California is facing three major challenges in electrical grid operation: renewable
overgeneration, steep evening ramping, and growing peak demand. The state has identified
dynamic retail price response as a key strategy evidenced by CPUC’s Dynamic Rates proceeding
and CEC’s Load Management Standards. Furthermore, the CEC launched a $16M “California
Load Flexibility Research and Deployment Hub (CalFlexHub)” administered by Berkeley Lab to
accelerate price-response flexible load technologies in buildings and EV charging.
There are more than 16 laboratory and field demonstration projects in CalFlexHub, each
demonstrating innovative automated price-response technologies. CalFlexHub tests various
pathways through which hourly price signals and triggered control commands are communicated
to load-flexible devices such as smart thermostats, heat pumps, water heaters, and EVs. We
identified seven unique communication and control pathways, which involve combinations of
third-party cloud, device OEM’s cloud, building central gateway, and local controller in between
the price server and the load-flexible devices.
It is important for utilities and policy makers to understand the long-term implications of
each pathway in designing future programs and creating related policies and mandates for market
transformation. We propose an evaluation framework including the following aspects:
In this paper, we identify emerging business models associated with each communication
pathway and discuss their positive features and challenges from the above aspects.