Decentralized Allocation in Electrified Energy Systems

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Pedro HJ Nardelli, Pedro E Gória Silva, et al. :

"The technical specification described by Nardelli et al. (2021) that offers a clear design for a decommoditization of an electrified energy system through its communization. This means that energy production is not subordinated to monetization, and access to energy is open to all. In our view, this would be an intentional path-breaking in the commodification tendency taken in electricity markets, as studied by Apajalahti and Kungl (2022). The communization of the electrified energy system is to be deployed in such a way that it can at the same time (i) weaken the self-reinforcing mechanisms that sustain markets and for-profit energy generation-transmission-distribution and (ii) enable other stronger self-reinforcing mechanisms that are necessarily capable of supplying the energy demand.

It is possible to foresee different paths toward this being implemented, but the communizing structure desired would benefit from organizing the physical grid as networked microgrids. For non-industrial demand, many actions could be taken: retrofit targeting energy conservation in buildings, flexible demand management when needed, use of heat pumps, increase of small-scale renewable sources at the distribution side (closer to the end-user), and integration of storage units. All these should lead to lower overall energy demand. However, for technical reasons, the supply and demand of electricity in the grid must match closely to real-time. To match supply by the intermittent (but in many ways predictable) renewable sources and demand by controlling storage units, heat pumps, and other flexible loads like saunas and dishwashers, a cyber-physical packetized energy management is proposed by De Castro Tomé et al. (2020); Nardelli et al. (2019) and further extended in (Nardelli et al., 2021), from where the technical details can be found. Although these solutions could, in principle, be integrated into the existing market structure (at least many parts of Europe, as illustrated by the idea of energy communities as reviewed by Gjorgievski et al. (2021) or peer-to-peer sharing reported by Klein et al. (2020)), the proposed idea explicitly aims at treating energy as a commons, or in the terms used here communizing energy. The proposed governance approach is mainly highlighted by Giotitsas et al. (2022), as well as by Giotitsas et al. (2015, 2020). The key idea is that open access to energy based on needs without payments and organize the operation of the cyber-physical energy system based towards managing scarcity moments via a rule-based scheme open for community deliberation. Therefore, the planning is decentralized in many senses: community deliberation of operational constraints of how to handle scarcity of supply, multi-agent BitTorrent-type of energy multiplexing through virtual packetization, and the possibility of coordination of individual, regional and global elements towards a shared goal. The iterative stages of bottom-up and top-down of the multi-agent approach of I-EPOS offers one scalable possibility to perform decentralized planning to enable a widespread of communization in-against-and-beyond the value-form.

We present a case that illustrates this approach. In an electricity grid network, for example, every household has its own preferences for the consumption schedules but these preferences have a collective impact on the performance on the grid as a connected network where supply and demand must match in very low time scales for operational reasons. This affects, for example, the electricity that can be shared, the peak load, and the transmission line capacity. I-EPOS can be used to balance those local (individual, agent’s) usage preferences and the overall grid (global) quality requirements by optimizing the tradeoff between the global cost and the local cost. I-EPOS also performs this optimization in an unsupervised and decentralized manner by collectively learning and combining the agents’ plans, while maintaining privacy and autonomy (agents’ schedules do not need to be shared).

In specific terms, let us consider that every household has: (i) solar generation capabilities, (ii) battery as a storage unit, (iii) electric bike with small battery, (iv) electrified thermal loads like heat pumps, heaters, fridges, and freezers, as well as sauna, (v) appliances that can operate flexibly to accomplish their functions like washing dishes and clothes, and (vi) baseload that does not offer flexibility. Following Nardelli et al. (2021), each household can be virtualized as part of a software-defined energy network that determines a cyber-physical system to operate the energy system as a virtual microgrid based on the operational needs of matching energy supply and demand, as well as managing the batteries. This problem can be posed as an inventory management problem not mediated by money. Every agent defines their own priority plans for usage considering the appliances types (iii)-(v); (vi) is given, but predictable. The distributed generation by solar and the battery are managed as a virtual power plant, where the distributed generation and storage units are virtually aggregated to operate the system. We could call every household as an Energy Client in the software-defined energy network, while the I-EPOS would be the algorithm that runs in the Energy Server; batteries and thermal loads are the Energy Buffers. I-EPOS goal is to build up schedules of use based on explicit request and politically-determined prioritization (e.g., what is more important as a load, an electric bike or a heater or a sauna) that are both acceptable by the agents self-determination and operational for the physical grid. This sort of solution already exists in some places, being compatible with the strict electricity market regulations but, most usually, money mediation takes place. Our vision is that this approach can displace the market if it could be scaled up, creating a self-reinforcing mechanism based on commons (virtually aggregate common pool of resources), following paths of the energy transition posed by Apajalahti and Kungl (2022).

The main limitation of this case study is that it focuses on residential and small commercial building demand, and thus, it should be adapted to be employed for large industrial facilities, transportation, and logistics. As a matter of fact, the proposed communization of energy can only be thought of considering as part of the communization process of the mode of production as a whole. Here, we are (in spirit, but not in practice) reminded of Horvat (2020) and the self-managed socialist enterprise and association of associations. The Yugoslav self-management, shaped by the material and geopolitical conditions, is not a monolithic body of theory. Going back to (Todorovic 1965), we see that the intention to do away with the value-form immediately (or any time soon) is referred to as “socialist romanticism” and dismissed from consideration. The acceptance of the value-form and associated market mechanisms by Kardelj and others was challenged continuously. Echoing Bavcar et al. (1985) via (Kirn 2010), the paradoxical position of workers taking the structural position of a capitalist in the production is not an abolition of capital in any meaningful way. The bureaucracy form that is shaped in this relation to manage the economy allows for the value form to keep existing, as (Hamza, 2016) notes, between the state and the party. In brief, we do not believe that the Yugoslav self-management had abolished value form in any way, and we are skeptical of the potential to do so in the direction it took; where we declare ourselves related in spirit is merely the insisting on the distributed approach, but through the roads not taken–some of which Todorovic would have listed in the romanticist treatise.

In this sense, we claim that by organizing the existing large-infrastructures in a similar manner following the guidelines presented by Nardelli (2022) and indicated by the “clinical” question presented in Table 1. Scaling and passing the critical thresholds of communes has been an oft-cited issue with commons; at the same time, degrowth advocates have issues with large power production systems “because an energy-intensive society based on increasingly sophisticated technological systems managed by bureaucrats and technocrats will grow less democratic and egalitarian over time” even in the case of “green megastructures like high-speed trains or industrial-scale wind farms” (Kallis, 2017). In this sense, there are also issues related to raw materials like copper, iron, and other metals needed to produce electronic appliances, solar panels, and batteries as necessary components of the power grid material infrastructure that need necessarily to be solved in a sustainable non-exploitative manner, both socially and environmentally. Those points are of utmost importance, but require studies that go beyond our aim in this section, which is to show that communizing energy is operationally feasible and, in our view, a necessary (but not sufficient) step for the emergence of a mode of production based on commons as a social form, against value."