Project: Research and Development of Demand Response Dynamic Pricing and Optimization Mechanisms for Smart Grids Virtual Power Plant

REASON FOR THE PROJECT_x000D_Our existing Virtual Power Plant Technology called cyberGRID is already capable of managing incentive based Demand Response (DR) Programs. We see also a big market opportunity in the area of price based DR Programs. Therefore we want to upgrade the cyberGRID Solution with an innovative dynamic pricing module called cyberPRICE. _x000D__x000D_BACKGROUND_x000D_Most electricity customers see electricity rates that are based on average electricity costs and bear little relation to the true production costs of electricity as they vary over time. Demand response is a tariff or program established to motivate changes in electric use by end-use customers in response to changes in the price of electricity over time, or to give incentive payments designed to induce lower electricity use at times of high market prices or when grid reliability is jeopardized._x000D__x000D_ - Price-based demand response such as real-time pricing (RTP), critical-peak pricing (CPP) and time-of-use (TOU) tariffs, give customers time-varying rates that reflect the value and cost of electricity in different time periods. Armed with this information, customers tend to use less electricity at times of high electricity prices._x000D__x000D_ - Incentive-based demand response programs pay participating customers to reduce their loads at times requested by the program sponsor, triggered either by a grid reliability problem or high electricity prices._x000D__x000D_Limited demand response capability exists in the European Union today. EUROPEAN COMMISSION TASK FORCE for SMART GRIDS, has discussed at its 8th meeting on 28 February 2011 the results of the questionnaire, conducted by Expert Group 3, which highlight necessity of introducing time of use tariffs as a precondition for efficient demand response management. Flat, average-cost retail rates that do not reflect the actual costs to supply power lead to inefficient capital investment in new generation, transmission and distribution infrastructure and higher electric bills for customers. _x000D__x000D_THE BENEFITS OF DEMAND RESPONSE_x000D_The most important benefit of demand response is improved resource-efficiency of electricity production due to closer alignment between customers’ electricity prices and the value they place on electricity. This increased efficiency creates a variety of benefits, which fall into five groups:_x000D_- Participant financial benefits are the bill savings and incentive payments earned by customers that adjust their electricity demand in response to time-varying electricity rates or incentive-based programs._x000D_- Market-wide financial benefits are the lower wholesale market prices that result because demand response averts the need to use the most costly-to-run power plants during periods of otherwise high demand, driving production costs and prices down. _x000D_- Reliability benefits are the operational security and adequacy savings that result because demand response lowers the likelihood and consequences of forced outages that impose financial costs and inconvenience on customers._x000D_- Market performance benefits refer to demand response’s value in mitigating suppliers’ ability to exercise market power by raising power prices significantly above production costs._x000D_- Finally, and notwithstanding the primacy of its economic and security benefits, demand response may also generate important environmental benefits. First, demand response has been shown to deliver a net_x000D_reduction in consumption, directly reducing emissions. Second, it can compensate the intermittences of renewable energy sources and enhance their integration in to the European Energy Market. _x000D__x000D_PROJECT GOAL_x000D_The goal of cyberPRICE project is to develop set of activation, communication and evaluation protocols for a time of use tariffs, critical-peak-pricing and real-time-pricing as a more advanced form of pricing designed to increase the transparency between wholesale and retail markets, also known as dynamic pricing. Special emphasis is going to be on integration with retailers trading applications for wholesale monitoring and risk assessment and on communication protocols between Virtual Power Plant (VPP) and control systems at consumer premises. The price signal from the VPP should activate local demand response/energy efficiency strategies supported by consumers energy equipment control systems (for HVAC, lighting, water heaters, etc.) and smart appliances (like the fridge, washing machine, etc.) resulting in decreased demand._x000D__x000D_PROJECT CONSORTIUM_x000D_We formed a consortium of five companies in order to multiply individual expertise and knowhow of each P as well as enabling also small and start-up companies to be active in R&D topics to accelerate their growths and avail technology start-ups to open up new markets and improve their success chance by integrated development approach. The consortium already worked partly together and with this project the COOPERATION SHOULD BE EMPHASIZED and the communication and knowledge exchange is increased._x000D__x000D_

Acronym cyberPRICE (Reference Number: 6521)
Duration 02/11/2011 - 31/10/2013
Project Topic Our existing Virtual Power Plant Technology called cyberGRID is already capable of managing incentive based Demand Response Programs. We see also a big market opportunity in the area of price based DR Programs. Therefore we want to develop an innovative dynamic pricing module called cyberPRICE.
Project Results
(after finalisation)
The CO result is a cyberPRICE software module for managing dynamic pricing programs by electricity retailers. It is suitable for usage with the existing cyberGRID Virtual Power Plant solution or implemented independently as a stand alone dynamic pricing demand response solution.
Network Eurostars
Call Eurostars Cut-Off 6

Project partner

Number Name Role Country
4 Reiko projektne rešitve d.o.o. Partner Slovenia
4 XLAB razvoj programske opreme in svetovanje d.o.o. Partner Slovenia
4 Gerd Sumah - Sumah Business Solutions e.U. Partner Austria
4 CyberGRID GmbH Coordinator Austria