Understanding Tariff Types

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Understanding Tariff Types

russell
Good afternoon,

I am attempting to understand how to work with the more advanced tariff features and was hoping for some clarification after reading the JavaDoc, manual, and a little bit of testing.

I guess the first part is with the rates, specifically the option to add withMaxCurtailment. Now, my understanding is that this option applies to tariffs such as interruptible consumption, and that you can specify an amount, for the sake of argument let's go with 0.5. Now then, I can send a message (EconomicControlEvent) with a curtailmentRatio of 0.4 and the customers with this tariff will cut their usage to 60% of norm. Is this correct? How then does the BalancingOrder affect this?

Second, I cannot figure out exactly what the variable rate tariffs do. I understand how to set the rates, that I must give a min, max, and expected mean, but then how do I operate with them afterwards? Again, a very simple example, if I put a min of -10, a max of -50, and an expected mean of -30. How exactly do I control the rate? I see HourlyCharge, but I do not understand the relationship here.

Thank you
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Re: Understanding Tariff Types

grampajohn
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Hello, Russell -
russell wrote
I am attempting to understand how to work with the more advanced tariff features and was hoping for some clarification after reading the JavaDoc, manual, and a little bit of testing.

I guess the first part is with the rates, specifically the option to add withMaxCurtailment. Now, my understanding is that this option applies to tariffs such as interruptible consumption, and that you can specify an amount, for the sake of argument let's go with 0.5. Now then, I can send a message (EconomicControlEvent) with a curtailmentRatio of 0.4 and the customers with this tariff will cut their usage to 60% of norm. Is this correct? How then does the BalancingOrder affect this?
For interruptible-consumption types, the maximum possible curtailment in any timeslot is the product of the actual consumption and the MaxCurtailment ratio. Curtailment can be used for economic control (to reduce usage when prices are high, for example), and/or for up-regulation in the balancing market. Brokers offer regulation capacity to the balancing market through BalancingOrder messages, which continue in effect from one timeslot to the next until they are superseded by new BalancingOrder messages against the same tariff. If both are used in the same timeslot, the economic control applies first, and any remaining curtailable capacity can be used for balancing.

The effect of a BalancingOrder for an interruptible-consumption customer is that the broker can be paid for the up-regulation, but the customer is not paid - instead it presumably benefits from lower energy cost overall.
Second, I cannot figure out exactly what the variable rate tariffs do. I understand how to set the rates, that I must give a min, max, and expected mean, but then how do I operate with them afterwards? Again, a very simple example, if I put a min of -10, a max of -50, and an expected mean of -30. How exactly do I control the rate? I see HourlyCharge, but I do not understand the relationship here.
Once you have a subscription for a variable-rate tariff, you must either issue VariableRateUpdate messages (which convey the HourlyCharge values) for each timeslot, or the customer will be charged the expectedMean value for that timeslot. Customers evaluate variable-rate tariffs based on several factors, including the expected mean, the max, the actual realized price for that tariff so far, and the amount of energy already sold under the tariff. See Eq. 12 and 13 in the 2016 specification for details. So it can be hard to get the first few subscriptions, especially from the more rational customers. If anyone has a better idea on how to get initial adoptions of a VR tariff, we would be interested.

Note that prices for a VR tariff must be announced no later than n timeslots ahead of time; late announcements will be ignored. Details are in Section 3.1.1 of the spec. Customers generally prefer earlier announcements, and for some customers, earlier announcement improves their optimization results. The benefit probably tails off beyond 8 hours or so; details vary by customer type.

Does this help?

John
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Re: Understanding Tariff Types

russell
Hello, John,

Thanks for your reply.

The gist I get then is that Economic Controls apply for controlling the amount of energy accessible for a tariff. So, in another simple example, if a customer uses 100kWh normally and I curtail to 0.5 where up to 0.6 is allowed, I can expect the customer to only use 50kWh?

With the Balancing Orders, I have the option to up regulate during high energy prices, that is, if energy is normally averaging €10 per kWh but suddenly we cleared for €20 and our normal price is 15 per kWh, I could send an up regulation for an additional €15 and be making €30 per kWh. My understanding is that then this is persistent until a new Balancing Order is sent?

One more question, what happens if these are done on normal Consumption Tariffs? I would assume I could still up regulate, but I also assume that the economic controls are ignored?

Thank you so much.
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Re: Understanding Tariff Types

grampajohn
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russell wrote
The gist I get then is that Economic Controls apply for controlling the amount of energy accessible for a tariff. So, in another simple example, if a customer uses 100kWh normally and I curtail to 0.5 where up to 0.6 is allowed, I can expect the customer to only use 50kWh?
Yes. If a customer intends to use 100kWh for the current timeslot and is curtailed by 0.5, then it will only use 50 kWh. However, the 50 kWh it did not use will most likely be shifted to subsequent timeslots. So it might try to use 150 kWh in the following timeslot. If you curtailed by 0.5 again, it would use 75 kWh and shift the remaining 75 kWh to subsequent timeslots. A broker exercising economic controls should anticipate this.
With the Balancing Orders, I have the option to up regulate during high energy prices, that is, if energy is normally averaging €10 per kWh but suddenly we cleared for €20 and our normal price is 15 per kWh, I could send an up regulation for an additional €15 and be making €30 per kWh. My understanding is that then this is persistent until a new Balancing Order is sent?
I assume you mean €.10/kWh, right? But a BalancingOrder is really a bid in the balancing market. It only affects customers if up-regulation is actually needed a given timeslot -- in other words, if brokers have not purchased enough energy to supply what their customers are using. And of course, the broker is only paid and the BalancingOrder exercised if the bid clears. Remember that BalancingOrders will not do anything unless the affected tariff either allows for curtailment, or contains a RegulationRate. The RegulationRate specifies what the customer is paid for regulation; normally the payment is positive for up-regulation, and negative for down-regulation. Ideally, the down-regulation price is better than what the customer would otherwise have to pay for the same amount of energy.
One more question, what happens if these are done on normal Consumption Tariffs? I would assume I could still up regulate, but I also assume that the economic controls are ignored?
Nothing happens - economic controls don't work against straight CONSUMPTION tariffs, and balancing orders will never be exercised because the available regulation capacity is always zero.

Cheers -

John
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Re: Understanding Tariff Types

russell
grampajohn wrote
With the Balancing Orders, I have the option to up regulate during high energy prices, that is, if energy is normally averaging €10 per kWh but suddenly we cleared for €20 and our normal price is 15 per kWh, I could send an up regulation for an additional €15 and be making €30 per kWh. My understanding is that then this is persistent until a new Balancing Order is sent?
I assume you mean €.10/kWh, right? But a BalancingOrder is really a bid in the balancing market. It only affects customers if up-regulation is actually needed a given timeslot -- in other words, if brokers have not purchased enough energy to supply what their customers are using. And of course, the broker is only paid and the BalancingOrder exercised if the bid clears. Remember that BalancingOrders will not do anything unless the affected tariff either allows for curtailment, or contains a RegulationRate. The RegulationRate specifies what the customer is paid for regulation; normally the payment is positive for up-regulation, and negative for down-regulation. Ideally, the down-regulation price is better than what the customer would otherwise have to pay for the same amount of energy.
I'm sorry, I am still a bit confused. So, this is to take effect when I have a shortage of energy? I am looking into finding effective ways to deal with capacity charges and changes in the price of energy and this seemed like a viable approach. Perhaps I am mistaken?
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