Good morning everyone. Welcome to our Decarbonizing the Grid Workshop series offered by Stanford, Bits and Watts. Today, we are going to talk about coordinating demand side flexibility. And then on April 28, we'll have the last webinar on reaching 80% clean electricity by 2030. So, I would like to welcome today our panelists. We're going to have Diane Greenwich from the pre-court, a pre-court energy scholar and the Schultz-Stephenson Energy Policy Task Force participant, Ram Narayan Amurthy, a program manager in advanced buildings research program at the Electric Power Research Institute, Fabio Genoese, a task force chair on demand side flexibility at ENTIL, E and Heads of Strategy at Turner, and Gerda De Jong, issue manager system operations at Tenet. Our panelists cover the whole gamut from policy to buildings, system operator and utilities operations. And we will be discussing what does it take to scale up and integrate demand flexibility as a true resource in support of grid decarbonization. I'll give a brief introduction to the topic and some of you might be familiar with what we're talking about.  So, what are distributed energy resources? DRs refer to different types of small-scale electric devices and appliances that can generate electricity such as rooftop solar. They can store electricity such as the Tesla power wall and whose energy consumption can be flexibly reduced or shifted such as EV chargers, HVACs, water heaters and large industrial fans as shown here in the figure. Existing decarbonization pathways identify renewable generation DRs and energy efficiency as very critical resources. It is predicted that global solar and wind energy penetration will rapidly increase from 22,300 terawatt hours in 2019 to 45,000 terawatt hours by 2050. DRs will represent a large and rapidly growing resource with 3,000 terawatt hours of distributed solar and storage by 2050, 1,290 terawatt hours of energy consumed by electric vehicles by 2040 and in addition several hundreds of terawatt hours of flexible loads being added to the system. Energy efficiency is expected to be responsible for 40% of the emissions reductions and we talk about energy efficiency measures, we're talking about adoption of better appliances and weatherization. How do DRs actually impact the grid? DRs are located behind meters of electricity consumers such as homes, commercial buildings and EV charging stations as shown here in the figure on the distribution network side of the grid. The electric grid was originally built such that electricity flows in one direction from large generators through the high voltage transmission network to the low voltage distribution networks where it's distributed to consumers. Voltage is stepped down through the network using several layers of transformers. The flow of electricity from generation to consumers is governed by a set of complex markets that ensure through pricing and contracts of different time scales that electricity supply always matches the demand and that the voltage and frequency stay within safe bounds throughout the whole network. Although the grid was the largest and most complex machine ever built, the one-way power flow and ability to schedule generators to provide predictable amounts of electricity made the operation robust and reliable. But this paradigm has been changing in two important ways both to have significant implications to the grid. The first is that the addition of utility scale wind and solar which cannot be scheduled and are intermittent complicates the operations of the grid. This is being offset somewhat by storage, particularly pumped hydro and more recently battery storage. The second change is that the excess power generated by DR resources such as rooftop solar and storage can be fed back into the grid making the electricity flow in the grid two ways instead of one way. And it's important for us to understand how can this be utilized as a resource and managed to improve the integration of our renewables and the other issues that and to address the other issues that solve appearing in our grid. DRs are mostly uncoordinated today. That is they don't operate together towards explicitly optimizing consumer or grid objectives. There are some exceptions, however. One is that within some homes and commercial buildings with solar and storage there's coordination to store the excess solar power and use it when electricity prices from the grid are high. Also demand response programs run mostly by utility companies aim to control HVACs and other large electricity consuming devices to reduce peak demand in the grid. DR vendors also have private clouds for their own devices such as for solar storage and EV chargers. However, these clouds are mostly used to collect data from the devices and to send software updates but not really to coordinate or control the devices. But what do we mean when we talk about DR coordination? DRs need to be coordinated at two levels. One is behind the meter where resources at a single customer side are coordinated to meet local objectives and respond to global signals. And we can coordinate them across the meters where multiple customers are coordinated to provide services to the grid and reduce overall cost while ensuring distribution network safety and reliability. Across the meter coordinators optimize the system while meeting the local network constraints. And typically they should not depend on the knowledge of the intricacies of each customer if we want the solution to scale and to preserve privacy and security. But why do we need this DR coordination? Here we have a graph that illustrates 30 days of demand solar and wind generation data. You can see here in red is demand, solar is in yellow and wind is in blue. You can notice that the renewable generation is intermittent and more importantly both sources of renewable don't necessarily perfectly correlate with the demand. DR coordination or demand flexibility can be utilized so that demand more closely matches renewable. So that's one big use of it. And in the other secondary use we can also utilize flexible demands to handle the unpredictable changes that might happen in renewables. So for example if you have a cloud passing by and there is a sudden drop in solar production you can respond very quickly to those changes. Another place where DR coordination is important is to handle the high EV penetration. So in a program, in a flagship project of bits and watts called the EV50, we investigated how does high EV penetration, 50% or more electric vehicles becoming electric, how is that impacting the grid? So we can see here in the figure that by adding charging on top of the existing kaizo load, assuming a 50% EV penetration here for the Bay Area, that's roughly 15 million vehicles, there is a grid power peak increase of 25%. This actually can cause significant overloading on the distribution system transformers and also demands on the grid and the fleet of generation in the grid. In addition to that fast charging can cause large low voltage spikes and large power spikes, southern power spikes, which both can represent issues for the network voltage equipment at the distribution level and at the transmission level it can require a fast ramping of generators. So in both these cases that we saw by coordinating DRs we can prevent all of these issues. At Stanford we have been looking at this problem of DR coordination in several projects. PowerNet is one such project that was supported by the DOE and Bits and Watts and it has research and develop a coordination platform that leverages the cloud. In partnership with Google, SunTech, Drive and Sonin we investigated how do we scale this coordination using the cloud? In order to scale it we need to deal with four constraints. First we need to handle all the local power grid constraints, the distribution network constraints. Second we need to handle the cloud communication network constraints. So unlike is commonly believed from the cloud it can't really do real-time feedback control so there is some constraints on how frequently can you message if you want reliability. In addition to these two constraints in the system we need to handle user preferences because whenever you're doing coordination you have to respect those preferences and finally you need to make it very easy to deploy and debug the system in the field in order to have the scalability of the deployment. The PowerNet architecture itself consists of two layers. At each customer there is a local intelligence implemented in a local hub. This hub coordinates devices behind the meter for that customer. We investigated how to coordinate storage, EV charging, solar and even a smart panel that was created at Stanford. This hub communicates to the cloud that is then able to do calculations and interact with the hubs and provide the necessary information to protect the power network while achieving joint objectives such as shaving the peak or providing services to the power market and so on. One of the key ideas in PowerNet is that the local hub and the cloud coordinator they just exchange limited amounts of information. The local hub provides some aggregate information about its planned consumption and flexibility and the cloud coordinator does a day ahead calculation that then provides the local hubs with power bounds that they need to satisfy in order to protect the power network. In this way we proved the issue of having to report individual information from every customer about each one of their devices and preferences to a potential coordinator and that turned out to be really important when we went to implement PowerNet in practice. We have implemented PowerNet in several places in a lab here at Stanford and we have two major test beds one in Fremont with 35 homes and in a farm where we manage the cooling of the farm. We have shown that PowerNet can enable dramatic savings in terms of the bill of the customers and we are now investigating how can we use PowerNet to provide grid services. So just to end my portion of the presentation what are the key challenges for scaling coordination of DRs these are some of the questions we are hoping to first of all you know how do we in the regulatory framework to better support coordination the one most critical policy limitations how can energy efficiency become a grid resource and how do we ensure equity and fairness and I'm hoping Diane you can address part of those questions. Second how do we make it easy to scale this coordination particularly how do we facilitate measurement and validation of you know your responses to signals from the grid how do we ensure an interoperability of devices and privacy and security in these systems and Ram, Ram and I'm expecting you can address some of these issues and then finally how do we integrate coordinated DRs in future grid operations how to compensate participants how to engage distribution system operators to ensure the distribution network constraints are met and that they also have an incentive to actually engage in coordination and what resources are actually reliable and cost effective for grid needs and Fabio and Gerda I'm hoping you will address some of that so finally we'll have some discussions on you know what are the lessons learned so just to kick off here's our panelists and Diane you can start please. Right so I'm Diane Grunick I'm a scholar researcher here at Stanford but I also am a former policymaker I've been in the policy world for over four decades now and I was a commissioner with a state regulatory agency the California Energy Commission for six years from 2005 to 2010 so I'm delighted to be the person here that's talking really about the policy side as well as some of our organized wholesale markets my focus is on the United States but I know we have a couple of wonderful panelists who are also going to be able to talk about what's going on in Europe next slide so I'm covering three topics just quickly some policy basics since I'm assuming many of you are not in the policy world second focus in on some of our traditional energy efficiency traditional demand response EE and DR and how they can be evolving and then finally really gained at a heart of what are the policy changes what are the barriers the changes we need to take advantage of demand flexibility as we're decarbonizing our grid next slide so I'm going to get into policy real quickly what do we mean by policy this sometimes is confusing there's one basic principle to keep in mind who makes policy it's government you have a lot of other people involved but it really is government and it's at the international level the national level the regional level state and local and then it consists of legislatures chief executives like the president and the cabinet and agencies and then the judicial side as well and what they're doing is enacting laws regulations programs really to try to get something to happen now we have our markets regulated energy markets the isos the myso in the United States they are run by non-governmental entities but they are regulated by the government so they're a little bit of a hybrid and here in the United States it's a federal energy agency the federal energy regulatory commission that regulates our wholesale markets next slide so who creates us energy policy federal level we've got congress primarily the us department of energy is involved though we also have as I said first the federal energy regulatory commission and then the environmental protection agency but president biden has announced that for clean energy and climate he wants an all of the government approach so for example our department of transportation is getting very involved in this area at the state level as I mentioned before we have our legislators our governors every state in the United States has something called the public utilities commission puc sometimes called the public service commission i was one of five members of the california puc and they regulate their investor-owned utilities and then we also have state energy offices in every state in the united states here in california it's the california energy commission and various other state offices and agencies are involved in california again our air resources board is heavily involved in clean energy because they oversee the climate efforts and then you've got city councils so private entities are super important they don't make policy but they sure do influence how it gets made what is done and then very involved on the implementation so that's a sense of policy is really complex in terms of who's involved and who does what at least in the united states and i think this is true for many if not most places around the world next slide so real quickly there's three major policy tools that are used everywhere the first are carrots that's the money it can be direct grants but it can be indirect expedited permitting the second are our sticks these are mandates these are requirements a typical one could be the renewable portfolio standard a requirement that utilities build a certain amount of renewables or procure it and then third are what we call sermons basically getting people businesses to change behaviors to understand what's available and in my experience the best policy programs use all three of these in an integrated and longer term fashion next slide so let's move on very quickly now to our traditional demand side tools that rom alluded to and just real quickly so we're all on the same page the difference between energy efficiency and demand response energy efficiency is providing the same service but requiring less input energy or providing more service with the same amount so you're basically having less energy used for a given service at any time demand response is different what it is doing is thinking about whatever is the load i'll take it say within a building from a device and trying to get a change in the normal consumption pattern and this can be done through prices it can be done through technology and it may result in less service and it may not reduce the overall consumption so it's less energy used in a particular time energy efficiency is traditionally less energy used at any time next slide i thought it would be good for those of you not deep into energy efficiency just understand what our basic tools are this comes from the american council for an energy efficient economy ac triple e um our uh uh mandate on vehicle fuel economy standards is actually the single most important um tool that we have in the united states it unfortunately has been slowed down under our prior administration but everybody's ready to go full speed ahead as well right now and then you see listed here our other major tools that we have in the energy efficiency world are appliance standards or building codes uh energy star utility efficiency programs federal r and d collectively these policies have reduced us energy usage by about 20 they in 2017 they reduced our energy usage by about 20 percent saving 25 quads of energy that was the amount used equivalent that year for california texas and florida so i want to reemphasize what rom said um when we are thinking about decarbonizing the grid energy efficiency is our friend it's our friendliest friend it is very effective and it has done a great job so far but we can do more in this area but i really want hope everybody is there thinking about decarbonizing the grid it is not immediately just let's go to storage or let's go to something else it is thinking fundamentally how can we make our buildings our industries our cars more efficient because that then means there's less work that the supply side that the grid has to do and that's fundamentally what we're trying to do with energy efficiency on top of it it generally saves money as well so next slide um we can do more though with energy efficiency in 2014 i co-wrote a paper for the electricity journal it is available i uh wrote it with david jaco who is head of energy efficiency at our largest municipal utility in the united states um los angeles department of water and power and it really tried to talk about there's a future in energy efficiency beyond what we've done where we can use data in a way we haven't we can understand operational uses in building and very importantly we raise the idea that we can value energy efficiency if we focus on location and grid integration so i encourage any of you who want to look at this it was a really fun paper to write as well next slide then on the next year in 2015 i wrote another paper that was on called the next level of energy efficiency five challenges ahead i don't have time to go into this but one of the challenges that we talked about specifically was how do we value energy efficiency so it really is focused on providing both locational and temporal benefits to the grid and that's something that we're just beginning to think about for energy efficiency next slide and sorry i'm moving so quickly through everything but we want to get into it um this is a quick overview that the first staff published in december um that gives you a sense of where we are with demand response remember i just finished energy efficiency demand response and it's 2013 through 2018 the point i want to get across is we haven't seen really significant jumps in the use of demand response over this time period and this is one of the opportunities as well as challenges we have ahead next slide i was asked to talk about burp so i'm not going to go through this you'll all have the slides but basically burrk has been working on how to bring in d er's and demand response at the wholesale federal level and they started in 2008 where they really wanted the iso rto's to integrate demand response but it's worked its way through the courts and everything else all the way down to a major order that was issued in september of last year called furk order 2222 and it is basically our isos and rto's must remove barriers to participation by the d er aggregators and wholesale markets they must file tariffs to do so there was concern that it had an emphasized made clear demand response needs to be a participant and a resource offered by aggregators and so we just had a new order that came out last month 222 a that clarifies that state regulators who have a host of concerns in this area we won't go into but they can't block d er participation in wholesale markets just because demand response is included and this we hope is really going to be a ground breaker of bringing up our wholesale markets this is an example of a policy change next slide so now I'm doing my whirlwind tour of policy on demand flexibility I think that rom went through this so I won't repeat it other than to say my focus as a former policymaker includes a great deal on the buildings themselves this is where we can get our efficiency but this is where we have the host of our basically devices that use electricity that can then shape and shift and modulate their load so they can be a friend to the grid there's a great paper that came out from two state trade organizations nazio and naruk in October 2019 on the benefits of these grid interactive efficient buildings and again rom went through most of them we can integrate our renewables we can really lower costs we can reduce emissions and they can provide grid services so from the policy side this is what we look at these are the benefits how do we get the policies to correspond next slide so what are the barriers and I tried to actually limit them and make them big picture enough so that people could get a sense of the magnitude as well as the focus the first thing is there's really a lack of knowledge about this whole area by utilities regulators stakeholders there's some deep in the knowledge but I'd say overall very very little knowledge and that is combined with there's a culture a very strong culture by both regulators and utilities of being risk adverse so you put that two together and that is a blueprint for inaction so this is a barrier we've got to understand and address second one is historic silos within utilities state agencies state versus federal the demand side within a utility is often on the customer service side a totally different group that's working on generation or transmission or distribution and so even having those people get to know each other that's the same within state agencies within state pucs and then in the world we're talking about the expertise in buildings the expertise in transportation that isn't anywhere near a traditional public utilities commission who is the state regulator in this area state versus federal is also very very different I won't go into it but the bottom line is we don't have a federal energy policy we don't have a clean energy policy we don't have a climate policy so we have just a lot of fluctuation of what may be the emphasis at the state level at the federal level money money money is my third this is going to be an expensive transformation trillions of dollars and we don't have any good funding sources now that are focused on this the solution is not going to be we're going to raise rates because that's not going to have the type of transformation we need to do and even at the federal level with wholesale markets is fairly not going to be large enough the fourth is customer rate structures as well as wholesale tariffs if customers are on flat rates which is true for many many areas they are not incentivized to change their usage to when perhaps the grid needs it so we have to make major changes in in rates on the next one that I know others are going to talk about is we don't have any accepted valuation or performance metrics and for regulators as well as utilities that's deaf for going into this area because they want to be able to forecast what are savings what are benefits and then you have to be able to look back and say was that achieved and then just overall we haven't yet developed our regulatory and market structures to enable the type of aggregation we need really pricing I mentioned and trading so all of these are the biggest barriers that I see now here's my last slide what can we do so I think that I just this is my view I think we need a very strong shared federal and state commitment to develop demand flexibility for the decarbonized grid we have a lot of folks that have goals on decarbonizing the grid but I have yet to see any policy making entities say flexible demand flexibility is a goal we are going to achieve second is I think we need something like 25 year action plans at both the state and national level for how we are going to develop large scale demand flexibility starting and including year by year goals and implementation steps because we're not going to get there in 25 years at the pace we're doing now third I would love to see a federal Marshall plan providing the majority of the 10 year seed funding for making this happen the way we are going about it now will not work we're not going to have enough rate increases we're not going to have enough private investment if we're going to get the benefits of this I think we need a very strong federal push then we need to really have a major effort on one of those business models programs that will provide adequate compensation customers need to understand what money they'll get utilities and aggregators also need to understand it again this needs to be done in a very comprehensive large scale thinking the next one as I mentioned is our regulatory market structures we've got small pilot programs going on but that is radically different from a grid that is decarbonized that can use this type of resource and so there's all sorts of things that need to be done on new performance metrics I'm very excited about being able to use automated analytics to create our baselines and for forecast performance a lot of work in those areas and then the last one is adoption of new customer rate structures this includes getting our smart meters much more pervasive than they are now and it's going to be a major shift at every state level to make this happen let me conclude with an item that rom raised which is equity I hope I've come across this is not going to be cheap it may end up having benefits certainly for the climate we need to spend this money but we have to be very conscious if we're going to have it for our lower income communities who are often in multifamily buildings there are a host of traditional problems with efficiency in those buildings and frankly we can do it but it's going to be expensive and we're going to have to think very consciously how are we bringing in all of our communities in this area so that's it my sum is it's big challenges it's big changes ahead on the policy side but I think it is doable and I think we can get some great results thank you Diane thank you very much I was going to have a question for you exactly about equity but maybe we can keep it for the moderation moderated part of the session so now Ram could you please start your presentation thanks thank you thank you Ram and thank you everyone so Diane that was a great there was a great intro and I will try to address something that's close to me which is the whole concept of energy efficiency and its role in demand flexibility and then we'll also talk a little bit more about what Ram was looking for which is hey what are the gaps in the implementation the house the data platform so we can dive into those two so as we think about demand flexibility I think this is something that's been core to every mission for many many years I still think about the fact that like Clark Gellings who's been working on this for about 40 years started the whole practice of integrated demand side management and for those of you who are not aware of EPRI EPRI is a public benefits non-profit organization they're focused on advancing safe reliable affordable and environmentally responsible electricity and a lot of forward goes end to end it's it's all the way from the generation side all the way to how energy is used in with customers in buildings but one of the things that I've personally been focused on and this is something we can dive into a lot more too is when we look at the building stock and we know that we have to decarbonize our building stock the general consensus is hey we are going to decarbonize a grid the grid is going to be carbon free by 2050 pretty much in every place then all you have to do is just electrify the buildings and voila right you're there in terms of building decarbonization but one of the things that we want to really look at in terms of the building decarbonization strategy is how do you integrate energy efficiency customer renewables even things like low carbon fuels and how do you put them together within the building stock and what is the role of demand flexibility in being able to advance this vision of not just a zero carbon grid but a zero carbon economy and so when we look at it from that perspective while we talk about decarbonization or sorry demand flexibility as a decarbonization strategy for from a building's perspective they're driven by different targets so in some places where you have cleaner energy generation targets where you have the target for the grid to be decarbonized that drives your flexibility requirements from buildings because you're looking at more renewables on the grid you're looking at how can you actually flex your demand so that we can meet our load also meet our supply but then when we look at the other side which is the economy wide decarbonization we are driving towards reducing the carbon content in buildings one way to do that is of course through flexibility in buildings but that energy efficiency is a very critical part of this low carbon pathway electrification is more and more a important and a critical part of this decarbonization strategy and then we also start looking at other things like embodied carbon buildings how do you reduce the carbon content and concrete new construction methods etc and then finally what is the role of low carbon fuels low carbon fuels can play a role in both decarbonizing your building stock from the heating side but they can also play a role in terms of providing flexibility through possibly dual fuel strategies so these are all different elements of our decarbonization pathway and so as we work work towards this demand flexibility I think it's key to keep in mind that all of these different strategies are going to help us with attaining the demand flexibility that we need so when we think about these pathways to decarbonization and think about how we integrate demand flexibility um Diane mentioned it quite a few times too which is the economics are important the customer economics are important so as I go through this right I want to focus on some of the areas of demand flexibility that we don't normally associate with demand response or controls right so for example what is the role of the customer what are they willing to accept in terms of providing flexibility services what is the role of the distribution planning so all of these come factoring together when we look at demand flexibility as one of the calls in the wheel in being able to attain our low carbon future so when we think about how do we get to that zero carbon future there are many strategies that customers can take for example some customers might say hey I know that the grid's going to be carbon free or I'm going to generate my own um um own renewable generation so I'm going to do electrification and then apply demand flexibility and I'm on my pathways to zero pathway to zero carbon other customers might say hey I'm going to do what is available today what is economic maybe it's some energy efficiency maybe it's some demand response but then I'm going to wait for new technologies to come so but as but in each of these individual pathways there's a role for demand flexibility and the other thing is that demand flexibility can also provide resilience to customers um it can provide customer optionality and ultimately reduce cost for the customers so this is again what it goes back to is that when we talk about demand flexibility as a um as a big picture umbrella it's not just about controls um energy efficiency is a very critical part of demand flexibility one example let's say we are replacing um electric water heaters with heat pump water heaters yes heat pump water heaters can also provide demand flexibility maybe not even as much as electric water heaters maybe electric water heater can provide one kw of demand response heat pump water heaters might provide you 0.2 kw for building but overall the reduction in demand would be more closer to the order of three to four kilowatts because they're running much more efficiently so the impact to the grid from this energy efficiency measure is actually higher than what you would get with just a pure controls based operation um distribution planning as we look at electrification it's becoming pretty apparent that one of the big barriers to electrification in our existing building stock is going to be the readiness and the capability of the edge of the grid distribution networks to be able to accept these electrified loads so from that perspective having demand flexibility could potentially be quite useful and helpful in avoiding distribution upgrades customer energy management and resilience um demand flexibility is as we get more time variable rates um the customer energy management becomes a lot more important and in a way it also can provide resilience so for example if you're thinking about demand flexibility and the fact that hey we can have better insulated buildings to provide more demand flexibility that same insulation can also act as a weather resilience so that way your home is not getting as cold or as hot as you see more weather extremes so these are all other benefits other applications of demand flexibility that we tend not to focus on as much um there's there's a the word demand flexibility seems to trigger in in most of us just this impression of controls and controls based operation you will get to that too but i think it's important that we look at this in a very holistic manner looking at how it enables all these other benefits and the benefit streams and so when we think of our future planning right these are all things that have to be incorporated so as an example um at a previous run a series of um large-scale demonstrations um in in smart communities looking at how this confluence of customer renewables energy storage demand response energy efficiency electrification how all of it comes together to be able to enable a future grid so within that there's all these different flavors there is a lot of focus on affordable housing how do you build new affordable housing better how do you electrify it how do you get to zero carbon housing how do you do community micro grids how do they actually operate where do you connect them if you do a community micro grid how do you actually provide that resilience to the customers there's work going on one of the other instances is there is large-scale pilots looking at smart thermostat deployments across the country and part of what you find there is what is the aggregate availability of demand but also the the whole data stream how do you use data from end-use devices for m and v how do you um how do you connect these connect these different databases together how do you actually send the signals how do you get them m and v coming back so there's all these different aspects that come out as you do these large-scale demonstrations and so there's some very interesting lessons learned um on on demand flexibility and then you build on top of those lessons learned to figure out how to do the next step for example if you're doing a community micro grid in a multi-family affordable housing community it's kind of interesting that the way our policy um is set up with virtual net metering for the community renewables the interconnections don't allow us to provide backup power to these to the tenants in those housing communities because of the way the electrical connections are set so these are things that show up when you actually do these demonstrations for demand flexibility so take a couple of examples and what we have learned and this again going back to this concept of this integration of energy efficiency and demand response in this example this is actually a 60 home affordable housing community that we looked at from the viewpoint of how do you get an existing 50 year old poorly insulated community to a zero carbon community through electrification so this community for instance had all the elements all the d-year elements right there's a 137k w community solar array there is um um we were able to go in and insulate all the building walls working with the local utilities customer programs we were able to go in and change out the heating systems so um as we go through these different steps you learn a lot of different things one big learning that came out is that while we think of electrification as a technically feasible pathway today or a more direct pathway to get to our low carbon future a big challenge was that the available products do not really fit into the spaces that are there but also more importantly that the electric grid infrastructure is not sized for electrification of these heating systems so then you go through the fact that the cost of getting these electrification upgrades was mostly on the grid side it's not on the customer side but the fact is that edge of the grid upgrades show up as a customer cost so when then you look at how do you actually apply demand flexibility strategies so that you can reduce billions of dollars in customer cost if we were to the results that we that came out of the pilot showed that we were sitting around 15-20 thousand dollars per apartment to get them electrified so what do you do then you look at new technologies that can enable demand flexibility which is lowering the total demand from these buildings while still being able to electrify and decarbonize these buildings so that leads you to technologies like highly efficient heat pumps that that pull very low energy right smart panels for example smart panels that can help with balancing loads so the so that your your cooking cooking equipment is not running at the same time as your heat pump is how do you balance those loads so that you're not hitting the cap on the distribution side which then triggers for the distribution upgrades thermal storage in in in the form of community scale water heating systems because what we found was that for example is that if you put in a water heater in every unit you're looking at 250 kilowatts of demand for 60 units for 60 apartments whereas if we are able to put a community storage unit or a community water heating system you can take that 250 kilowatts of demand and bring it down to 50 kilowatts so there's all these different energy efficiency or integrated demand side management technologies that can substantially help in being able to move down the pathway of decarbonization by being able to manage your demand more effectively another example about three four years ago we've completed a demonstration it was the first demonstration of zero net energy communities in california and one of the big outcomes there was that the big concern going in was that the local utilities had to change the distribution planning practices because now your net demand when you electrified your systems and you added battery storage in these buildings was that the net demand was going to go from 10 kw to about 25 kilowatts per home which meant that you had to upside your transformers upside your wiring etc but because we were able to implement very high energy efficiency through better building envelopes through better equipment more efficient equipment one of the big findings there was that this the role of energy efficiency in providing demand flexibility was that we could for example if a transformer had 10 homes on a single circuit the actual coincident peak load was only about a factor of 0.45 versus the normal factor of 0.75 that is you could actually the net load was about 40% lower than what was expected by standard planning methodologies because we were able to implement energy efficiency in these buildings so these are all some really good examples of how we approach how to approach demand flexibility not just from hey let's put all this equipment in and control them to a more planned program that incorporates energy efficiency and energy efficiency in congruence with local renewables and demand flexibility I will jump a little bit into the hell which is this whole concept of yes we have all these technologies now how do we implement them how do we get the mnv and the more important question of data platforms that can help us understand demand flexibility and ron mentioned talked a lot about the power net platform so an example of those kinds of implementations is I think there's a lot of learning we have to do with regards to the aggregation of customer resources so one of the one of the efforts that we've been looking at is how do you create this kind of a unifying platform which can be really used to understand how individual resources work whether that's a nest thermostat or an eco v thermostat a sauna nor a tesla power wall for battery storage it could be a sand and um heat uh water heating system how do all these different individual components work can work together to provide the demand flexibility it's almost a way of trying to understand aggregation from the bottom up so uh one effort we um we worked on was actually trying to put together this data platform by which we can actually get the data from each of the individual devices but also provide a rate engine by which we can send time variable rates to these devices and observe how they actually operate um so within that um a big part of the work was actually creating this data platform which leads to the functional specifications of how each of these end-use devices should work so part of this is creating multi-layer a multi-layer architecture by which you can take all the way from a utility or even from an iso level all the way to the end-use devices and then bringing back the data and transparency so that you know what works what doesn't work and where the gaps are so in this case there is four layers one is a utility layer that's consistent with signaling it uses open edr 2.0p then there is a data of aggregation and abstraction labor that provides all the m and v functions there's an orchestration layer because now you're trying to connect across so many different um end-use devices and systems and then finally a participant layer we cannot forget the role of the customer as you work through demand flexibility so how do you provide services to the customer that enables them and that makes them be a part of the solution for demand flexibility so um first application rate based demand response here we were um what we did was we used this data platform to be able to send signals to a commercial building and manage the thermostats and uh some of the plug loads and also provided an app to the end customers so that they can actually look at their look at their energy use and rates and and work with them on the engagement for the demand and so this was something that was tested in buildings in california new york second example is how do you use the same architecture to be able to connect to a fleet of electric vehicles and this can be done through apis or through other other communication pathways to both heavy duty as well as light duty apis so there are multiple applications that can be used for understanding demand flexibility and finally so what are the takeaways right from so in the context of decarbonization i think it's really important for us to recognize the importance of energy efficiency in providing demand flexibility and we also have to understand that as we try to decarbonize our building stock the distribution systems um the cost from the distribution systems could be quite substantial and that the demand flexibility would have and should have a significant role in being able to offset the cost from the distribution of rates and finally we have to be able to cross this business model barrier for aggregation one of the big challenges with aggregation is each aggregation is a single business to business transaction and how do you actually overcome those business model barriers for aggregation so with that i will hand it back to ram and thank you again for the opportunity hey ram thank you very much we will go to our next speaker and panelists please fabio you can take over from here so hello from my side at good evening actually it's 6 p.m in Rome Italy right now first of all let me thank you for the very kind invitation it's a great pleasure to speak at sanford university my name is fabio genoese i'm heading the strategy team at terna the italian system operator italian power system i would say somewhat similar to the californian ones roughly 300 terawatt hours of electricity consumption the peak of 60 gigawatts which occurs in in summer caused by air conditioning just like in california there are quite some similarities i would say between italian california in terms of size although regulation policy tends to be very different between the the two areas today actually i'm speaking on behalf of nce that is the european association of transmission system operators in my role as task force chair on demand side flexibility nce which covers the european grid as you can see a bit in the background that's a european continental grid which connects poland to portugal danmark to italy or belgium to to greece's interconnected synchronized grid all over the continent being that we have the same frequency all over the place okay i thought it would be good to to give you a bit of context in terms of current energy scenarios for europe the european union has a net zero pinot's gas emission target 2050 which means it is a there's a growing role of the power sector typically when you talk about net zero scenarios use you have two megatrans which is first the electrification of total energy consumption and second a growing role of the power sector you can see it a bit on the right side today we are in europe at 34 percent renewables across the u27 with a total electricity demand of almost 3 000 ten hour hours and according to to our plans the the share for renewables will grow to towards 65 percent within the next 10 years and probably above 85 percent within the next 30 years it's part of our green deal and net zero targets in parallel we have a massive growth of electricity demand while overall energy demand will have to decrease i think that's the beauty of electricity you can cover the same needs be it cars or heating of buildings as ramos saying at a lower primary energy demand if you use electricity instead of gas for instance when it comes to to heating your home now for us system operators this means typically three challenges i only listed the the main ones it's when you transform the power system in this magnitude you typically will have the problem of lack of traditional resources that we as system operators use today um to balance the grid to provide grid ancillary services as as we typically say we also expect that the electricity demand profile will be much more volatile because you have millions of electric cars and heat pumps in the system and let's be honest we do not know yet how they will behave and on top of that at climate change we expect an increasing peak electricity usage due to climate change and air conditioning of course and how should we handle this first maybe to give you a quantitative insight not for 2050 but for 2030 that's nine years from now if you look at the left graph you see let's say the hourly ramps of the residual load of the net load for continental europe residual load would be the total load net of renewables like wind solar hydro things like that as you can see we expect extreme events already by 2030 it can happen that from one hour to another i need to ramp up by 60 gigawatts to put things a bit into perspective that is as if i would switch on the whole of italy or the whole of california from one hour to another this is beyond anything we have ever observed and to be honest also it's not clear how we should handle this the big question of course is we don't know how to handle it today but how would we do it tomorrow in the absence of big power plants which were built just to follow demand but we will which we will not have in 10 years from now part of the solution we think will be the flexible distributed resources and this is shown on the right hand side for 2030 we expect roughly 120 million electric vehicles in in europe that's a bit less than half of the passenger car fleet today so half of but less than half of it is expected to be electric so what is the flexibility potential of this fleet let's imagine that they charge with an average seven kilowatts it's rather slow and that's roughly 10 percent of them are charging at the same time and are available to be cut off or shifted for an hour you end up with a flexibility potential of 87 gigawatt right you can see that this is comparable to the maximum hourly ramp that we observe so it's simply too good to be ignored it's the same order of magnitude as the extreme events so how do you unlock this potential we are a system of greatest keen on unlocking this potential as i think this is we stress this we we don't see this as a as a threat but rather as an opportunity because this is flexibility and it comes on board of new devices how do i unlock it so i think here um coordination is the key word and and gada will follow up on this a bit later i'm only giving you the the high level overview of coordination coordination is important across the whole value chain it's important first because distributed resources tend to be very small compared to the traditional flexibility resources hence you will require aggregation to reach significance and have statistics on your side second these new resources will be located mainly in low voltage networks take EVs charging points will mostly be located in cities or next to buildings only a fraction of them will be on highways take renewables we expected up to 50 percent of all new solar could be rooftop and thus be connected to distribution networks this is stuff that we as transmission system operators typically do not see individually and let alone dispatch it individually but as i shown you on the first slide this is stuff we need to move also to stabilize the system so this means that as a transmission system operator given that these are very small resources i would likely want to activate at least a few thousand electric vehicle at once in order to reach a significant measurable effect at transmission level imagine these two three thousand electric vehicles that i want to activate would all be located in the same city district of Rome close to the coliseum yeah and clearly this this could easily overload the local network and send the whole city district to darkness this is why coordination with the distribution network operators is fundamental a third layer of complexity is introduced because these assets can probably provide different types of services as you can see in the middle they could provide frequency control congestion management voltage control and the key question here is can one single dispatch order solve both a voltage control problem and in the city of Rome and contribute to frequency stability at national or transmission level probably yes but we do not know yet how to organize and unlock such a dual use dispatch command yet because as transmission system operators typically i don't have the knowledge of what is happening what is going on at distribution side and and what are the effects of my activities let's focus a bit on demand which for us as system operators i would say is pretty technology agnostics it can be anything from small scale like electric vehicles heat pumps to a large scale resources like electrolyzers industrial load power to gas you name it for demand side flexibility what we do however i think is useful to distinguish between implicit and explicit demand side flexibility implicit demand side flexibility for us means that consumers react to price signals for instance you have a critical peak pricing program in most u.s states it is a voluntary adaption of load to save on energy expenses minimum technical requirement here includes that you need to be able to meter your withdrawal to off electricity from the grid in certain time intervals let's say every 15 minutes this is needed for financial settlement so there are some barriers to to overcome especially for small scale resource these barriers for instance can be technical because interval meters or small smart meters they are not yet available to all types of customers because the rollout started with larger consumers another barrier can be behaviourable the adaptation of load through personal choice can be cumbersome we all know that it's can be cumbersome to decide to put on your washing machine in a certain hour instead of the other but i would also say there's an economic barrier because the adaptation of load through automation makes it less cumbersome but as at least in the past was not cost effective for all solutions overall i would say that the current technology and software solutions they can easily overcome these barriers just think of of the last electric appliance you bought wi-fi and home automation is everywhere it has become so ridiculously cheap to remote control devices based on algorithms and external inputs that personally we think that this is an easy thing of course let's say on the regulatory side you probably need somebody who defines a dynamic price that reflects the the state of the grid and we in europe at least we are convinced that the competitive retail market is a good basis to provide dynamic price signals to customers let's move on to explicit demands of flexibility explicit means for us that system operators can request a certain behaviour to stabilise the grid and of course we must be sure that it is delivered so it's not an expectation it's not a voluntary thing it's something that we can with a switch turn off and on a bit like today we are moving power plants we're ramping up and ramping down power plants all the way all the time today to stabilise the grid for this reason of course the minimum technical requirements a bit more stringent we typically require real-time telemetry which is every four seconds you send the state and we also require remote management capability that we can trust so it's not a wi-fi chip that some device manufacturer has decided to put it into his device it must of course respond to certain reliability standards so that we can trust the signal and the capability that is coming with this type of device entry barriers i would say are a bit more complex in this case because as i say you are providing something to a system operator system operator sees megawatt it doesn't see kilowatt so you need to manage a large number of resources there's an organisational barrier i would say typically you also have an economical barrier because there's a higher cost per megawatt for real-time telemetry remote control capability it's it's a one-off cost and if you have to put the one-off cost in every heater it's something different and if you have to put it into one big let's say power plant on the regulatory side let me add that there's a coordination challenge i'd say between transmission distribution gather will follow up on this but also between aggregators and system operators and last but not least i would say there's also let's say a challenge of of robust baseline estimation i think you guys from the us know this is this is hard remember the baltimore baseball stadium which was turning on stadium lights during electricity shortages in order to be paid to shut them off right overall we think that these are hard problems and that innovation is required to overcome these these barriers that may give you a concrete example of of this innovation and let me do this by taking off the head of the association and sui and and put on my corporate head of ternar to talk about equity equity is a crowd balancing platform together with the dutch german swiss and austrian tso we have launched a joint venture last year and we tend to develop what our dutch colleagues typically call a crowd balancing platform in other words a platform that enables even small-scale distributed resources to participate in the grid balancing process when we pitch this to car manufacturers they were excited they tend to think globally and they are really not interested in yet another pilot projects of a local grid operator testing how a single electric car can be used to stabilize his local grid they are looking for standards at least a european one ideally i think a global one but even european is good because as you remember europe has a population of 400 450 million people about 300 000 passenger passenger cars that is huge but of course you would lose this advantage if you accept the fragmentation between national or regional standards so that's why we we started off this collaboration between italy germany switzerland austria and the netherlands so what are we actually doing here talking a bit about the ecosystem at the core of our platform is a blockchain because we are convinced that the necessary coordination is complex will require a lot of data exchange between the actors and last but not least trust let me give you a glimpse of two use cases that we are designing so this blockchain will enable to give you a dynamic register or catalog of flexible devices so where are they located what can they do and whether there are limits to their usage an example could be a traffic light system so a distribution network operator might impose a red light to ebbs in a certain district flagging that these devices should not be used for for national grid balancing in a certain moment of time it can thus solve the coordination problem between tsls and dsls the information is available and it's trusted second use case in which i would add is that the blockchain adds a transparent and efficient way of of doing micro transactions imagine that as a system operator i need 10 megawatt of flexibility for an hour that means that the aggregator will need to dispatch tens of thousands of vehicles every 50 minutes right so he will end up with probably a million transactions to deliver the required flexibility the blockchain solution give every stakeholder across the value chain a trusted data layer because it records the transactions and by definition of a blockchain it ensures that the past transactions are immutable so this tracking tracing this trust is fundamental so personally i'm thrilled about this and we are convinced that acrogy offers a solution to many entry barriers that demand side flexibility at least the explicit one has at the moment and with this i would hand over to ram thanks all if i be a thank you very much um we will go to girda and then we will have a question it's a q and a session girda please yes ram thank you very much so my name is ravi i am working in the Netherlands for tenet which is the the transmission system operator in both the Netherlands and part of germany uh also here on behalf of pence we as pavio um so the association of all the the tso's in europe working together on several topics so we start with the first slide i show you a little bit of um of what's happening within europe so we have uh worked in the past years mostly on the tso tso corporation uh so on the national uh horizontal level but we see now that we need to focus more on the local level as well and for the european level we've been working a lot on that in the past years but we see that now we need to focus a bit more on the vertical integration between transmission and distribution we call it tso's and dso's in your case it's most mostly talking about transmission and distribution utilities but just to show you a little bit of what's been going on in europe in the in the past years on this tso dso integration um i will show you on the next slide that we have a toolbox um where we really focus on the different tools that we have as system operators uh to manage the grid and to make sure that we we keep the the system stable so we have technical solutions um we've been discussing this before i mean many things are there uh connection agreements we can we can work a little bit on that uh tariffs uh can also help us to ensure that the that we have the divide electricity in the right place but the main focus that we want to discuss between tso's and dso's in europe is the the market-based solutions uh for the the activation of explicit flexibility that Fabio just just explained um in the next slide i'll show you a little bit on how this works uh we've been focusing on congestion management in a combination with balancing where we will show the process of how a flexibility service provider as we call it so any provider of flexibility how they can participate in in a market for congestion management for tso and dso and for possibly uh balancing uh main focus was on congestion management because it's something that both the tso and the dso meet um and it's very important to to focus on this pre-qualification as you can see here on the left side uh pre-qualification is both on the product side so can the assets actually deliver uh what it's uh what it's trying to be in for uh and the grid pre-qualification which is focusing on can the grid bring the electricity from a to b if the flexibility service provider is pre-qualified then they can bid into a market which has coordination schemes for tso's and dso's to to interact properly properly so what happens there in just that market coordination scheme tso's and dso's both give information about their grid any restrictions that they might have and there's one system operator that actually requires to solve any congestion so you have a bid that could solve your congestion but you also want to ensure that it doesn't create any congestion uh adjacent grids so that's what this market coordination scheme is for there are three main options we described it also in the reports that was published in uh 2019 you can see the link here um in case you want to look at the report um and these three options or basically you uh you separate balancing from congestion management of the tso and from the congestion management of the dso so you have basically three separate markets um you can also combine the congestion management of the tso and dso and keep the balancing apart or you can take all three together and really focus on the integration of balancing and PSM management of both the transmission distribution level so what happens further you go to the product activation only if you find a bid that can help resolve your congestion and not cause any congestions anywhere else in case that happens you can activate the products and make sure that the FSB the flexibility search provider is is informed so it can actually deliver and it can properly be settled as well so from this you can see that it's very important to work together between TSOs and TSOs to ensure that any resolving any congestion doesn't cause any new congestions and that's what I will describe a little bit in the next slide which basically shows the vision that we have we work in one system so we look at the system at large and not at parts because we have different companies taking care of it we want to work together in an integrated system approach furthermore we want to serve customers and society that means we need to value the flexibility that they have and also give a put a price to it but that mainly happens in the markets cooperation with the dso is obviously very very important we need to do this together we access the same resources for either the same or for different products so we need to make sure this properly aligned and of course we need to have some kind of observability in each other's area to make sure if there's any issue in in one part of the grid and you know in advance that it will come to the grid that you're responsible for so what do we aim for we aim for a common vision both from a TSO perspective but also embracing the TSOs and other actors that are involved in this energy system we want to have the maintain the European diversity that we have and that we cherish but also ensure that we continue with this horizontal integration so the cross border integration between the different countries besides the vertical integration between European transmission and distribution and of course using the local skill opportunities even though we framed them in a global system so we look at the system as a whole as one system but we still do know that we have local differences so in the next slide is a little bit more on the vision of NSOE and the TSO perspective on this demand side flexibility so what can demands as flexibility actually do well it can reduce peak demands that's something I think we all know we can avoid therefore grid investments but our main focus was also on active power so besides being active in the market maybe in day ahead and intraday because we're going closer to real time now with many renewables in the system but also by system operators as I discussed for congestion management and also balance is balancing is the frequency control as we've seen in the in the slides a five year before but we do need to ensure that we have proper regulation that the policy is clear that the market and the system are properly designed just to make sure that everything works together as one as a TSOE we also procure all our products in a technology neutral that means that we don't really care in that sense where the product is coming from as long as it is being delivered the way we need that means that it's very good for any actor to participate however we need to work on the requirements of these let's say the product specifications to ensure that also the small participants and even aggregates can participate in this and that is something that we still need to work on although several things already influence then very important there's also the locational information because especially talking about congestion management if you participate in a certain location where there is a restriction that means that you will need to solve this restriction and that is extra costs for society so we need you to focus on getting more locational information even when there is an aggregated pool that means some kind of minimum granularity will be needed and of course proper measuring is important to also be able to settle what has actually been delivered so not to forget that all of this we're basically looking at electricity but the energy sector is much more than that and so the way we see it also sector coupling is very important where we combine electricity, gas, heat and transport it's something that needs to be developed further something that we still need to look at but definitely if we only look at electricity it will not be enough to really focus on the on the goals we need to reach in the coming years so finally in the last slide that we that I can show there's some kind of an overview of all the pilot projects that we that we're doing in in Europe of course this are projects either under the Horizon 2020 program where the European Commission is providing subsidies it can be private pilots or it can be actual projects already ongoing you can see a lot of things are happening here they're on the local scale national scale and the regional scale we also see different parties being like let's say the main actor involved it can be a TSO it can be a DSO or a combination of the two it can be a power exchange or a third part and you see there's a lot going on and many things that we are learning still and I want to focus on one of the project which is GOPACS which is in the Netherlands it's let's say a small power exchange focusing on on intraday trade on a 15-minute basis and they gave the opportunity for any market part that wants to bid into this market to provide locational information and when you do so this location information can be seen only by system operators so there's no issue between market parts that they can see where a bid is located it's only been visible made visible for system operators and they can actually use these bids to solve congestions and one important remark to make here is that you can only activate spreads as they call it where you activate an upside and a down downside bid at the same time to ensure you don't interfere with the with the balancing of the of the country and this is a really ongoing project it's not a bid anymore it's together with the DSO and the different DSOs that we have in the Netherlands and it's actually working already so it ensures that smaller parties can also involve in in congestion management which is currently running in parallel with the congestion management that we already have in place for years so this a small overview of everything that's happening in Europe and I'm happy to further discuss the differences between the US and Europe so any questions you might have I'm happy to answer in the final discussion thank you we will now start the Q&A session and I want to start with some questions that were asked in our Q&A screen here let me just bring them up here so so one question for the panel is regarding resiliency and how can demand side flexibility help there and how will we potentially support that with policies so maybe I'll start on that with Fabio maybe you can first take a cut at that and then Ram yes I think resilience very important question as we also saw in Texas a couple of weeks ago so I think there is especially a resilience for infrastructure there's a key role of policy because extreme climate events will be very rare and it's difficult let's say for pure market perspective to ensure the necessary investments so prescribing standards and assuring let's say a correct remuneration for the investments that you're doing for resilience is key especially when it comes to extreme climate events being extreme cold or extreme heat waves that I think we both will be observing in the next couple of years very good Ram what can you add in terms of the building side to that equation well I mean I think when we think about resiliency right it's there's a tendency to think about it in terms of backup power that's that's our first instinct but also there are things that we can do within the buildings for example if you have a better building shell that provides resiliency against climate demand response it increases the demand response potential because now you can offset your loads for longer periods of time do better pre cooling preheating etc so there's definitely an interplay between the two and I think it goes back to how we designed it's something that we haven't thought about from a design perspective but as we move forward can we actually look at resiliency as part of our building design and how do we incorporate that both in our electrical system and in our building systems Dan can you comment a little bit on on on this issue from from a policy perspective you know we have a decarbonization goal at the same time we have to consider climate resiliency and adaptation you know demand flexibility can help in both how is that seen it's still evolving I mean I think again it's it's done right it can be a great tool I've not an expert on Texas but there certainly are some well respected people who I've read about with their analyses where they said that Texas's approach I mean it had its whole market design you know not having having a market within one state was poor planning let's be honest but in addition to that while it had demand response participating it in my mind hadn't gone down to that next level which is if we had some of the more advanced tools that we've talked about you could have gone in and really seen how you could use the buildings themselves lowering perhaps their actual heating so that across the entire ERCOT grid there was less of a load but at the same time if your electricity goes out in those buildings they're not able to participate in any demand flexibility so it's also a matter of timing having the controls having the automation so that you can call on it in far enough in advance real quickly here in California sort of our part has been blackouts due to concerns about wildfires and our state regulator the California Public Utilities Commission just adopted a decision a few weeks ago that did increase the amount of demand response that we hope to be able to utilize literally this summer so that we can respond if needed if because of the wildfires we're starting to shut off our lines and lessen what that happens in my mind that's sort of a baby step I skimmed the decision and it still was you know very very these siloed ways of looking at it and I love my regulators that I think it's time for a bigger vision a step forward of where this can go but there clearly is a role on the demand side for resilience thank you very much changing the the the direction a little bit deep is the participant in the webinar is asking the following question what is the biggest part of the puzzle that is still unsolved is it the technology with respect to data or coordination is it policy or regulatory or it's more how we can unify all the parts of the puzzle to make the grid more coordinated I wanted Gerda maybe you can start off from from your perspective in Europe and then others can please chime in I think there's no one single answer to this I think it's a it's a it's really a puzzle we cannot say it's only one piece missing so we need to work on on regulation which in Europe for example we're now trying to to prepare for a new regulation on demand side response and flexibility which will bring us further into that direction but we also need to to look at the big picture we need everyone to to play their part we cannot just say okay it's all up to system operators and they have to ensure it we cannot say it's all up to demand response also it's difficult to change people's behavior so it needs to be automated people need to have a revenue from it otherwise it's not participate and and then I mean what I already said the sector coupling can also be be something that we need to further look at I mean we electrify a lot but will that really work in the long run we need to ensure that we have enough availability at all times so we can basically use electricity that we want to use at the moment we want to use any others want to chime in maybe from a yours perspective as well I'll say that in preparing for this I looked over a brattle report from I think last year and I think it concluded on the I think it was demand response not the full range of DERs that it concluded sort of looking ahead to the great potential that we've all talked about that on the technology side they thought that we're about halfway there of having existing technologies so there still is a big chunk to go on the policy side I I I think we're about five percent there quite frankly that I read a another analysis that said that across the United States on average our utilities are only employing about one percent of the energy efficiency that they could from their gas gas and electricity side that's one percent and that's for an area we've been in for 40 years and we know the technologies we know lighting we know insulation um and so if we're going to get this dynamic flexibility into the system I we have to have I think a very different approach on policy that's what I was talking about because otherwise we may still be 30 years from now great we have about five percent of our load participated and that's not going to cut it Fabio sorry around please go ahead oh no I just just one quick thing I wanted to add is the consumer customer perspective right I think we think that there's a lot of resources out there but how much of the resources is a customer actually going to be willing to participate in the markets right we we tend to think of it from a very technical potential capability perspective saying hey there's I don't know 10 million heat pumps hey they're all going to be flexible but do we actually have the construct for the customer to make it happen so I think that's something you'll have to think about yeah just to add to that I mean do we need a policy pusher let's say Paul takes deciding that you have to participate then because honestly I mean at least personally and I don't think that everyone wants to participate because they just want to use that as they do today and maybe they will participate if there's a big revenue but I mean they don't want to feel it in their in their daily life and and another huge concern from policymakers in the public is going to be privacy that you're talking about literally getting information about how you know usages go on in in the buildings and there's the technical answer don't worry we've got it covered which I think is actually true but um whether regulators and policymakers are willing to depend upon the technologists for what they view as a lot of untried if you're talking about thousands of homes and their usages and businesses potentially being exposed so I think the privacy and the data concerns are huge from the policy makers perspective want to add another perspective yeah I wanted to add another perspective on this I think I agree technological progress has been has been significant impressive but I will also say some things do not change fundamentally a washing machine remains a very inexpensive device and so thinking that someday we will put on remote control capability and real-time telemetry only so that a washing machine can provide frequency control services to the system operator I highly doubt this right because the extra cost is is so high with respect to the the benefits that a washing machine owner can get achieved from that I think we also need to accept that the more more prestigious grid services will be covered probably by assets which are more expensive like electric vehicles right and here because most of the things most of the technology comes out of the box the intelligent meter the remote control software the capability all these things they come out of the box when you buy an electric vehicle wow it's it's better than any kind of computer it's it's really it's amazing and we need to make sure that from a regulation perspective we can make use of them even if they are behind the the let's say the the fiscal meter which might be stupid but you have a very intelligent device behind it yeah so how can we make sure that it is possible to use this is a a regulatory question and on top of that let's say the you have the the trust of course the complexity the coordination and here I think you have the blockchain approach probably there would be other approaches but I would say this this remains important the putting the puzzle all pieces of puzzle together remains challenging let's say there's not a single solution yet so this this kind of connects nicely to this question of you know Terry Oliver asked about business model implications and hearing the story here you know this new modalities of flexibility will create new opportunities are these opportunities going to be significant are there going to be new players are still things going to be carried out by existing utilities what's kind of the picture of the future that you see and maybe we could start with Diane on that well traditionally the discussion in the United States on business models in the last decade has been because we from the regulated utility should we move our regulated utilities off of cost of service to performance based rate making where you're getting incentivized or penalized based on the outcomes of certain goals set forth for you and one of our states Hawaii just in December really did the first major move of the entire utility towards this system but it took them three years and literally millions of dollars of external stakeholder resources to make that happen that is not a replicable model in the United States for our utilities across 50 states to each have those types of resources and spend that amount of time because we'll be a decade at best really making major changes so I think we have to instead sort of reverse the way we're looking at this and I'm not talking about the wholesale markets and especially I think in Europe where you have a lot of RTOs and you I guess have also got your DSOs in place that that can really use the markets but in the United States we don't have that level of structure so I think it's sort of the reverse of if we have a goal whether it's the federal level or state level up we are decarbonizing our grid then what is the amount of demand flexibility that really can bring those costs down that can make that grid operate well that can provide benefits and that's what I was saying in my remarks that's the goal we need to understand and get to and then we work our way backwards 25 years to now of what do we need sort of year by year increments as a country and then at least in our major states and maybe some other smaller one and then you start to get the funding but if we I'm very worried if we say we're going to approach this problem the way we have everywhere else we don't have that amount of time under climate to be having this discussion 10 years from now or 15 years from now so I'm advocating on a policy side we say what's that end point we got to get to how do we work backwards and then we literally put in the money to make it happen which is very different from having a screen of cost effectiveness up front you know in in the in the picture that has been painted so far there's kind of this implicit assumption that data seems to flow freely and openly and we see a ton of limitations in terms of that happening in the real world today maybe rom can you comment a little bit on kind of from a building owner perspective the issue of data and then I would like to hear the same from Gerda about the perspective of DSOs DSOs Gerda and Fabio and then Diane from a regulatory perspective so um we all start a little bit on the anecdotal side so when we started our work on smart thermostats in 2013 we said hey you know what we're going to run these trials we're going to get all the data we can on every thermostat that's out there or whatever 20 30 000 thermostats pull all the data in right because we didn't know what data we would need and I think after seven or eight years have having gone through the data journey and by the way privacy laws have evolved quite a bit in the meantime too um I think the most important thing is to understand what data you actually need yes there's a ton of data flowing around but too much data is not necessarily a good thing either so the most important thing I think is figuring out how you can do the measurement and validation um and that might mean that you don't need data from every one of those devices it could be that the data flows through the aggregator or the market product provider with an audit chain right and maybe that's what is happening in Europe with Gerda and Fabio right but I think that's um we have to get to the point where we have to be comfortable that we don't have to reach all the way in and get every piece of data the manufacturers whether it's a storage manufacturer or the thermostat manufacturers they have their agreements with the customer we adhere to those agreements we work with the manufacturers create an audit trail create a data chain and that way we can do our m and b uh more appropriately I think um so anyway but it's that's our experience with the data that it's not just asking for everything or too much data is not necessarily a good thing I agree I agree the data overload is not really what you're looking for um companies especially also system operators they're not even able to deal with all the data to process it so really focus on the aggregate data that you need um only that that you actually need for your role let's say so we really focus on data availability which is the role dependence um so you don't have any data available that you don't need um and I think that's that's also very important because otherwise you get with the an overkill of data which you cannot handle on the you you will lose the data that's actually relevant to yeah so the experience we made in Europe is I think a system operator transmission system operator we interface with the aggregator but we will not ask to see what the single electric vehicle is doing I think our guys from the control room they they wouldn't make any use of of this data so it's uh it's let's say it's useless to try to collect it as a transmission system operator at the same time we need to ensure that somebody validates the single data so to exclude fraud until we see a key role of maybe of the aggregator of the distribution uh system operator who also typically runs the smart meter or operates the smart meter so somebody needs to to do these cross checks you could probably also do this again as I say in a blockchain they have these automatic audits automatic analytics but we do not see you need to see the single data and once you exclude this you already solve a lot of privacy issues right because you send less data around from one area to another it does not end up on ternar computers what Mario Rossi has been doing with his electric vehicle yesterday evening so if it's not there it's not a privacy issue at the same time I think there's still some let's say problems to solve if you are an electric vehicle owner sometimes you have to sign up a lot of agreements in order to share your data with the aggregator with whom you are signing a contract right because he's selling your flexibility so there's probably some things that can be simplified still but overall I think it's uh it's an issue that can be handled and Fabio just as a follow-up on this before hearing from Diane I how will you trust whether that aggregator who's collecting all those measurements from the EVs what they're reporting to you as a reduction is an actual reduction how do you resolve that it refers to baseline methodology basically right so in this case this is why real-time telemetry is so important because this is I think the best way of measuring what the user would have done in absence of the dispatch command right that's so you know four seconds before the dispatch command was sent you you know what what the user was was doing and of course you as a system operator you only see the aggregate of this this means that somebody else needs to ensure needs to ensure that the measurements the single devices are sending to to the aggregator and then transmitting to the system operator are actually valid is an important point um there are different options of course there is a key role for the distribution network operator because he runs the meters so he can see if the integral the 50-minute integral of the four second values actually match with what was measured actually with the fiscal meter and at the same time I think if you track all this in a blockchain and it means that the history is not immutable it's not mutable anymore it cannot be changed anymore this is a huge layer of trust that you add to the system right because gaming sometimes you you try to make things match exposed but if you send real-time the measurements think it's difficult and much more difficult to do gaming and also work on certified metering yeah at least the meters are certified and they cannot use whatever meter they can they can think of that but it will also help and Diane what what has been kind of you know from a policy perspective around data because I've seen there's a lot of obstacles on that and regulators are constantly trying to play catch up with technology on that domain well I was just actually extremely pleased to hear all of the technical folks here tell me that less data is actually what's critical and you have a good sense of what that data is and you have the abilities through blockchains or other processes to ensure privacy and aggregation etc so those are all great answers two thoughts come to mind one is I mentioned before the need for education of policy makers of regulators of stakeholders this alone would be a whole area to embark upon to really come very quickly initially talk about the data talk about privacy so that there is some level of education we can get up to but the other thing that comes to mind and I don't know enough about this really is in the United States we run both retail demand response programs and our wholesale markets have demand response and now with this new FERC order 2222 and 222a the idea is to really jump shot the wholesale demand response market and so understanding one area I know has been to avoid duplications that from participation by a customer load in both a retail program and then through aggregation and participation in the wholesale markets how are we going to make sure that everybody knows what the rules are and what the data is that's provided to one program versus another program and anytime you're talking about the retail level level you're talking about the state regulators and they are responsive to the public very much they're appointed by governors they're constantly going before their legislators so they've got to have real strong answers why is the data needed and how is it protected and and those the more we can think about them up front and have documentation of what are good results the more you're going to be able to move policy forward I think I'm going to summarize a few of the questions that are in the q&a and formulate a question out of that both James Buchan and Mark Martin they commented on this idea of maybe there is individual resources large resources that are more meaningful and there is a need to protect the individual's privacy but is there some framework where for that individual equipment information could be shared would that make sense and then James points out that for example in the case of a car it's important to understand how the vehicle batteries degrading as it offers services to the grid who makes that determination where is that data sitting I think that's kind of the gist of the questions so any anyone wants to take up these questions maybe on the on the battery the EV battery for example the question is also how much does a customer care about all of the information it's information that maybe as a as the energy community would like to know because then we know how much we can use it and and what is it what is really the the issue for the customer but I don't think each and every customer wants to know exactly what's happening with the battery of their car they just want to make sure that they don't have to do anything they can use the car whenever they want and if they can get some money for it's fine that's super nice but I don't think they want to they want to see the data and really figure out themselves what's happening with the battery yeah that's a yeah please go ahead Ram that's okay okay yeah I think I think that's a good point but I think the point that's brought up here is degradation reduces the value of your vehicle somehow or whatever asset you're considering and how do you mediate that between the individual the aggregator and of course from a system operator maybe that that's like one step removed so so one of the things right is that I mean so there's an aggregator and there's a product manufacturer sometimes they're the one and the same sometimes they're not so in a retail demand response programs for example we have the the Nests or the equities being aggregators themselves of their induced devices and one of the claim advantages for that is that they know what the customer preferences are because they are getting the data they're getting set points they're getting all these things right whether it's an even for an EV manufacturer like BMW I think is already doing some trials with PG&E for example they can then manage battery degradation they can manage the customer's preferences they know when the when the EV is going to charge etc so they can actually use the data to manage the controls and then they aggregate it from a whole bunch of these induced devices or vehicles and then they bring it back into the market right so in that way you have this layer of abstraction between the grid and the aggregator and then the manufacturer is managing the customer's preferences behind the behind the fence for lack of a better word so I think it again it's something that the manufacturers the product providers it's their responsibility to make sure that the customer is satisfied with the overall experience and that that's why I think they are very important as a participant in any kind of aggregation that happens or market participation that happens so when I say that we don't need all kinds of data you need the data for the controls but you don't need the data for the grid management the controls can be behind the manufacturers sorry yeah we have time for one last question and I wanted to bring up this issue of security so only HSN has actually observed that you know as you open up systems to more controllability it creates not just issues around privacy but but also the important question of security and depending on how you design the system maybe you can have more security if you just send a price signal and let people respond and to actually send control signals so I wanted to understand maybe from starting with Diane and then Fabio or Gerda how does security considerations play a role in policy as well as you know from a system operator standpoint you know as you're starting to engage with these aggregators you know how do you see security as an issue for for the system I'll say real quick and then I want to have one minute at the end on equity and what are we going to do about low-income communities but when I was a commissioner and we were first rolling out our smart meters in California I remember that we had a session for commissioners on security and cybersecurity what we found out is we knew nothing of this world so that's all I'm going to say is you cannot assume that your average regulator at least at the state level knows anything about security has staff that knows anything and this is another piece of the puzzle that has to be thought about with education with expert resources made available what the answer is I don't know but I just know the regulators don't have those resources currently Fabio anything to add there yeah to add on this of course we have to learn on on the way cybersecurity is an important topic but say we don't have the solution I wanted to add and it's an observation about all I was saying that that's the implicit demand side flexibility is inherently easier to secure yes and no but still I would say as a system operator you need a toolbox which also includes explicit demand side flexibility so you cannot just exclude this because in the end let's say if things go wrong we go badly you need a last resort way of intervening let's say and this has to include explicit demand side flexibility especially in the system 10 years from now 20 years from now where there are no big power plants right sounds scary but this is the framework we are we are evolving towards and so even if it is if it would be inherently more secure to do everything with implicit demand side flexibility I think you cannot simply only rely on this very good and to actually yeah on cybersecurity also in Europe we're now working on a network called regulation on cybersecurity so it's really high on the agenda as well to focus on and just to kind of end our webinar today I think Diane touched a very key point which I also wanted to bring up which is this issue of equity and access many of the technologies we talked about today they're quite advanced and they can be quite expensive how do we ensure that this demand side flexibility transformation is not limited to just those that are higher income and just to before answering this question I just wanted to remind everyone that we have a final workshop on grid decarbonization coming up on the 28th of April and 80 percent clean electricity by 2030 to conclude our series so a final word from each one of you on this issue of equity and access well if I can start because when I was a commissioner I also oversaw the low income programs and it can be done but it's going to be costly typically low income programs in the energy world in the United States are subsidies they don't pass through the normal cost effectiveness screening and you also have to think about again at least in the United States our low income population overwhelmingly is more in multifamily buildings than in single family buildings and multifamily buildings have all these problems under energy efficiency of the owner and the occupant and those are going to be the same for this world as well and we didn't we haven't done a good job of solving it but we have to think consciously of it and they're not necessarily going to have those EVs if they're in apartments they're not going to necessarily have a way in which the building owner is going to put in the new infrastructure so that you can have those heat pumps replaced so that you can have the electric water heaters I think you know this again needs to be an area very carefully thought out because otherwise 10 years from now we're going to say oh guess who's participating in these programs it's you know the middle income and higher and I don't know that you're going to get as much participation but that sure tells you you're going to have political pushback if the lower income customers are the ones paying for a lot of these costs so it's tough we haven't done a good job necessarily on the low income side but the sooner we get started and make it a goal I think the sooner we can start to get some answers but it's going to cost money it's going to be more expensive to make this an inclusive of low income participants than if we just ignored it but in the long run it's going to make it sustainable I think. Great any comments from from the others or final words? I agree with Diane I think it's a big issue it's an area focused on a big issue but I think we should probably also look at non-device-based responses like behavior that can be aligned to affordable housing communities. Okay everyone thank you very much for the panelists this was super exciting and lots of things to to think about and I I believe demand flexibility will be a key component of any decarbonization solution we have to figure that this out quickly. So looking forward to the last seminar in the series on April 28th with Arun Majumdar and Sally Benson discussing our path to clean 100% clean electricity so how do we go beyond 80% which is a huge challenge thank you everyone see you next time. Thanks all. Thank you. Bye thanks.