Smarter energy markets: Another benefit of smart grids

One challenge in connecting more renewables to the grid is how to balance fairly predictable demand with the more unpredictable nature of on-and-off sources like wind and solar.

Beyond that challenge, though, is another one that doesn’t always get as much public attention: how to incorporate the impact of renewables into energy trading markets.

Making our power grids “smarter” and cleaner can affect energy trading markets in a number of ways. For one, by creating so-called “supergrids” that connect many smaller and more local grids, energy buyers and sellers will have a wider, more competitive market open to them … with all sorts of new implications for prices.

For example, the Tres Amigas SuperStation project being developed in the southwestern US will link three regional grids that until now have operated as virtual energy islands, with little electricity exchanged among them. Once in place (the project is set to begin early operations in 2015), those links have the potential to “revolutionize” US power markets, according to Tres Amigas LLC.

“The SuperStation’s ability to transmit, for the first time ever, significant amounts of power across the three main US interconnections will increase the value of regional transmission investments, both in place and planned, due to the newly created enhanced ability to use those assets,” the developer says.

Managing and selling all that power through a single hub will also make it possible, for instance, for energy-hungry cities on the East Coast to purchase electricity generated by solar farms in the Southwest. That could encourage more development of wind and solar in areas where local demands alone aren’t enough to justify further building.

Enabling such wider-reaching, more competitive energy markets will take wider-reaching, more advanced data sharing and analytical capabilities as well. Tres Amigas, for example, is partnering with Mitsui to help ensure its smart-grid system is backed with plenty of smart computing as well.

As Tres Amigas president, chairman and CEO Philip Harris has said, “Apart from the purely electrical engineering aspects of the project, the commercial operation of the SuperStation requires intensive use of information systems and technology, as well as management of large-scale infrastructure.”

The giant energy and infrastructure company Siemens also sees opportunity in support for smarter, more nimble energy markets. It announced today that it’s collaborating with IT services provider Atos to together develop integrated software for optimizing both power generation and energy trading. The joint development is “designed to significantly boost the profitability of power generation and trading by optimizing the bid creation and by providing a seamless data flow at IT level. This furthermore saves costs for integration and reduces the project risks.”

“The cooperation with Atos puts us in a position to offer our customers an IT solution that covers their entire value chain,” said Jan Mrosik, CEO of the smart-grid division in Siemens’ Infrastructure and Cities Sector. “At the same time, a single source of supply reduces the project risk significantly when introducing or exchanging tools of this type.”

The Siemens-Atos “joint Resource Optimization and Scheduler” (jROS) “offers a seamless data flow between generation planning and energy trading, allowing faster decisions to be made in the bidding process on energy exchanges and for bilateral trading.”