IEEE Power & Energy Magazine - May/June 2016 - 60

One of the key elements of the bulk-power restructuring
of the 1990s was definition of the roles, responsibilities, and
information access rights of various stakeholders.

✔ To relieve the pressure on bulk-power generation for

the provision of grid services, bulk-power system operators are beginning to seek assistance from distributed resources and demand-side participation for them.
However, bulk-power system operators do not have
adequate visibility to such assets located deep within
the distribution system. This may result in unintended
consequences when such resources are deployed by the
bulk-power system operator. These may include reactive power/voltage impact due to deployment of assets
with nonunity power factor, unbalanced deployment of
distributed assets, and other undesirable effects. The
interaction between the bulk-power system operator
and the DSO is essential for the proper estimation of
safe levels and locations of deployment of demand-side
assets for provision of grid services.
✔ Bulk power and wholesale energy market operations
are based on the assumption of balanced three-phase
networks, which is quite acceptable at high-voltage
transmission levels. However, as one gets closer to
the feeder laterals in the distribution system, this
assumption breaks down, particularly in the distribution systems in the United States (in some other
countries this is less of a problem as each household
unit is provided with all three phases thus balancing
the phases in the distribution planning stage). This
potential discrepancy between bulk-power and distribution operations can result in unintended consequences when attempting to take wholesale prices to
end devices, even when the prices are adjusted to account for distribution losses. This issue is discussed
further below.

Differences Between Retail and
Bulk Power Transactive Mechanisms
As mentioned earlier, there are differences between bulkpower/wholesale and distribution/retail transactive operations. For example, in the wholesale markets, the transactive agents are primarily entities, barring exceptional cases
where automated bidding and scheduling in organized
markets is carried out by unmanned systems. In contrast,
retail transactions can take place among transactive agents
including human operators, system operation platforms,
and transactive devices, with literally no defined standards
for market operations other than the most basic interconnection standards.
60

ieee power & energy magazine

Planning for the bulk electric system is understood with
sufficient uniformity across regions so that bulk-power system planners manage data to develop cost-effective plans. In
contrast, with the proliferation of DR/DERs, planning in distribution/retail networks faces rich contextual variability that
must be resolved and understood to be properly implemented
in a uniform planning process. For example, the phase imbalance consideration has different consequences if the distribution system is delta-connected rather than wye-connected.
There are also differences in market-based pricing mechanisms. For one, bulk-power/transmission networks are
assumed to be phase balanced, whereas the distribution systems at the grid edge are generally phase unbalanced. This
can lead to unintended effects upon the local distribution
system. For example, the transaction between a prosumer
having rooftop solar units on a house utilizing phase A and
a neighbor using phase B and charging its plug-in EV can
give rise to excessive phase unbalance and consequent neutral currents. Any constraint on the resulting neutral current
imposed for reliable distribution system operation would
give rise to differential prices (DLMPs) on phases A and B
despite the fact that the two neighbors may have agreed on a
single price in their transaction.
Masking the price differential between phases A and B
amounts to allocating the incremental distribution system
operation cost (e.g., an increase in losses due to neutral currents) to the rest of the consumers. It is conceptually possible
to develop DLMPs per phase by incorporating phase unbalance limits, but in the absence of such pricing schemes it is
important for the DSO to track and account for such cost differentials and impute a system operation cost, albeit small, to
the culprit transactive parties.

Illustrative Example
In this section, a specific use case is explored, where a utility
in southern California [Burbank Water and Power (BWP)]
is considering leveraging a cross section of TE systems and
DSO mechanisms to address operational and business model
challenges it faces with increased levels of renewable and
distributed generation motivated by California's renewable
portfolio standard targets of 33% of electrical energy by
2020, 40% by 2025, and 50% by 2030.
BWP is currently in a retail planning coordinator role
where it defines the objectives and the means of meeting
such objectives in a manner that balances sustainability, reliability, and affordability.
may/june 2016



Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - May/June 2016

IEEE Power & Energy Magazine - May/June 2016 - Cover1
IEEE Power & Energy Magazine - May/June 2016 - Cover2
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IEEE Power & Energy Magazine - May/June 2016 - Cover3
IEEE Power & Energy Magazine - May/June 2016 - Cover4
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