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C3 Guest Lecture Series

Pricing mechanisms for customer integration with grid operations
Paul De Martini
Paul De Martini is Managing Director, Newport Consulting Group. Paul provides management consulting services to technology, energy and venture executives worldwide regarding business strategy, market development and technology management. He is on the advisory boards of several cleantech firms. Paul is also a visiting scholar at the Resnick Institute for Sustainability at the California Institute of Technology. Paul was recently Chief Technology Officer and vice president, Innovation for Cisco’s global Energy Networks Group. Previously, he was vice president of Advanced Technology at Southern California Edison. Earlier, he was an officer with ICF International, Sempra Solutions and PG&E Corporation in competitive energy services and electric utility operations. Paul holds an MBA from the University of Southern California and a BS from the University of San Francisco. He is a State of California certified Electric System Operator. Paul is currently a member of DoE’s GridWise Architecture Council and recently participated on the European Commission’s 2035 Strategic Research Advisory and MIT’s Future of the Grid Advisory Committee.
U.S. policy is to allow owners of distributed resources to effectively and reliably provide their services at scale, and operate harmoniously on an interconnected distribution and transmission grid. The result is that several regions are reaching proposed capacity levels for distributed generation that exceed traditional operating and engineering practices for distribution systems. This is leading to challenges for power quality and reliability because of three issues: (1) current wholesale pricing models for distributed resources do not reflect distribution level information related to location, reliability or power quality considerations; (2) pricing schemes involving real-time spot market prices, like Locational Marginal Pricing, are likely to create significant volatility for customer DER that is not desirable from either from operational or commercial perspective; and (3) integrating distributed resources into wholesale markets without aligning distribution control schemes may create unacceptable consequences. This talk will discuss a framework for the development of a class of pricing mechanisms that both induce deep customer participation and enable efficient management of their end-use devices to provide both distribution and transmission side support.
October 11, 2012
234 Larsen

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