Toby Considine on Retail Electricity Issues

Lynne Kiesling

Toby Considine is a must-read on the conceptual issues underlying this challenge: how do we use communications technology and data standards at interfaces to enable decentralized coordination and emergent order in electricity distribution and retail electricity markets? Seriously, he’s been my go-to guy since I met him at the GridWise Architecture Council constitutional convention back in 2005.

These days he’s dialing in on a really important point that I drove home in a more academic way in my book: how do these technological capabilities enable us to have electricity distribution and retail electricity markets that are self-organizing systems?

Toby has three posts up right now that just nail these issues, and I strongly encourage you to read them if you are interested in electricity policy, environmental policy, smart grid, emergent order, self-organizing systems, and/or technological change.

1. Collaborative energy: smart grid and smart buildings. One thing I really like in this post is how Toby turns the traditionally engineering control question into one of individual human preferences, human-centric and service-oriented: “Today’s intelligent thermostat makes the occupant think about the building. The occupant should tell the building what his activities are, and what quality of service he expects. The thermostat, then, should optimize service [comfort] delivery as well as economic performance on its own.” He also does an excellent job of pointing out why we should already be thinking of and designing for a world of ubiquitous plug-in electric vehicles, and he frames this as an evolutionary pre-adaptation.
2. Scheduling our things, scheduling our lives. The physics of electricity distribution mean that timing is everything; if we are going to continue using the existing distribution network as it is currently configured, then three things are really, really important — price signals to indicate relative value at time t and transactive devices that can respond autonomously to those signals, algorithms and devices that can schedule actions reliably, and the continued attention of a system operator as a backstop to ensure balancing, stability, etc. In this post Toby does an awesome job of highlighting how better scheduling of actions, combined with autonomous, transactive devices, can improve building efficiency, reduce costs, reduce energy use, and not impair service quality or comfort.
3. Energy collisions and autonomous appliances. This post reflects some of the most important creativity that can change our mindset and culture when we think about retail electricity transactions: “The appliance manufacturers have a more engaging vision, in which they can compete as to how well they engage the consumer in better energy decisions. … The appliance manufacturers know how to do this already. They are starved for information. They want not only information about the price now, but predictions about price in the future. They want to compete on how well they can communicate energy decisions to the consumer.” (emphasis added) Seriously, this post is one of the best articulations I have read of the retail electricity market as a self-organizing system.

I think if you read these three of Toby’s posts back to back, you will find yourself thinking differently about what types of value propositions and transactions are possible in electricity, and how the technology is enabling us to achieve emergent order in self-organizing systems. The primary barriers to those achievements are existing regulations that have become obsolete due to technological change, and the organized economic interests that want to see those obsolete regulations persist.

Oh, and Toby, in response to your question: “Too many energy suppliers are stuck on models of direct control. When they accept using prices, they want to use them to create direct control. (There is a name for this in Economics—drop me a line or comment if you know what it is…).” I’m not sure what you have in mind. I just call it hierarchical control to create an imposed order, to distinguish it from individual control that leads to decentralized coordination and emergent order. But I think you were looking for something more pithy than that …