A framework for transactive energy


Transactive energy – or the management of energy generation and use through the use of power price signals and grid conditions – is a new area of activity that has emerged with the recent dramatic growth in the use of demand response and other flexible mechanisms for power market efficiency and electric grid reliability, coupled with the need to substantially scale up the use of intermittent renewable energy.

The topic has been very much developed by the GridWise Architecture Council (GWAC), which yesterday released the first (draft) framework for transactive energy. The aim is to present a common ground, including a clear definition, for interested parties to discuss and advance transactive energy.

“Transformations in our industry, including growth of both renewable and distributed energy resources and the use of intermittent resources, are making it increasingly difficult to continue to use the load-following operational model,” explained Mark Knight, GWAC chair and one of the co-authors of the document. “Recognizing this, the document provides the industry with both tools and a common language for describing transactive energy systems and comparing the features, functions and elements of different transactive energy approaches.”

Based on what the GWAC calls its “Stack,” or layers of interoperability in the grid, the document identifies four elements that need to be addressed in a transactive energy design:
Policy and market designs
Business models and pricing schemes
Conceptual architecture
Cyber-physical infrastructure.

Ideally, policy makers would have a transactive energy toolkit available to them that would include a catalog of policy guidance and mechanisms. The regulators could use this toolkit to compose transactive energy policy specific to the needs of their regulated jurisdictions. Until that time, transactive designs must address the broader and potentially more abstract set of considerations about who or what the transacting parties are. And what is the purpose and regulatory extent of transactions? How are transactions closed or settled? Is the economic “reward” directly associated with the transactions or separate?

Information interoperability (including system architecture) needs to address the semantics behind the valuation of transactions (meeting participant objectives), the operation of the transactive energy mechanisms, and the control aspects of understanding the impacts of the transactive system on the electric grid. One challenge is how to include in the “business model” the engineering imperatives? What specific information is exchanged?

In the cyber-physical infrastructure element, transactive energy designs need to address both the electrically connected network and the communications networks necessary to monitor and control it, to the extent of understanding what physical connectivity is required to support the exchange of information in support of transactions and without detrimentally impacting the reliability of the electrical network.

The document was developed following workshops held during the GWAC’s transactive energy conference in May, and is required reading for all who want to understand and advance this exciting new field.

Access the document HERE

For an introduction to transactive energy, see “Transactive energy” by Paul De Martini in Smart Energy International Issue 3 2013, p 72.

By Jonathan Spencer Jones