Price Communication, Product Definition, and Service-Oriented Energy

Clear communication of product and price is essential to any economic interaction. Energy pricing varies according to regulatory regime and social policy across the country. The outcome of these various approaches can be summarized in all cases as a simple price. Clear standards for communicating that price are necessary for the development of national markets for systems and software that intelligently use and manage energy in homes, commercial buildings, and industrial sites. A similar argument requires clear consistent descriptions of the product bought or sold in a particular market. Electricity product definitions include more than mere electrons, and include such characteristics as source, reliability, and regulatory burden. Energy products also include nonelectricity products such as natural gas. Clear product definitions are critical to the development of products that dynamically differentiate between energy sources. This paper discusses the requirements of clear price and product communications to and from energy markets. We discuss how such communications enable national markets in energy management systems even when there are no national markets in energy. We also discuss how such communications foster the adoption of service oriented architectures in integrating smart grids, and how these architectures will further the goals of smart grids.