 4
For grid operations, two-way IP networks will replace the one-way, private synchronous time division networks (TDM) which are still in use by most electric grid operators for all command, control, measurement and verification activities (balancing load and supply, Volt/VAR, frequency regulation, substation automation, distribution management, demand response, SCADA, etc.). For electric financial transactions, two-way IP messaging will be used to settle transactions in near real-time, much like VISA or American Express are able to transfer funds for goods and services at the point of purchase. In this instance, however, the point of purchase or sale is the electric meter. For the open and transactive online energy marketplace (or energy store ), twoway IP networks will allow energy suppliers, consumers, and equipment vendors to better interact with each other, to view energy usage patterns, to gain insight to various options and opportunities, and to exchange needs, recommendations, offers, and contracts. EnergyNet - Overview EnergyNet is a sophisticated software platform which facilitates real-time electric energy grid operations, near real-time financial settlements, and an Internet-based energy marketplace for consumer engagement. In simple terms, it makes sure the electric grid operates as it is designed to operate, that every energy buyer and seller gets paid quickly and accurately, and that all market participants have greater awareness of energy options and opportunities. Page 5
EnergyNet is sold as licensed software and is generally operated as a hybrid software-asa-service (SaaS) via a combination of NERC CIP V5 physical data centers and a secure, anonymized private cloud. EnergyNet is a scalable solution that can handle high volumes of grid-edge operational and financial messaging; and, it can be quickly deployed as an over-the-air upgrade across a distribution utility s advanced metering infrastructure. EnergyNet s Three Major Capabilities Optimizing Utility Grid Operations. EnergyNet provides recommendation, command, and control interfaces for distributed energy resources (DER) which participate in the power markets. It also interfaces with entities capable of curtailing their energy usage through demand response (DR) when needed. After registering each DER/DR grid-edge device as a supplier to the local utility grid, EnergyNet can receive and send start and stop messaging to and from a distribution utility s control center. EnergyNet can measure and verify the amount of power (or demand response) transferred from one market participant to another and can aggregate multiple DER assets into blocks of power (or DR negawatts ) for easy participation in the power market. EnergyNet can also assess grid operations such as energy flows, stabilization, Volt/VAR, frequency regulation, reserves, capacity, and other components of overall grid optimization. The unique feature of EnergyNet, over all competitor products, is that it works over any network transport (broadband, 3G, LTE, private networks); with any vendor s equipment (solar PV, wind generators, storage, electric vehicle chargers, HVAC, thermostats, etc.); on any application (DER, microgrid, DR); with real-time, two-way communications capability. Page 6
EnergyNet makes the power grid operate at its optimal level, as a single machine as required by the NY REV, incorporating every registered DER and DR grid-edge device as it is needed. Financial Settlements. EnergyNet is like VISA for the energy grid. It reduces the time required for energy settlements and improves settlement accuracy, thereby reducing overall costs for the distribution utility and all other market participants. EnergyNet captures, calculates, and routes each energy transaction for settlement in near-real time (one to two days for 90 percent of all transactions). EnergyNet captures revenue-grade energy usage data at the metered transaction point (when and where the purchase and sale actually occurs), aggregates it for any necessary reconciliation and/or payment approval by the buyer/seller, and routes it to a designated national bank, or other payment clearing house, which debits/credits the buyer/seller account as appropriate. EnergyNet provides financial integrity, cyber security, an accurate and verifiable audit trail, and a dramatically shortened payment cycle. For the distribution utilities, EnergyNet can reduce working capital requirements, credit risk, disputes over distribution line losses and transaction accuracy, and general administrative overhead. EnergyNet enables New York s distribution utilities to create a standardized, single and uniform market platform across New York, as required by the NY REV. Open Transparent Marketplace. EnergyNet takes the existing utility-based Internet presentation of consumer energy usage information to a whole new level for all market participants distribution utilities; commercial, industrial, and residential consumers; vendors of energy equipment (such as solar PV, energy storage, EV charging station, HVAC, energy efficient appliance manufacturers, etc.) by creating an open marketplace an energy store with unlimited expansion potential. This aspect of the EnergyNet Page 7
platform is like Google for the energy industry the information it will provide is limited only by the imagination. The EnergyNet marketplace will become the go-to website for information about energy usage and patterns, bill presentation, energy-saving recommendations and opportunities, offers to buy or sell energy, capacity, or ancillary services to and from the distribution utility and, eventually, to and from grid-edge consumers. Vendors will be able to advertise their products and services on this website. Distribution utilities, and possibly other vendors, will be able to see, in an aggregated anonymous format, what products and services interest consumer market segments. Such awareness can improve targeted marketing efforts, consumer satisfaction, and customer retention. With consumer permission, EnergyNet can also dive behind the meter for assessment and analysis of energy activities and usage typically hidden to the distribution utility. The purpose of this capability would be to enable consumer-requested energy assessments, efficiency recommendations, automated demand response, etc. The future capability of the EnergyNet platform is unlimited. Power Analytics has opened the EnergyNet platform to all potential application developers who may create new, unanticipated offerings for the distribution utilities, grid-edge consumers and their devices. These offerings will become a standard part of the EnergyNet marketplace and will be offered in an app store that anyone can browse for various software applications that meet their particular needs. Page 8
How EnergyNet Meets the Requirements of NY REV On February 26, 2015, the New York Public Service Commission (PSC) issued the order initiating a regulatory policy framework and implementation plan called Reforming the Energy Vision (REV). In this order, the PSC noted that the power grid is best thought of as a single machine, where each customer premise and every power consuming and producing device found at the edge of the grid is a part of that machine. The goal of REV is to establish markets where suppliers and customers at the edge of the grid can become integral to the planning, management, and operation of the macro power grid. This new transactional energy marketplace will optimize all system resources distributed energy resources, weather-dependent solar and wind renewables, storage, demand response, energy efficiency, etc.--while compensating each participant in a fair and market-driven manner. In order to achieve this new energy marketplace, the PSC and all REV collaborators recognize that the existing energy industry structure, operations, communications, and data management capabilities require significant modernization. 3 The Power Grid as a Single Machine. The REV requires that the New York distribution entities become Distributed System Platform Providers (DSP) to act as the interface between retail-level customers, aggregators, and the distribution system; and, the wholesale-level operations of the New York Independent System Operator (NYISO). The functions of the DSP fall into three categories: integrated system planning, grid operations, and market transactions. In order to fulfill the role of a DSP, the distribution entities will need software solutions that provide the functionality of a power model, a 3 Paraphrased from the NY PSC Reforming the Energy Vision, Final Order, February 26, 2015, pages 11-12 Page 9
secure communications network, revenue-grade metrology, and digital consumer engagement. The Power Analytics EnergyNet platform is the only patented software that fully meets all three objectives of the NY REV project. Integrated System Planning. As a market enabler, the DSP will continue to have responsibility for distribution system planning and construction. However, the planning process must also support the development of grid-edge DER alternatives that meet current and future system requirements. The DSP will annually file a multi-year plan with the PSC that contains, among other things, a proposal for capital and operating expenditures to build and maintain DSP functions, as well as the system information needed by third parties to plan for effective market participation. The EnergyNet platform enables this function through its capability to model, edit, optimize, and monitor complete energy systems of any size on premise, on the distribution network, and at the point of interconnection. Grid Operations. The DSP is situated between the wholesale and retail markets. The DSP will integrate DER into the current electricity delivery system. Distribution utility grid operations will then incorporate DSP market commitment and performance data into utility planning and operations to allow for an optimized, secure and more flexible power system, balancing supply and dynamically controllable demand side resources, including distribution-level ancillary services. DSP operations will include real-time load and network monitoring, enhanced fault detection/location, automated feeder and line switching, and automated voltage and VAR control. The DSP will commit and dispatch market-based DER and integrate net load impact information with distribution utility grid operations. The monitoring and dispatch of DERs will complement the increased use of intelligent grid-facing equipment such as sensors, reclosers, switched capacitors, and Page 10
voltage monitors. The EnergyNet platform enables this function through its ability to conduct real-time load-flow analysis, fault detection/location, automated feeder and line switching, and automated Volt/VAR control, by integrating with new or existing SCADA and control systems. Market Transactions. DSPs will establish a standardized, single and uniform market platform across New York. Prices and other geographically unique products can vary, both among utilities and within individual utility territories, but the conditions for market participation and even fundamental product terms must be uniform. This requirement extends beyond the common look and feel of customer orientation, into the technical protocols and market rules to which aggregators and service providers must conform. Standardization reduces the cost of entry to providers and multi-site customers. It also supports increased best practice transfer and the development of grid services, products, and applications that can be introduced across multiple utility territories. The DSP will coordinate the operation and market transactions of the grid-edge DER retail market and with the wholesale NYISO market. The platform must enable dynamic (real-time) pricing with signals flowing both to and from end-use equipment; and, the settlement of these transactions will generally require time-stamped usage data. 4 The EnergyNet platform enables market transactions because it can communicate in real-time with every end-use meter, using any communication network, and can effectively turn that meter into a revenue-grade point-of-sale terminal. 4 Ibid. Pages 31-35, 98. Page 11
Conclusion Power Analytics is excited to be a part of the NY REV project. We believe our EnergyNet software platform is the best possible solution for achieving the initiatives of REV. EnergyNet will enable utilities to optimize their existing distribution system through the incorporation of grid-edge elements into daily operations. It will also enable the quick and accurate settlement of the financial transactions generated by those grid-edge elements, and give all consumers and other interested parties an unprecedented access to energy information through the EnergyNet marketplace. We at Power Analytics believe that the creation of a local distribution platform for the integration of grid-edge elements is not only possible, it exists. The Power Analytics EnergyNet software platform has been designed to provide two-way communications capability to any grid element, across any existing network, for any application, and with any third party service oriented architecture. Once deployed, this flexible, scalable architecture will create the transactional energy marketplace where designated system operators, such as distribution entities or other as-yet-undefined entities, have a real-time line-of-sight to all available resources in order to balance supply and demand. For enduse consumers who have installed grid-edge technologies, it provides the chance to participate in the energy market, as both buyers and sellers. These participating consumers will have the capability to generate their own electricity, with stand-by power available from the macro grid if needed. These consumers will also be able to sell their excess electricity and energy-related services, such as demand response, back to the grid operator or to an intermediate aggregation provider. And, for all other interested consumers, the EnergyNet marketplace can provide the go-to website for all things related to energy. Page 12
What is extraordinary about the EnergyNet software platform is that it is capable of not only aiding the operation and optimization of the integrated grid, but also running a near real-time settlement application that benefits both the distribution entity and the end-use consumer. A faster settlement process, coupled with activity by multiple buyers and sellers, increases the velocity and efficiency of the market, and thereby reduces costs for everyone. In addition, the end-use data collected by the EnergyNet platform can be used for a wide variety of applications. In the long run, Power Analytics anticipates that the transactional energy marketplace will better align wholesale and retail electricity prices, an objective which has not yet been achieved and is considered necessary for an efficient energy market by most economists. By embracing the REV initiative and the cutting-edge, enabling EnergyNet platform, the New York utilities are pathfinders for the entire electric energy industry as it embraces a more effective and efficient business model, made possible by today s sophisticated communications technology. Page 13
Appendix A Software Screenshot Images A.1 Commercial and Industrial Building Owner dashboards, recommendations, and service marketplace. Page 14
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A.2 Market Segmentation and Consumer Engagement Dashboard for identifying opportunities and recommended targeting of premium services and equipment. Page 18
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A.3 Accounting daily settlement console for micro transactions of distributed generation. Page 20
Appendix B Software Platform Architecture Page 21