S&P Innovation Manager Describes Technology to Improve the Financial Use Case for Microgrids

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Isabel Tang, senior innovation manager at S&P Global Platts describes Distro Energy, a new energy trading platform designed to facilitate open energy market operation, help balance the grid, reduce the burden of microgrid implementation and improve the financial use case for microgrids. Watch the video of Lisa Cohn, managing editor of Microgrid Knowledge, interviewing Tang.

Cohn and Tang launched the interview by discussing the Distro Energy trading platform and how it aims to helps the microgrids of the world.

“Distro Energy is an exciting and proven new marketplace, and we aim to enable local energy trading to microgrid communities … for the audience of Microgrid Knowledge, for microgrids, this is truly representing a brand new opportunity to capture benefits,” Tang said.

These potential benefits include:

  • Enabling lower energy prices for consumers on the grid
  • Improving revenues for local renewable generation
  • Greater self-consumption of on-site renewables
  • Greater return on investment on renewable assets

Tang pointed out that these benefits occur on the platform through transparent and dynamic pricing, which incentivizes flexibility and demand response.

So, what’s the technology behind the platform? The Distro Energy marketplace features a high-frequency trading environment, a fixed protocol for users who are interested, and it can handle millions of bids and office transactions per second.

This is important, “because the grid is balancing from second to second, and we feel that if we need efficient price discovery, we would enable as much price discovery [as possible] through a high-frequency environment, and this also facilities artificial intelligence trading,” Tang explained.

Stay tuned for more Executive Interviews from Microgrid 2020 Global, published regularly on Microgrid Knowledge.

Each account, or premise, on the platform is given access to an artificial intelligence (AI) energy trading agent. This AI agent learns the premise, the users’ needs, and analyzes millions of data points to trade on behalf of the user in order to remove the burden of 24/7 energy trading and activate superior returns for the end user of the microgrid.

“We want to help drive down the cost of microgrids to society, as S&P Global Platts sees the technology and supporting smaller-scale resiliency as a key part of future energy strategies,” said Tang.

Tang further explained that from Distro’s point of view, there is a disconnect in the market in regards to decentralizing energy.

“We are going to microgrids, and it is really important to get to a smaller-scale resiliency. We support that because there’s embedded generation microgrids, but, on the other hand, there’s legacy market structures,” which tend to be very centralized, Tang said.

“So we dialogue from S&P Global Platts with industry leaders in the power space, in the energy space,” said Tang. “They have called for more efficient pricing and markets to reflect this changing reality, going to microgrid level, or even slightly larger-scale minigrid or lower nanogrid.”

There is no arguing that the energy industry and markets are in the midst of a large energy transition, much of which is focused on the continuing electrification of the grid, and this calls for unique models and strategies.

“We want to facilitate the open market operation while reducing the burden of implementation and improving the financial use case for microgrids,” Tang concluded.

Join us for the next Microgrid Knowledge conference: Microgrid 2021: The World Awakens to Microgrids, May 11-June 3. Speaker applications are being accepted through Feb. 15.

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