PNNL

Abstract

This article explores the use of electricity rates for the control of a VPP’s flexible energy resources. It further explores how electricity rates benefit the electricity customer and electricity supplier. Avista Utilities of Spokane, Washington, commissioned Pacific Northwest National Laboratory, a U.S. Department of Energy’s research laboratory, to evaluate its Eco District campus’s performance under three alternative electricity rates. The Spokane Eco District has all-electric, commercial-scale buildings and abundant flexible energy resources, including battery energy storage, photovoltaic energy generation, and both water and phase-change-material thermal energy storage. Dynamic Eco District energy usage was modeled using available 2018 environmental data, and a valuation model was constructed to estimate Avista Utilities’ corresponding hourly marginal unit costs of supplying electricity to the Eco District throughout that year. Simulations were conducted while presuming that the Eco District would control its flexible energy resources to minimize its electricity costs under the given electricity rates. The impacts of three different electricity rates are compared: • Conventional large commercial energy rates, plus demand charges • Conventional large commercial energy rates and demand charges, plus an option for the VPP site to sell its electricity generation at wholesale market prices • Dynamic hourly transactive energy prices that were designed to reflect the utility’s dynamic