September 2009

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The price of energy

You cannot understand price unless you understand the product you are buying.

Toby ConsidineToby Considine
in Markets and Innovation,
Smart Grid, Standards

Article originally appeared on The New Daedalus

Contributing Editor

It was a busy week at the smart grid SDO conference. I was working with three of what the smart grid roadmap ( calls Priority Action Plans (PAPs). These action plans are schedule, price, and messages for Demand Response (DR) and Distributed Energy Resources (DER). The technology of the grid is harder, and riskier, but these standards are what will give them a path to market. These standards will define the competition to make products in the end nodes of the grid. By the middle of next year, we will have three key standards out of this process.

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Two of these standards are components. These standards will live inside other communications. Because these components will be common to many domains, meaning they will be inside business and buildings as well as in the grid, they will be much more useful than if they were built as one standard. These components are schedule and price.

Readers of this blog know that I have long wanted a WS-Calendar. WS-Calendar will be the web service form of ICalendar. ICalendar is used to exchange schedule information with others. When you go to a travel web site book and click on “Add this to my Calendar”, you are using ICalendar. When I invite you to a meeting and you click on the attachment to add it to your calendar, you have used ICalendar.

Schedules coordinate behavior between people. Web services schedules can coordinate behavior between business processes. Smart energy coordinates activities between energy supply and energy demand, including building systems and business processes. A web service for schedules can flow across domains, and be understood by each. The Calendar Consortium ( has committed to delivering an ICalendar for web services by year’s end.

You cannot understand price unless you understand the product you are buying. You can have commerce with any product, but standards make markets. For electricity, a product may have other characteristics such as source (wind or coal) and regulatory burden (carbon offsets). Mike Oldak of the Edison Electric Institute (EEI) calls these attributes terms and conditions, because they define the power contract. Schedule is also a part of the electrical product; power delivered at 2:00 am is worth much less than power delivered at 2:00 pm. Price and product must go together.

Product definitions need to be machine readable to really change the way we interact with the grid. Nearly everyone who has anything to do with electricity delivery, from policy to substation has agreed to work together to define the product. The North American Energy Standards Board (NAESB), is taking the lead on defining the requirements. NAESB will work with the utility stakeholders to define the characteristics that are relevant to markets.

[an error occurred while processing this directive] OASIS will take the product from NAESB and create an open standard for communicating price information in the Energy Market Information Exchange (EMIX) Technical Committee (EMIX). The EMIX TC will also incorporate the WS-Calendar specification from CalConnect when it becomes available. It is our goal to define a message that can be used throughout the grid, from the generator to the home. OASIS will then work with NAESB to bring the standard back into the business process and regulations of the grid. The EMIX TC is now in formation, and you can read the proposed charter at the link below. Contact me if you would like to join.

Some of you know the Energy Interoperability TC, already underway. The Energy Interoperability TC builds upon the work of the OpenADR (Automated Demand Response) specification. The Energy Interoperability TC blurs the distinction between DR and DER by communicating information about prices now, and anticipated prices in the future. To the grid, at some level, it is all the same whether I turn off the lights, run off a battery, and fire up a generator when I get a message to reduce demand. The Energy Interoperation TC will deliver market information (price, product, and schedule) to the end nodes (Industry, commercial buildings, and homes) of the grid. The Energy Interoperability TC has been meeting for a month, but you can still join it, too. A link to its charter is below. When its work is done, it, too, will be submitted to NAESB and the IEC.

Drop me a line to learn more or need help to join one of these committees.

Article originally appeared on New Daedalus ( 



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