Across the diverse electric power industry, stakeholders utilize independent methodologies to value investment decisions ranging from the residential purchase of a smart thermostat to grid-scale investments in generation and transmission assets by utilities, regulators, private power producers, and market/grid operators. These valuation approaches are “consistently inconsistent”, relying not only upon differing, often opaque assumptions with respect to economic and engineering inputs, time, geographic, and power system scales, but also due to the closed-source inner workings of black-box modeling tools.
To address the inconsistencies and lack of transparency across existing valuation methodologies, this three-year effort will begin the development of a comprehensive and transparent framework to value the services and impacts of grid-related technologies. The framework will be based on a systematic approach to the definition and documentation of scale, scope, and assumptions that define any valuation or modeling activity. Successful development of this framework would allow electricity-sector stakeholders to conduct, interpret—and most importantly, compare—valuation studies with high levels of transparency, repeatability, and extensibility. The valuation framework has to be useful to assess “regulated investments (T&D, generation, efficiency programs, load mgmt.) as well as investments by private sector entities (e.g. merchant generators, load aggregators, end-users). Government and non-government organizations may also find it useful for examining, comparing, and making decisions regarding new and existing grid-related technologies.