Collaborative "spark" proves productive for ISU economists and electrical engineers

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Increasing oil prices and concern over greenhouse emissions have prompted new innovations in “green” energy in recent years. Wind turbines, solar panels, and hybrid electric vehicles are more common, giving homeowners, farmers, and businesses the ability to generate and use electric energy in new ways.


As traditional consumers of energy start to shift their behavior from purchasing all of their energy from a large producer to generating some of their own, what are the impacts on the companies that generate, or on the entire system of producers and consumers?


These are the types of questions that ISU Department of Economics Professor Leigh Tesfatsion (above right) has been working on since 2000, when she first started her work in energy economics. Tesfatsion has been exploring the different ways that an electric power system – from the entities that generate power on down to those who use it - is affected when changes to that system are introduced


To better address the issues, Tesfatsion and her collaborator, Professor Dionysios Aliprantis from the Electrical and Computer Engineering Department, have assembled a collaborative group of economists and engineers at Iowa State University called the Integrated Retail/Wholesale Power System Project Group (or IRW Group for short). The IRW group (left) includes both faculty members and graduate students, and in their second year of collaboration they’ve developed a software test bed designed to mirror the world of the electric power market place.


The IRW test bed is essentially a virtual world that includes many of the key players in a power system, from the wholesale power companies that generate electric energy in bulk, the wholesale entities that buy this bulk energy and resell it downstream to retail customers, on down to the ultimate retail consumers. IRW group members can introduce a new variable or condition to the system, and then step back to see how it all takes hold.


Foreseeing potential problems


"It's a little like a Petri dish," says Tesfatsion of the IRW test bed.


"We’ve essentially built a virtual power system where we can introduce agents with their own goals and activities, then let the system run and watch what happens," she says. "We make observations but we never interfere. We run the system many times with different initial conditions to view the scope of possible outcomes."


Some of those initial conditions might include a policy change or a change in energy contracts, where consumers are charged a variable rate for electricity consumption rather than the traditional flat rate. Or it could be a physical change, such as the introduction of a new technology that shifts the energy load within the entire system.


Examining scenarios like these becomes important as new technologies, and new policies and approaches to the production and consumption of energy, start to penetrate power system operations. Chengrui Cai, a graduate student in electrical and computer engineering, provides some perspective. "We have new physical technologies like solar power showing up in residential areas, so what are the implications for improving the performance of the electrical distribution grid? Plug-in electric cars are also growing in popularity, but if you fully release them with no regulation they might place a lot of stress on the system and potentially overload it. Through the test bed we can foresee potential problems with these new technologies, which will then help us to use them more effectively," he says.


Open information and collaboration


The IRW test bed will be released as open source, meaning that it will be open and available for anyone to look at or use. "We’re one of the few power system research groups using an open source approach," says Tesfatsion. "But this is academics and we want people to be able to replicate and extend it for their own purposes, so there's nothing hidden."


She points to some of the positive impacts globally that have already come from the earlier development and open source release of the wholesale portion of the IRW test bed, referred to as the Agent-based Modeling of Electricity Systems (AMES). A group in Australia is using AMES to craft carbon emission policy, a group in Germany is using it to study emissions trading, and other applications of the test bed are underway by research groups in France and Slovenia.


It's not only the open nature of the IRW test bed that has been valuable, but also the open collaboration of the group that has made their work so strong to date. The IRW group has met weekly for the past year, moving into their second year of work. They use their meeting time to present new ideas or related project work to each other, or to discuss ways they can improve the test bed, ultimately working toward a full release in 2012.



"Previously our work was very isolated,” says Cai. “By working together we can see the problems from different perspectives: how markets might be designed to deliver energy more economically, or with more reliability from an engineer's point of view."


Coming from different disciplines, it also took some stretching to see each other's perspective, which ultimately proved quite valuable. "The economic point of view is completely different from the way we engineers were thinking about things," says Pedram Jahangiri, a graduate student in electrical and computer engineering. “I realized that you can’t control a complex system like this only in terms of something physical, but we also needed to think about the behaviors of people."


Huan Zhao, a graduate student in economics who has also taken courses in electrical engineering says, “Economists ignore too many details of an industry to make a simple and solvable model. Engineers focus too much on the details and tend to ignore the potential benefit and problem of the market. Our research group pays equal attention to both economic and engineering concerns of the industry, which makes it meaningful and applicable."


That breadth of knowledge and perspective, says Tesfatsion, has made the graduate students involved in the IRW group “very compelling” to employers. "Our students have knowledge of power systems on the tech side and they also understand the economics of power systems. This combination has made them very competitive and valuable in the job market," she says.


For Tesfatsion, this chance to work on "critical, real-world issues that ultimately impact national welfare and security” has been one of the most exciting and challenging opportunities she has undertaken in her academic career. "Every aspect of economics is in there," she says.



The work of the IRW group is supported in part by funding from the ISU Electric Power Research Center, the Pacific Northwest National Laboratory, Sandia National Laboratories, and the National Science Foundation.


Learn more at: http://www2.econ.iastate.edu/tesfatsi/AMESMarketHome.htm;   http://www.econ.iastate.edu/tesfatsi/IRWProjectHome.htm


Members of the IRW group in photo above:



  • Back Row From Left To Right: Deung-Yong Heo, Econ RA; Andrew Nguyen, Econ RA; Prof. Leigh Tesfatsion, Econ/ECpE PI; Prof. Dionysios Aliprantis, ECpE PI; Wanning Li, ECpE RA; Di Wu, ECpE RA; Chengrui Cai, ECpE RA

  • Front Row Seated From Left to Right: Dong-Jin Pyo, Econ RA; Pedram Jahangiri, ECpE RA; Auswin George Thomas, ECpE RA; Huan Zhao, Econ RA