California Institute for Energy and Environment (CIEE)

As California seeks to meet its ambitious goals for carbon reduction and support of an electric grid with high levels of renewable energy supply, there is a growing need for large amounts of flexibility from the demand side. This report outlines a system architecture and technology infrastructure to enable dynamic pricing to be used to finely tune coordination between the grid and its customers. Taking a cue from the success of internet architecture, this system — Price-Based Grid Coordination — emphasizes simplicity and universality. It enables a wide variety of ways for prices and other signals to pass from the grid to individual flexible loads and other devices, including multiple possible locations for the intelligence that combines price signals with device functional needs. The report includes a reference data model to knit together information at the utility level, communication protocols, and customer devices, to be independent of any particular protocol. The report also contains a roadmap for technology standards development needs, and a review of the current California policy developments that intersect dynamic pricing.