Distributed Energy Resources: New Markets and New Products

Proceedings of the 50th Hawaii International Conference on System Sciences (2017), ISBN: 978-0-9981331-0-2

10 Pages Posted: 11 May 2017

See all articles by Richard Tabors

Richard Tabors

Tabors, Caramanis, Rudkevich

Michael Caramanis

Boston University

Elli Ntakou

Boston University

Geoffrey Parker

Dartmouth College

Marshall W. Van Alstyne

Boston University – Questrom School of Business

Paul A Centolella

Tabors, Caramanis, Rudkevich

Rick Hornby

Tabors, Caramanis, Rudkevich

Date Written: May 8, 2017

Abstract

The rapid introduction of Distributed Energy Resources (DER) into the retail/distribution sector of the electric power system has raised questions concerning both the economics and control of the power system. This paper presents one market paradigm that builds upon extension of the logic of Locational Marginal Pricing into the distribution level arguing that this extension is necessary if there are to be competitive forces that bring new technologies to market while at the same time assuring the reliability of service. We introduce three concepts: first that there are only three core products (real power, reactive power and reserves) and that all other products are combinations of these; second that it is necessary to calculate Distributed Locational Marginal Prices (DLMP) in order to value any DER; and third that for there to be a market for DER it should be structured as an economic platform.

Keywords: platform, two-sided market, electric power, renewable, DER, distributed energy resources, locational marginal pricing

JEL Classification: L1, L9, Q2

Suggested Citation

Tabors, Richard and Caramanis, Michael and Ntakou, Elli and Parker, Geoffrey and Van Alstyne, Marshall W. and Centolella, Paul A and Hornby, Rick, Distributed Energy Resources: New Markets and New Products (May 8, 2017). Proceedings of the 50th Hawaii International Conference on System Sciences (2017), ISBN: 978-0-9981331-0-2 . Available at SSRN: https://ssrn.com/abstract=2964982

Richard Tabors (Contact Author)

Tabors, Caramanis, Rudkevich ( email )

75 Park Plaza
Boston, MA 02116
United States

Michael Caramanis

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Elli Ntakou

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Geoffrey Parker

Dartmouth College ( email )

Department of Sociology
Hanover, NH 03755
United States
603-646-9075 (Phone)

HOME PAGE: http://engineering.dartmouth.edu/people/faculty/geoffrey-parker

Marshall W. Van Alstyne

Boston University – Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
617-358-3571 (Phone)

HOME PAGE: http://questromapps.bu.edu/mgmt_new/Profiles/VanAlstyneMarshall.html

Paul A Centolella

Tabors, Caramanis, Rudkevich ( email )

75 Park Plaza
Boston, MA 02116
United States

Rick Hornby

Tabors, Caramanis, Rudkevich ( email )

75 Park Plaza
Boston, MA 02116
United States

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