Transactive System Program Communication System Cost Model

Abstract

Transactive energy is an economics and controls technique that aims to dynamically manage the generation and consumption of electricity within the power system. Much research has been done in the area of demonstrating the capability and performance of transactive systems, as well as valuing the benefits a transactive system can provide. Significantly less research has been done in the area of estimating the costs of a transactive system. This work aimed to build a model that would estimate the costs of the communications system that would be necessary to support a transactive system and be realized by a local utility. Dynamic pricing, and a customer’s response to this pricing, is a key aspect of a transactive system; this would require a two-way communication system between utilities and customers. Since the system will vary based on many factors, the cost model was consequently designed for use in a wide variety of applications. The cost model requires some basic user inputs regarding the system being analyzed, such as location and size. The user also identifies one or more generic circuit models that best represent the system. Additionally, a user can, but is not required to, change assumed equipment and installation costs and equipment lifetime within the model. These inputs will result in 20 year cost estimates for three different communication technologies that are capable of supporting the bandwidth needs of a transactive energy system. The three communication systems included in the model are cellular, fiber optic and wireless mesh. Each vary significantly from one another and offer unique advantages and barriers. A cellular network avoids high upfront costs, but is limited to areas where there is coverage by the service provider and subject to the ongoing rate established with the service provider. A fiber optic system requires a large up-front cost, but it will provide a reliable system to areas where cellular and mesh may be unable to do so. Additionally, fiber provides more bandwidth than necessary for transactive systems and can offer additional business opportunities. A mesh system can be installed for less upfront costs than fiber and offers enough bandwidth to support a transactive system, but the ability to model this technology is done with less certainty than the other two options. The estimated costs include the communication system that connects the customers to their nearest substation, in addition to the smart meter and radio that would be required for each customer. The communications from the substation to the utility are not included in estimates, as the need for upgrading that system would be assessed on a case-by-case basis. Although the cost of the smart meter and radio is included, no other appliance specific cost is included in the estimate provided by the model. The communication system is a key aspect of the development of a transactive system. This work resulted in easily being able to estimate the costs of a communication system specific to the system being studied. This cost model will aid ongoing valuation and simulation work in the field of transactive energy.