What is Transactive Energy and Why is it Important?
Transactive Energy, or TE, refers to the economic and control techniques used to manage the flow or exchange of energy within an existing electric power system in regards to economic and market based standard values of energy.
It is a concept that is used in an effort to improve the efficiency and reliability of the power system, pointing towards a more intelligent and interactive future for the energy industry.
Transactive energy promotes a network environment for distributed energy nodes as opposed to the traditional hierarchical grid structure. The network structure allows for communication such that all levels of energy generation and consumption are able to directly interact with one another, a concept that is also known as interoperability. In transactive energy, interoperability refers to the ability of involved systems to connect and exchange energy information while maintaining workflow and utility constraints.
The network is exponentially more complex than traditional control of generating sources because the demand side of the grid offers millions control points in contrast with an average 10 to 20 power plant points of control on the supply side.
So how does Blockchain fit into TE? Blockchain has emerged as a potential means of orchestrating the clearing of TE transactions in a fair and impartial way. Typically, Blockchain enables transparent transaction management between two parties, however, in TE, there is the potential that 3 or more parties might be engaged in a single transaction. This is something the Blockchain community is investigating.
As mentioned, interoperability is a key aspect of TE. Interoperability has many connotations to it. Most broadly, interoperability allows for two or more parties to share information in a common way, in a common environment, across a common infrastructure, with information that is transportable between the entities, where the information is interpreted consistently, and where the entities do not interfere, conflict, or preempt each other.
Looking for more information? Here are some resources that you might find informative:
GWAC Transactive Energy Website– The Gridwise Architecture Council (GWAC) is a US DOE funded think tank of 13 elected industry subject matter experts. GWAC has investigated and evaluated many aspects of TE and this website offers many resources.
Transactive Energy Framework– A document created and published by the Gridwise Architecture Council outlining a framework for TE system implementation models.
The NIST TE Challenge– A US DOE funded activity to explore the concepts and practical implementation of TE systems
Decision Maker’s Transactive Energy Checklist– a guide for decision makers including regulators, utilities, policy makers, and integrators.
Gridwise Interoperability Constitution– a guide for understanding the core principles of interoperable systems for TE.
Grid Modernization Laboratory Consortium– a US DOE funded activity to harmonize and share information across a wide range of grid reliability, resiliency, and interoperably research activities.