Retail Transaction Platforms for California “the grid of people” Edward G. Cazalet, Ph.D. CEO, TeMix Inc. April 21, 2015 Power Association of Northern California City Club of San Francisco

Current California Issues GHG & 50% Renewables Solar Overgeneration and Duck Curve Storage Mandate and Operation Wholesale Market Complexity Net Energy Metering and Cost Recovery Complex and Ineffective Retail Tariffs DER Planning Expanded Direct Access

© 2014 Baker Street Publishing, LLC. All Rights Reserved. The “grid of people” who manage the “grid of things” 3 TransactionPlatformProvidersTransactionPlatformProviders Energy Services Parties Parties Intermediaries - Exchanges - Marketers - Retailers - System Operators - Automated Market Makers Intermediaries - Exchanges - Marketers - Retailers - System Operators - Automated Market Makers Transport Services Parties ServiceInterfaceServiceInterface - Consumer - Producer - Prosumer - Storage Owner - Consumer - Producer - Prosumer - Storage Owner Tenders and Transactions Transactions - Transmission Operator (TO) - Distribution Operator (DO) - Transmission Operator (TO) - Distribution Operator (DO) RegulatorsRegulators

© 2014 Baker Street Publishing, LLC. All Rights Reserved. People who (automatically) manage facilities and devices interacting through transaction platforms 4 Service Interface Grid HVAC System Water Heater Battery Smart Appliances Smart Appliances Interval Meter Transaction Platforms EMS Forward & Spot Tenders & Transactions Generator

© 2014 Baker Street Publishing, LLC. All Rights Reserved. The four big ideas of Transactive Energy (TE): 5 Forward transactions are used to coordinate investments and manage risk. Forward transactions are used to coordinate investments and manage risk. There are two products: energy and transport.. Spot transactions are used to coordinate operating decisions. Spot transactions are used to coordinate operating decisions. All parties act autonomously.

© 2014 Baker Street Publishing, LLC. All Rights Reserved. The two-way Transport product delivers the Energy product. 6 Electric energy (at a place and time) Example: Transmission Connected Substation Electric energy (at a place and time) Example: Transmission Connected Substation Transport Example: Two-way Feeder Transport Example: Two-way Feeder Electric energy (at a different place and same time) Example: Building Electric energy (at a different place and same time) Example: Building Bidirectional forward and spot transactions (tariffs) for transport

© 2014 Baker Street Publishing, LLC. All Rights Reserved. Distribution operator controls transport systems, makes investments and posts forward and spot tenders. 7 Planning & Operations Available Capacity Substation and Feeders Control Signals & Investments Control Signals & Investments Transaction Platform Service Interface Feeder Net Substation Feeder Net Energy Substation Transport Tenders Transport Transactions Transport Transactions Net Sold ΣΣ Surplus --

© 2014 Baker Street Publishing, LLC. All Rights Reserved. Parties automatically control devices/systems, make investments and manage tenders and transactions. 8 Management Algorithms (EMS) (EMS) Device State Devices and Systems Control Signals & Investments Weather forecasts ObjectivesObjectives Transaction Platforms Benefit Tenders ServiceInterface Energy in/out Transactions

© 2014 Baker Street Publishing, LLC. All Rights Reserved. Standardized platforms can be local and interact over large areas. 9 Transaction Platforms Transaction Energy Services Parties Parties IntermediariesIntermediaries Transport Services Parties NeighborhoodNeighborhood SubstationSubstation City/TownCity/Town RegionRegion Balancing Area NERC Area NationalNational

© 2014 Baker Street Publishing, LLC. All Rights Reserved. Platforms may be dedicated to classes of transactions and operated by various entities. 10 Transaction Platforms Transaction Energy Services Parties Parties IntermediariesIntermediaries Transport Services Parties Yearly, Monthly DailyDaily HourlyHourly 5 min, 4 sec Substation Yearly, Monthly DailyDaily HourlyHourly 5 min, 4 sec Transport to Facility

© 2014 Baker Street Publishing, LLC. All Rights Reserved. Many TE Platforms appear as a Virtual Platform to Parties 11 TransactionPlatformProvidersTransactionPlatformProviders Energy Services Parties Parties IntermediariesIntermediaries Transport Services Parties “Frequent small tenders facilitated by automated intermediaries help coordinate investments and operations of all parties.”

© 2014 Baker Street Publishing, LLC. All Rights Reserved. Regulators will have new tools to oversee transactions 12 TransactionPlatformProvidersTransactionPlatformProviders Energy Services Parties Parties IntermediariesIntermediaries Transport Services Parties Regulators: Congress, DOE, EPA, FERC, NERC, Legislatures, PUCs, Munis, CCAs, PMAs, Coops Regulators: Tender and Transaction Data Bases

© 2014 Baker Street Publishing, LLC. All Rights Reserved. Retail platforms can be incrementally deployed to work with current wholesale platforms and retail customers. 13 Consumers, Prosumers, and DERs DeviceDevice Service Interface Service Interface DeviceDevice DeviceDevice Retail Transaction Platforms EnergyEnergy Distribution Transport Forwards and Futures Existing Wholesale Platforms Balancing Operators OneyearOneyear Tenders and Transactions Tenders and Transactions Tenders and Transactions One hour Five minute One month ww OneyearOneyear One hour Five minute One month DeviceDevice Interoperable Transactive Retail Tariffs

© 2014 Baker Street Publishing, LLC. All Rights Reserved. An example of a transactive retail tariff for a consumer/prosumer. 14 Based on my typical usage, I automatically transact with one or more suppliers for a fixed quantity of energy and transport in each hour of the year(s) for a fixed monthly payment (subscription.) If I use less than I subscribed for in each hour then I am paid for the difference at an hourly spot price. If I use more than I subscribed for then I pay for the difference at an hourly spot price. At any time I can automatically buy or sell at current tendered prices. Ref: A Model InteroperableTransactive Retail Tariff: Smart Grid Interoperabltiy Panel (SGIP)

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