Markets and Service Providers Tackle Critical Challenges and Developments

By Panayiotis (Panos) Moutis

Whether navigating public policy initiatives, figuring out how to utilize demand side management (DSM), or deciding how to implement electricity solutions in developing countries, markets and service providers face a myriad of challenges. In the August issue of the IEEE Smart Grid Newsletter, contributors explore a few of those challenges and how researchers, policy makers, and stakeholders at large answer them.

The smart grid, as it has been implemented, studied and so far promoted, is not and will not be an end-goal, but an ever-adapting and ever-evolving process. This process seeks to facilitate the deployment of diverse resources and capabilities that aim both at reducing negative environmental effects and procuring multiple savings for all stakeholders involved. A critical question that relates to these efforts is how and through which entities smart grid applications might be realized in modern power systems.

To this end, market and service providers in the actual power systems, firstly, enable and, secondly, strive to enhance tools and methodologies that serve the aforementioned targets. These providers set as their main objective the optimal operation of the grid. “Optimal” refers not only to the economics, but also to the reliability, quality, and service concerns that arise in the complex and diverse framework of a power system. In this sense, the service providers are the entities that ensure the proper operation of a given electricity network, by ensuring that energy is not only served from the producers all the way down to the end-customers, but also at the more efficient way possible.

Since a power system ranges from the primary sources of energy (fuels, renewables, etc.) all the way down to the end-customer power quality satisfaction, it is clear that system operators (market and service providers as mentioned earlier) are not able to single-handedly introduce and sustain smart grid paradigms. Policy makers, capital, manufacturers, customer associations, and end-users have all a part to play in the smart grid both as participants and as driving forces. The macro-system shaped by all these diverse entities has a high-level cardinality that may not be simplified. The complex relations among the stakeholders and their often-competing interests and objectives need to be identified, mapped, and handled, so to avoid missed opportunities and shortcomings in the process of making the grids smarter.

The contributors to this monthly issue of the IEEE Smart Grid Newsletter have managed to offer crucial viewpoints that cut across numerous parameters mentioned above. Their perspectives pose the following questions and challenges.

How do markets and service providers integrate public policy initiatives with wholesale electric market design while remaining competitive?

• In the United States, several independent system operators and regional transmission organizations are starting or supporting initiatives that will help harmonize public policy initiatives with wholesale electric market design: California ISO, ISO New England, PJM, and New York ISO. All four are taking different approaches, which makes maintaining competitive electricity markets a challenge. Therefore, it is necessary to study any market design changes before they happen.

Are residential sectors realistically suitable for utilizing DSM? Or do non-residential sectors -- particularly large manufacturers -- offer greater opportunities?

• DSM has been unsuccessful in many regions across the US, but it can deliver solutions if applied to non-residential consumers. First, investments must be made in intelligent automation tools, consumer education, policy changes, advanced smart-metering technologies, and more.

How might low-voltage direct current (LVDC) bring relatively inexpensive electricity to developing countries?

• According to the International Energy Agency’s World Outlook 2016, 1.186 billion people around the world lack electricity. It is expensive and perhaps unrealistic to fund and build electrical infrastructure in underdeveloped countries, but small, independent systems based on LVDC power -- like solar photovoltaic panels -- provide an inexpensive solution. The IEEE is fostering LVDC in regions like African and India through the IEEE Standards Association Industry Connections program and the IEEE Smart Village. It is also creating standards that enable LVDC systems.

Contributors