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:
- Functionality: connectivity and uptime, resilience, and optimization;
- Customer experience: simplicity in setup, troubleshooting support, continuity,
customer choice, first cost, and ongoing cost; - Business model and scalability: advance interoperability, holistic solution, bridge
unique gap, customer base, and value streams and pricing structures.
In this paper, we identify emerging business models associated with each communication
pathway and discuss their positive features and challenges from the above aspects.