IEEE Power & Energy Magazine - September/October 2019 - 76

The ability to connect devices, create market signals, and
influence generation and consumer behavior within an overarching
energy-management framework is the essence of the eIoT.
system imbalances and costs compared to the transactive
energy model. A baseline error introduced in the day-ahead
market increases production costs not just in the day-ahead
market but also introduces a greater net-load error residual
in the real-time market, causing additional costs and imbalances. These imbalances, if left unmitigated, degrade system
reliability or otherwise require costly regulating reserves
to achieve the same reliability. An additional baseline error
introduced in the real-time market further compounds this
cascading effect with other costs in that market, amplifies downstream imbalances, and further requires regulation
capacity for its mitigation. Such works demonstrate how simulation can be used to evaluate the implications of new technoeconomic electricity policy options.
Finally, the transformation of the grid's architecture brings
about new stakeholders and jurisdictional challenges. Distributed generation transforms electricity end users into new market prosumers who must ultimately be accommodated within
an evolving economic and regulatory structure. Additionally,
these new players span the various layers of the electric grid's
jurisdictions, whether they are residential, microgrid, local, or
regional. A majority of these newly empowered stakeholders
will emerge in the distribution system as the grid periphery is
increasingly activated. The role and business model of electric
utilities in this larger and continuously evolving electric power
enterprise control remain an open question.
Ultimately, as the electric grid's transformation takes hold
of the future role of the utility and the emergence of distribution
system operators and aggregators in new and often untested
designs, there is a need to organize and validate these architectural alternatives in terms of a single analytical framework.
An enterprise control approach allows for the simultaneous

assessment of transmission and distribution systems, takes into
account the changing nature of generation and demand, facilitates a greater understanding of the dynamic control properties of the electricity grid, and helps define the interdependent
roles and relationships between new and old grid stakeholders. Advanced computational capabilities make such analyses
increasingly tractable through simulation.

Energy Internet of Things
What Is the Energy Internet of Things?
The eIoT is one application of the Internet of Things (IoT). It
is a technology that has expanded the use of communication
technologies over the Internet from user-to-user interaction
to device-to-device interaction. As a way to connect humans,
computers, and devices, the IoT presents itself as a key
enabling technology of new energy-management approaches.
Perhaps the main reason the eIoT is so important is that the
IoT vision, from its very conception, was meant to enhance
supply-chain management solutions (as shown in Figure 5)
with intelligence in edge devices (e.g., machines, material
handlers, and products). In such an architectural transformation, each thing would have device-level, Internet-enabled
sensors that would serve to create its informatic counterpart
on the Internet. As the IoT proliferated through supply chains,
it would provide unprecedented visibility of supply-chain
operations. Each piece of raw material, work in progress, or
final product could be tracked in near real time. When this
information is relayed to enterprise (control) information systems, it could be used to support reactive and proactive decision making on how to best manage supply chains. Many of
the leading Industry 4.0 concepts rely on the IoT paradigm.

Auto-ID
(Product Sensing)

Product Data
Operational Data
Measurement

Operation
Product Activities
Database Resources

Analysis

Execution

Decision
Software Agent

figure 5. A closed-loop control framework Industry 4.0 production system enabled by the IoT. ID: identification.
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IEEE Power & Energy Magazine - September/October 2019

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