Architectural Principals of Transactive Energy

This post is part of the continuing Paths to Transactive Energy series. You can find them all listed by clicking on the matching metatag at the bottom of each post.

Transactive energy describes a pattern of integration where parties exchange the value or a commodity resource [power] over time and make forward commitments to sell or purchase that commodity. The Common Transactive Services (CTS) can be used in central auction-type systems, where a single entity announces or broadcasts prices or in markets were two or more parties come to a mutual agreement on price and delivery.

All forward transactions are committed, that is one party commits to delivering the service or commodity, one commits to buying it. If a provider wishes not to deliver, or if a purchaser wishes not to take delivery, they can participate in a separate negotiation, with a separate price, that can be netted against the original committed transaction. Such a buy-back resembles today’s Demand Response.

If one purchaser wishes to acquire more power at the last minute, and one wishes to acquire less, they can negotiate an exchange on the spot market. Different market structures and market rules will change the format, but not the substance of this transaction.

The CTS are essentially identical for any commodity resource or service. CTS works for transmission rights and ancillary services, as well as for other resource markets such as transactive water or transactive thermal markets. In each case, the product is delivery of the commodity at the designated time at the designated rate.

The CTS can work in many market structures. CTS can be used with a single (for the microgrid / micromarket) brokered trading floor or with peer-to-peer transactions. Compound transactions can link multiple simple transactions, such as paired transmission and delivery. Different circumstances will work best with different market structures, but in all cases, the communications can use the CTS.

1. Each party represents a node that acts in its own interests to support its own purposes.
2. The internal mechanisms and systems of a node are not communicated as part of the CTS.
3. The system of systems that make up a node may choose to organize some or part of their internal operations using transactive energy / transactive agents.
4. Actors inside a node interact with the internal market, not the external; there is no direct market interaction with things / markets / prices external to the node.
5. The purpose of an transactive node is to support the purposes of its owners and occupants, and not to support the things outside the node.
6. Economic signals or availability from outside the node might influence the market, if any, inside the node, but only as the market interface on the node relays that information. This may include markups, smoothing, discounts or any other means or mechanism that the owner of the node chooses to use (or that the maker of the system that operates the node chooses to use so that the owner of the node box will choose that system).
7. Parties external to the node should not use the possible existence of an economic entity inside the box as an excuse to penetrate the veil of the black box.

The Human Side of Energy Micromarkets

This post is part of the continuing Paths to Transactive Energy series. You can find them all listed by clicking on the matching metatag at the bottom of each post.

The Human Beings must have a say, or any model for transactive energy is doomed to failure. No model based on satisfying The Computers or The Grid will acheive prominence in the market. If optional, people will opt out. If mandatory, people will work around. The market is not a model for decision making, it is a pattern for interactions. In the abstract, semiotics does not determine meaning, only how meaning is conveyed. The interaction patterns do not determine the value of energy used at a particular place and time, they only determine how it is negotiated and conveyed.

Decision making must be local, driven by internal needs. Those decisions take place in the context of a larger market, but the larger market is not determinative of particular actions. People, whether at home or at work, will participate to the extent that it enhances their own satisfaction in some way, and transactive energy is, and must be, thoroughly agnostic about which layer of the Maslovian cake is driving decisions.

The occupants of the house, or of the business facility, determine the values of those systems that they use and how they negotiate. No one outside the house can know whether that spare refrigerator is deep storage or beer refrigerator, and if this weekend’s party makes the beer refrigerator and the ice-maker priority uses. (Note that I am not discussing the human interface that might make it useful or desirable to interact with the priorities of these systems—because these interfaces are outside the scope of transactive energy).

One system keeps things cool, within a range determined by biological safety or by personal preference, with limited flexibility over time of operation. One manages ice production, a pre-consumer that wants to acquire when power is cheap. Those two agents may have the same locus of interaction, let’s call it an IP address. They may be expressions of a single control system, of no open standard. They may not choose to share any temperature information with the EMS/BMS. The EMS/BMS does not care what protocols are used inside the refrigerator. In a similar way, a BACnet network with 5 AHUs may choose to represent itself as any number of agents (likely 1-5, but ventilation may come to market as a separate service than cooling) but not as a collection of BACnet points.

Transactive integration is the way to solve the problem of diversity of systems in the home. Developers of small microgrids aim to waste no energy, but struggle to develop drivers for every system. Energy device drivers for every CPAP? Every stereo system and television? Plate warming drawers? Expresso machines? In my home, the biggest energy user might be my well. The diversity of home systems is daunting. Each of them is valued for the service it provides, but each can have an economic profile, a meta-model, a prototypical pattern for its energy use.

This simplicity and abstraction is a benefit for the maker of the system or device as well as of the EMS/BMS. The owner can look at a device profile in a store or on-line and can say “yes, that is the way this device uses/stores/generates energy”. We can imagine heuristics, such as “you need some more pre-consumption devices to smooth your load.” The economic actor profiles become a way to discuss the systems as well as how they will interact when sharing resources.

Introducing DERA

This post is part of the continuing Paths to Transactive Energy series. You can find them all listed by clicking on the matching metatag at the bottom of each post.

Demand response (DR) is the capability of systems that consume or supply power to respond to messages from the power grid. While DR can include using more or less power, or supplying more or less power, for most practical purposes it refers to nodes on the grid reducing the power they are using when they receive a request from a grid operator who anticipates a looming shortage of electrical power.

Many DR programs originally relied on phone calls and other manual processes. Automated Demand Response (ADR) has long been a request of the utilities. A decade ago, the California Energy Commission (CEC) and others funded a project to develop OpenADR 1.0. This work was contributed to the OASIS Energy Interoperation Technical Committee for incorporation into the Energy Interoperation specification. Energy Interoperation specification also defined the common transactive services for transactive energy. The OpenADR Alliance is a trade association that developed OpenADR 2.0 based on the OASIS specification, as well as maintaining interoperability and conformance requirements to insure interoperability of systems that use OpenADR.

The common transactive services (CTS) were designed to offer sufficient communication to operate the North American bulk power markets. Because CTS concerns effects on the market (services) rather than the mechanisms of operation, systems built around CTS can incorporate any technology. Components of CTS-based systems can evolve rapidly, can have their own security, and can support their own internal purposes. At the May 2016 Transactive Energy Conference, representatives of the open-source European initiative PowerMatcher acknowledged that their published services are fundamentally compatible with CTS.

In the fall of 2016, FERC proposed a ruling granting Distributed Energy Resource Aggregates full and unprejudiced access to wholesale power markets. The Federal Energy Regulatory Commission (FERC) is the US agency charged with the safety and reliability of the grid, encouraging energy markets between the states free of manipulation, promoting safe, reliable, secure, and efficient infrastructure. Distributed Energy Resources (DER) names decentralized systems that supply or store energy, as compared to centrally owned and operated generators. Practically, DER refers to systems attached to the distribution network, that is, the power grid that works within neighborhoods.  Many DERs are too small to draw much attention, although their cumulative effect is large and growing. DER Aggregates (DERA) refer to groups of DER the can be marshalled by a common entity. This proposed FERC ruling directs the utilities commission of each state to develop rules that permit DERAs to buy and sell power.

CTS is sufficient for DERAs to communicate with grid operators and with each other to operate a power grid. Energy Interoperation specifies communications sufficient to operate DR and CTS. Power interactions are abstracted to nine (9) services with a half dozen methods apiece. These services can be used to operate resource markets, where resources are commodities whose value is determined by time of delivery. Electric Power, the grid Ancillary Services, as well as the carrying capacity of the distribution network are each resources under this definition.

Paths to Transactive Energy

Transactive energy uses markets to schedule the delivery of services over time. Each service is supplied by a node on a grid (or microgrid). Distributed energy resources and distributed energy resource aggregates can be such nodes. So can an entity that solely consumes power; consuming power at the right time is a market service just as power supply.

This post begins a series of ruminations based on conversations last spring that started in the OpenADR Alliance, and continued off-line with David Holmberg (NIST), Michel Kohanim (Universal Devices), and Gale Horst (EPRI). As usual, while people offer me wisdom, my mistakes are my own.

With the national Transactive Energy Conference coming up next week Portland, I am putting a series of posts together on the subject

Transactive Energy integration is based on Services

Transactive energy uses markets to schedule the delivery of services over time. Each service is supplied by a node on a grid (or microgrid). Distributed energy resources and distributed energy resource aggregates can be such nodes. So can an entity that solely consumes power; consuming power at the right time is a market service just as power supply.

1. All conversations with nodes on the grid should be conversations with black boxes. How those nodes choose to organize themselves internally is no affair of the larger entity. It’s a black box.
2. The purpose of each node / black box is to support the purposes of its owners / occupants / inhabitants, and not to support the things outside the black box.
3. Substantially all interactions with the black box can be transactive resource negotiations, i.e., transactive energy.
4. A node is its own operating environment. It may make sense for some nodes to organize some or part of their internal operations using transactive energy / transactive agents. A node box may choose to use an internal market to manage some or all of its energy use / generation / storage (/ pre-consumption (temporal shifting) / conversion / recycling)
5. If a “device” inside a node box operates through market interactions, those interactions are with the internal market, not the external one. There is no direct market interaction with things / markets / prices external to the black box. (see point 1)
6. Economic signals or availability from outside the node might influence the market, if any, inside the black box, but only as the market interface on the box relays that information. This may include markups / smoothing / discounts or any other means or mechanism that the owner of the black box chooses to use (or that the maker of the black box chooses to use so that the owner of the node will choose that black box).

And most important

7. Entities outside the black box should not use the possible existence of an economic entity inside the box as an excuse to penetrate the veil of the black box