Transactive Getty Igor Borisenko 5f287dbc2ecad

Transactive Energy Systems for Reliability

Aug. 3, 2020
The growth of distributed energy resources - particularly behind the meter and out of the control and visibility of the utility - poses challenges

It can be hard work developing material with volunteer groups but the SEPA Transactive Energy (TE) working group is developing some interesting products. It is only possible due to the time and dedication of our members who take time out of their busy schedules to help us to push the boundaries of TE thought leadership even further.

You have probably heard the term transactive energy and may even have heard more than one explanation of what it is. TE refers to the use of a combination of economic and control techniques to improve grid reliability and efficiency by integrating supply and demand at a local level. The objective is to establish environments that enable transacting parties to understand rules of engagement and compensation in addition to performance requirements.

The safe and reliable delivery of electricity depends on the ability to monitor and control the grid, and balance customer demand with energy delivery. However, the growth of distributed energy resources (DERs) - particularly behind the meter and out of the control and visibility of the utility - poses challenges, such as output fluctuations, increased voltage and reactive power variations, potential phase imbalances, and reverse power flows. These challenges complicate the planning, operation, and oversight of the grid.

Over the next couple of decades the industry will see a continuing fundamental shift from a load following paradigm, where central generation adjusted to varying demand, to a supply following paradigm, where responsive demand absorbs variable generation such as solar and wind. When trying to imagine how this will play out there are a couple of good lessons from change management that are good to keep in mind.

One is how to manage transitions from one paradigm to another. There is a transition period where you need to support both old and new ways of doing things while also trying to affect a cultural adoption of the change. In the case of TE I would argue that the tipping point where this happens may well sneak up on us and the change will happen rapidly. This means that waiting until we need TE is far too late to start looking at how to incorporate TE systems with other traditional systems and what steps need to be taken in terms of policy making before this happens. 

The second lesson from change management is that value comes from what gets used, not from what gets designed or built. That means it needs to be accepted and fulfill a need. As policy makers face the fundamental differences between present and future systems, they will likely see a need to design policies that maximize customer engagement and accommodate the many DERs that will enter the system, with an eye toward policies and market designs that support TE.

Work performed by Paul De Martini and Lorenzo Kristov for Lawrence Berkeley National Laboratory in 2015 has been referenced by GWAC and many others and it shows a three-stage evolutionary framework for the distribution system, based on the assumption that it will evolve in response to both top-down (public policy) and bottom-up (customer choice) drivers. Thus, each stage represents the effects of both a set of public policies and increasing customer adoption of DERs. Each level includes additional functionalities to support the greater amounts of DER adoption and the level of system integration desired. Each level expands on the capabilities developed in the earlier stage. The result is an increasingly complex system.

We can’t be sure how that system will evolve but we know the starting point, we can envision the end point, and we have a likely path for that evolution.  We need to be able to support the changes in the grid as it evolves. It is this preparation that we are working to support in SEPA’s TE working group.

The SEPA TEWG is working on the development of a conceptual model for transactive energy systems. While all discussion of TE helps to educate people on the topic, discussions often get involved in how the systems work. Implementation differences can get complicated so SEPA’s model will focus on what is the same about TES rather than what is different. This will benefit architects and designers of TE systems as well as policy makers (utility executives, investors, regulators) who want to be able to understand what the essential components are and how they work together. This will be valuable to anybody who wants to be able to compare two different TE pilots, implementations, or proposals will have a template in the form of the TECM that facilitates this. Once the conceptual model is complete the group plans to leverage it to create a guide for how to plan a transactive energy pilot.

We are also planning to create a follow up report to the SEPA TE Primer. The new report will take a look at transactive energy through more of a legislative lens by taking the six principles of transactive energy systems described in GWAC’s TE framework and translating them into regulatory context with legal terms. This will require institutional evolution and that does not happen quickly which is why now is the right time to be creating this report.

About the Author

Mark Knight

Mark Knight is a principal consultant for the energy and utility industries at 1898 & Co., part of Burns & McDonnell. With more than 30 years of experience working for utility companies in the U.K. and the U.S. and as a consultant in the electric supply industry, he is focused on building comprehensive strategies that will improve business and technology solutions for clients. Mark is chairman emeritus of the GridWise Architecture Council and a member of the Institute of Asset Management (IAM). He has participated in several IAM teams to develop asset management guidelines.

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