Abstract:
In an electricity marketplace, real time price information is fed from an price feeder directly to the electricity equipment or the meter of an end consumer, and the consumer is charged a price corresponding to the real-time price as set on an electricity trading exchange. The end consumer is thereby enabled to control his/her power consumption more efficiently. Thus, the end consumer can take advantage of low prices as well as reduce consumption when the price exceeds some limit.

Description:
TECHNICAL FIELD 
     The technical field relates to using the resources in an electricity system more efficiently and to a de-regulated electricity market including different marketplaces for trading electricity. 
     BACKGROUND 
     A major purpose of a marketplace/trading exchange for commodities is to provide a central meeting point where people can buy and sell different commodity contracts. The people buying and selling at the market place are usually referred to as investors. The prices determined at the marketplace are generally interpreted as the “market value” of a particular contract. A marketplace for commodities in most cases attracts two different kinds of investors: hedgers and speculators. 
     Hedgers are people who invest money in a future contract to reduce the impact of future price changes in the market or to ensure access to a particular commodity in the future. Speculators, on the other hand, are people who invest money in the market when they see an economic benefit from it. For example, if a speculator is of the opinion that the price for a particular commodity contract is too high or too low, he may enter the market and buy or sell contracts in that particular commodity hoping to gain money from his transaction(s). The presence of speculators in the commodity market makes a positive contribution since liquidity in the market increases. Also, any “wrong pricing” in the market will be corrected by speculators, thereby enabling hedgers to hedge the market at a price, which is regarded as fair. 
     A commodity market that has had problems in attracting speculators is the electricity market. Where electricity is deregulated, electricity can be traded at different types of marketplaces. Contracts can be traded for short and long term periods. In both a sell and a buy situation, it can be necessary to hedge against price fluctuations. 
     A well-working marketplace needs active sellers and buyers where both parties are able to influence the market. In countries where the electricity market is deregulated, former monopoly companies still have a dominating role. Production companies are often in a position where they can use their position to set prices in the short-term contracts. This is particularly true for a real time balancing market, sometimes termed the “regulating market.” 
     Consumption normally has no influence on the real-time price, and settlement will not take place based on the real time price, but the expected real-time price will have some impact on spot prices. As a consequence, existing electricity markets have failed to adequately attract speculators. There is therefore a need for a market where both sides have the power to influence the real-time price as well as spot prices. This will ensure that prices at which contracts are traded are regarded as fair prices and are not easy to manipulate. When this is the case, the electricity marketplace will attract all type of investors, including speculators. 
     A de-regulated electricity market includes a marketplace to trade spot contracts (day ahead and/or on the day). Spot contracts are for delivery usually during one hour, and sometimes shorter, such as during one half-hour. In addition there is a balancing market which is used by the grid operator to balance/regulate the physical electricity flow on the grid. The members of this market are those who can regulate up/down on very short notice and for short delivery periods, for example, 5 minutes. This market is dominated by the big electricity production companies and has only one buyer, the grid operator. 
     Furthermore, in a de-regulated electricity market there is a possibility for the consumer to choose the supplier. However, delivery contracts are drawn up in a way that the consumer will not be affected by the actual (real-time) price, and thus, he will have no incentive to increase/decrease his consumption. For example, if the real time price increases from 10 cents per kWh to one dollar per kWh, the consumers will not know, and thus, will not have the possibility to reduce consumption. Neither will they know of the opportunity to increase their momentary consumption and benefit if the real time price drops to 5 cents per kWh. 
     The overall goal when designing an electricity system is to make the electricity market as efficient as possible. If the profit is bigger to reduce consumption than to increase production, investments should be made on the consumption side and the opposite should be done if there is more profit in building new production units. 
     Accordingly, de-regulated electricity markets are still very inefficient because:
         1—A very strong position for a few very large companies controls the real-time prices (balancing market), and the balancing market prices influence prices at the market.   2—The spot market prices are usually used to close open financial positions in longer contracts leading to a lack of speculators providing the market with liquidity.   3—The lack of incentive for the consumers to act on real-time price changes in the electricity market.       

     SUMMARY 
     It is an object to provide an improved and more efficient electricity system, and to create a marketplace were both production and consumption can react to changes in real time prices. 
     The inventor recognized that to provide an efficient and effective electricity system, the short-term electricity prices should be disseminated that show the actual “value of electricity” so that producers and consumers can react on these prices. The inventor designed an electricity system were both the buy and sell side can react on price information both sides receive actual price information. When electricity is traded on exchanges, price information is made available for the members and others with access to that information. The prices set by an exchange provide the exchange members with a way to determine how to run their business in a cost efficient manner. 
     For example, a process industry could choose to only perform very energy demanding tasks if the electricity price is at a level where process can be carried out with profit. As another example, a manufacturer could choose to use another way to produce steam by gas or oil if the electricity price is over a certain level. 
     However, today there is no infrastructure in place to support different types of electric equipment with actual price information. This means there is no way to program equipment using electricity to react on actual price information. The electricity systems today are designed based on the fact that electricity costs a fixed price, normally the same price all over the year or a price that varies a little between seasons or between day/night. Thus, today the producers have market power, especially in situations with limited production capacity compared to the demand. 
     In order to overcome this shortcoming, end consumers must also be able to adapt their power consumption with respect to the current electricity price, and thereby, receive a substantial economic benefit from doing so. In that case, the entire electricity market will become more efficient. This in turn will lead to producing and consuming electricity in a way that minimizes the overall cost. The real time price fluctuation as well as spot prices will also be lower in extreme situations. In the long run, providing such adaptability to end consumers will create a marketplace where, (as opposed to the existing systems), both seller and buyer will have impact on the price. 
     In accordance with a preferred example embodiment, real time electricity price as well as spot electricity price information is provided from a price information dissemination unit to consumer&#39;s electricity equipment, such as the consumer&#39;s meter, and the consumer is charged a price corresponding to the real-time price. (Other electricity price information may be used.) The end consumer can hedge his/her electricity price but may also control his/her physical power consumption based on the real-time price for electricity. Thus, the end consumer can take advantage of low prices as well as reduce consumption when the price exceeds some limit. Even if the consumer does not participate in the balancing market, the price on that market will drop if the situation changes from a need to increase production to a situation where the production will decrease. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS  
       The present invention will now be described in more detail by way of non-limiting examples and with reference to the accompanying drawings, in which: 
         FIG. 1  is a general view of a deregulated electricity market including different entities and functions. 
         FIG. 2  is a view of an improved electricity system illustrating the flow of price information in real time. 
         FIG. 3  is a view illustrating the major parts in the system in  FIG. 2  used for dissemination of real time price information. 
         FIG. 4  illustrates prices for different contracts during one day for an exemplary electricity consumer, and 
         FIG. 5  illustrates measured and contracted energy consumption during one day for the exemplary consumer. 
     
    
    
     DETAILED DESCRIPTION  
     In  FIG. 1 , a general view of an electricity system  101  including different entities and functions is shown. The figure includes both the physical electricity flow as well as information flow including prices and volumes. The system  101  comprises a number of producers represented by Producer (or power generator)  103 , which generates and sells physical electricity. The Producer  103  is connected to a common electricity grid  105  via a regional/local network  107  or directly to the grid. The system  101  further comprises a number of consumers represented by Consumer  109 . The Consumer  109  uses electricity for different purposes and is connected to the common grid  105  via a local distribution network  111 . 
     Connected to the electricity system  101  is a number of distributors represented by Distributor  113 . The Distributor  113  manages (owns) the local distribution network  111  connected to the grid  105  or a regional network  107 . Further, a number of suppliers represented by Supplier  115  are connected to the system  101 . The Supplier  115  sells electricity to consumers, such as the Consumer  109 . The Supplier can for example be a production company or a trading company or in some markets the Distributor  113 . 
     The electrical system  101  also comprises an Exchange  119 . The Exchange  119  is a marketplace where buyers and sellers of electricity contracts can meet. Contracts can be defined to cover spot contracts as well as future contracts and forward contracts with delivery from a day to more than a year. The marketplace also includes the spot market covering short-term contracts of usually one hour, but in some cases shorter and in some cases a block of hours. Different electricity markets can have different rules for the spot market. Connected to the Exchange  119  are a number of traders (hedgers), here represented by the Trader  117 . The Trader  117  is a party acting on the electricity market by selling/buying electricity as physical contracts as well as financial contracts. The Exchange  119  is also connected to a number of Financial traders (speculators)  125 . The financial traders  125  only buy and sell financial contracts and are hence never involved in actual delivery of electricity. The financial traders  125  only contribute liquidity in the Exchange  119  that constitutes the marketplace. 
     In the electricity system  101 , there is also a System operator  121 . The system operator  121  is responsible for managing the grid  105 , e.g., the part of the grid designed for voltages above 150 kV. The System operator  121  is closely connected to a Balancing Market  123 . The Balancing market  123  is used to balance the difference in real time between production, consumption and losses, in addition to automatic frequency control. 
     In  FIG. 2 , real time price information flow in the electricity system  101  in  FIG. 1  is shown. Price information is distributed by a price information dissemination (feeder) unit  151  which broadcasts real-time price information broadcasts to various parties. In this example, the price information dissemination unit  151  distributes real-time prices to the consumers. Other price information may be used. This can be done either directly or via the distributor. In a system where the distributor is responsible for sending price information to the consumers, the distributor can add information to the message relevant for how the distribution cost is settled. The transport mechanism can be based on different standard components such as different types of wireless communication, power line communication, telephone lines, wide area data networks and so on. 
     On the consumer side, the information will be received in standard equipment and used to control different electricity equipment such as water heaters, cooling equipment, motors, lights, and so on. Equipment for controlling different electricity is, for example, described in the UK patent application No GB 2309567 and in the U.S. Pat. No. 4,771,185. Real time prices (as well as spot prices) can also be displayed on a readable screen. 
     In  FIG. 3 , the infrastructure used for disseminating real time price information is shown. The core component in the real time price dissemination system is the unit  151 . The unit  151 , which can be co-located with the Exchange  119  or at any suitable location, preferably receives information both from the Exchange  119  and from the Balance market  123 . The unit  151  receives price information from the different markets and compiles the price information into a message having a suitable format. The message is then transmitted to various receivers, for example, the consumers and/or the distributors. The following example parameters can preferably be included in a message transmitted by the unit  151 : 
     
       
         
               
               
             
           
               
                   
               
             
             
               
                 Information type: 
                 as price information relating to electricity 
               
               
                 ID Information: 
                 different dissemination units can have different 
               
               
                   
                 identities and thus be recognised by the receiver 
               
               
                 Contract type: 
                 as real-time price or spot price 
               
               
                 Valid for (time): 
                 for example in the form yymmdd:hhmm to ;hhmm 
               
               
                 Price: 
                 for example cents/kWh. Also different prices for up 
               
               
                   
                 and down regulation can be included. 
               
               
                   
               
             
          
         
       
     
     The real-time prices can be different for different local areas and therefore the general message preferably also includes information regarding price per geographic area. The message can be packed as an XML-message (Extensible Markup Language) DI message (Electronic Data Interchange) or any other type of an open API (Application Program Interface.) 
     The system can operate in the following way. Consumer  109  is connected to the distributor  113  and has an electricity contract with the supplier  115 . The Consumer  109  further has an electricity meter that meters electricity consumed by the Consumer  109 . Assume that the consumer has an agreement involving two price-hedging contracts with a supplier. A first base contract is for the same power at all hours, for example, a yearly contract for 10 000 kWh, which means an hourly delivery of 10 000 divided by 8760 hours. The price is agreed to 7 cent/kWh, as is depicted in  FIG. 4 . The consumer also has a second, peak contract for a year of 10000 kWh. The peak period covers all working days between hours 6 and 20. The peak contract will be delivered during 70 hours a week and 3668 hours for the year. The price is set to 10 cent/kWh, as depicted in  FIG. 4 . 
     In the settlement process, the consumer will pay the supplier 10000*7 cents and 10000*10 cents equal to $1700 or approximately $4.66/day. The measured difference between the hedging contracts and measured actual consumption will be settled at the real time price. Different markets may employ different rules for what is determined to be the real-time price. The real-time price may be set to the price at the balance market or at the spot market for that particular time. 
       FIG. 4  is an example of the prices for a certain day, and  FIG. 5  is an example of the contracts and the measured use of electricity on that day (the two contracts include approximately 66 kWh and measured volume is 70 kWh for the day). The settlement process includes the cost for the price hedging contracts, which in this example is $4.66/day, and in addition, the real time price multiplied with the difference between measured volume and contracted volume for each hour. Any suitable time period may be used when settling the real time prices (minutes, half-hours, etc.). 
     In this example, the consumer will be charged 19 cents to the real-time market. The cost for real time energy can be both positive and negative depending on when the consumption occurs and how many kWh are used. Thus, when the consumer consumes more power than he has purchased hedge contracts for, he will be charged the real-time price for this additional consumption. On the other hand, if he consumes less power than he has purchased hedge contracts for, the corresponding amount will be deducted from his invoice from the supplier. In some de-regulated markets, the real-time price for decreasing power generation and for increasing power generation differs. There is one price for increasing power production and another for decreasing power production. In a corresponding way, there will be two prices used in the settlement. In other words, consumption above the hedged contracts will be charged at one price, usually higher, and consumption below the hedged price will lead to a deduction at a second price, usually a lower price. In the system described above, it is preferred to use the real-time price set in the balancing market in the settlement, even though it would be possible to use any other price reflecting the real time price, such as the spot market prices, as an alternative. 
     In a system where the balancing market price is used in the settlement, it is nevertheless advantageous to provide the consumer with the spot market price. In other words, the message transmitted from the price information dissemination unit  151  preferably comprises both the prices at which increased power generation and decreased power generation are traded (balanced market prices) as well as the spot market prices set at the exchange. The reason for providing the spot market prices to the consumer is that in an efficient electricity market there will be a very strong correlation between the spot market price and the price at the balancing market. Hence, the spot price provides a good indication on what the real-time price will be in the very near future. The consumer can benefit from this information by planning ahead certain power demanding activities. 
     The system described herein places all electricity consumers in a position where they can control their consumption pattern in response to the current price for production of electricity. The system permits balancing electricity production and electricity consumption at both sides, i.e., at the production side as well as the consumption side. In the past, this was not possible since no incentive for participating in this balancing existed at the consumption side. In addition, because the consumers can actively take part in the market, the electricity market will become more like traditional commodity markets and will more easily attract speculators. This in turn will increase liquidity on the electricity market, which will lead to better prices for people trading hedge contracts. 
     Although various embodiments have been shown and described in detail, the claims are not limited to any particular embodiment or example. None of the above description should be read as implying that any particular element, step, range, or function is essential such that it must be included in the claims scope. The scope of patented subject matter is defined only by the claims. The extent of legal protection is defined by the words recited in the allowed claims and their equivalents. No claim is intended to invoke paragraph 6 of 35 USC §112 unless the words “means for” or “step for” are used.