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

Eight Agents for Energy

The Energy Mashup Lab (The Lab) is developing open source software for agents that will enable systems that use, produce, or store energy to self-assemble into microgrids. These microgrids can be standalone or grid-attached. If grid-attached, they present a single market or OpenADR interface to the grid, and that interface reveals only the net market position of the microgrid.

The microgrid is operated by a micromarket, trading in availability over time. The Lab uses open standards to transact between agents. Each system or group of systems being represented by an autonomous merchant agent that buys or sells Power for those systems. The software for this agent is Open Source and can be freely downloaded for use in products.

While there is a simplicity in a single Agent, we think there are benefits to creating more than one type of agent. While a single agent running a single set of code could encompass all behaviors could be created, agents that are optimized for specific types of market behavior can be smaller and more secure. Naming similar market behaviors across systems makes it easier for the integrator to understand how introducing an additional system will affect an existing micromarket/microgrid. We name these the Agent Personalities.

The descriptions below refer to electric power for clarity and brevity. The agent behaviors apply to any resource micromarket.

The Simple Agent Personalities

Each Agent Personality denotes a common set of market behaviors.

Homeostasis Agent

A homeostasis agent represents a system that consumes power episodically to support it’s a purpose external to the resource market. A homeostatic agent schedules power purchases to support providing a service external to the grid.

Two examples of systems that would use a Homeostatic Agent are an air conditioning system and a refrigerator. Each of them buys power to support processes that support a service external to the grid. Neither wants to run unless it is able to buy the entire power curve it needs for its next cycle. Each could advance or delay its purchases to some, or even skip a cycle, without harming the service it provides.

Preconsumption Agent

A pre-consumption agent is similar to the homeostatic agent, but it provides an asynchronous server and therefore has a bias to buying only when the price is low. The system is able to increase consumption in the short term to enhance its ability to provide service at a future time. If the refrigerator is a homeostatic agent, the ice-maker may be a pre-consumption agent. There may be overrides to the behavior, i.e., fill up before the party, or high priority when less than a quarter full.

Base Consumer

Base Consumer uses power continuously when the system it represents is providing a service. An example is a light which is either lit and consuming power, or is unlit and not consuming power. An agent representing one or many lightbulbs on a circuit changes in scale only. A base consumer is almost always a high-priority purchaser in the market.

Tiered Consumer

A Tiered Consumer differs from a Base Consumer in that it may be able to reduce power consumption by providing a lower level of services. An example is a dimmable light. More power might provide a better service, or a different service. Using for example the dimmable light again, a low level of light might support movement, a high level of light support reading, and a higher level of light support personal grooming.

Base Supplier

A Base Supplier supplies power continuously. A Base Supplier might include any controllable generator with a long cycle time. Long cycle time is situationally defined.

Market-Driven Supplier

A Market Driven Supplier supplies power intermittently, based on interactions within the microgrid.

Intermittent Supplier

An Intermittent Market Supplier supplies power intermittently, based upon inputs external to the microgrid. An example is a photovoltaic system, which generates power when the sun shines.

Storage Agent

A Storage Agent is able to consume resources later supply the same resource. It stores power. This is similar to a system able to pre-consume, but it is able to bring some portion of its pre-consumption back to the market at a later time.

The Platform Agents

Any of the Agents Personalities named above can in principal interact with any other agent through bilateral transactions. Some markets might be set up with all tenders going to a single entity who manages all transactions.

Broker

The Broker acts as an agent by executing public orders. It may operate a double auction. The Broker does not itself have a position in any trade. (Transactions to power the broker are an exception). In the home, a home router may act as a broker.

Market Maker

A Market Maker acts as a Broker by executing public orders left. It Market Maker further maintains an orderly resource market with a responsibility to buy for its own account in the absence of public buy orders, and sell from its own account in the absence of public sell orders. The market Maker personality may be associated with Storage or with external market sales and purchases. External market sales and purchases are not part of the internal maker that operates the microgrid.

How to use the Agents

Each of the simple agent personalities could characterize a single node or a collection of nodes. Microgrids can be characterized just as nodes are characterized. This point is fundamental to considering interactions within aggregations of microgrids, as to considering the dis-aggregation if a node into smaller component systems.

A system or device developer will be able to select the personality that he desires to represent his technology, and download it.

A set of agents sufficient to support systems with each of these characteristics is able to support all systems potentially within a microgrid. Such a set does not rule out potential hybrid systems, in which two or more of these characteristics coexist within a single system—such a system is a natural outcome of a microgrid at one level being a node at a higher level.

Small Transactions and Smart Energy

The problem of smart energy is distributed intermittent generation laid across unmanageable power use and a fixed distribution grid. Central operators will never be able to keep pace with controlling new technologies that generate, store, and use power. Privacy demands that central operators not track and predict every activity in our homes and buildings. In economic terms, this is a knowledge problem

Markets are a proven means to balance supply and demand without central control. In 1992, Huberman & Clearwater demonstrated that a market in data center cooling better optimized allocation and reduced energy use than the best control strategies. The technique they used in data center at XEROX PARC was to add an agent to each server and have each agent bid for cooling.

The best place to manage the changing technology mix for power and changing demands on systems is locally, in a microgrid. Within a microgrid, each system can bid to buy or sell power over time, aligning demand with supply, smoothing load, and managing storage—each microgrid can be operated by a micromarket. Each system and application can be represented by a market agent. Each market agent represents the needs of its system and the preferences of tis owner. Smart energy is an emergent behavior of the IoT market.

Every microgrid can participate as a node in a containing grid. Each microgrid shares only its aggregate market position with the containing grid. Microgrids gain resilience through buying and selling power to and from their peers. This model is fractal, as the term microgrid can refer to the city, the neighborhood, the street, the building, or even to systems within a building.

Microgrid markets are markets based on time of delivery. Power is a resource whose value is determined by time of delivery. The information models for resource markets are already defined in OASIS. WS-Calendar defines a semantic model for M2M schedule negotiation services. EMIX (Energy Market Information Exchange) defines semantics for describing time-based products. (Energy Interoperation) defines eight services, each with just a few methods—the building blocks to construct markets in transactive energy.

Building markets is not enough without a means to create identities, to register contracts, and to settle transactions. The largest power markets, dealing with long-running purchases of centrally managed power, use traditional banking. Several projects are using expensive centrally authorized blockchain methods to operate microgrid-to-microgrid exchanges (see Brooklyn Microgrid Project, or the company Grid Singularity)

But to actually operate a microgrid, to balance power in real time, requires thousands of small transactions. To operate off-grid, or after grid failure, requires cryptocurrency that does not rely on permission from a server in the cloud. It must be local, and permissionless, and free. At the edges, transactive energy requires technology like the tangle-based IoTa. Individual transactions will be for a half cent or less. Systems must be able to establish identity and record contracts.

The Energy Mashup Lab is an open source project to create the software infrastructure for smart energy. The first step is to complete definition of the Common Transactive Services of smart energy. We are updating reference implementations of software to wrap a physical system and abstract its operation into power services. System developers will then be able to choose from the transactive agent personalities to match how their system acquires or disposes of power. All software will be available for download under an Apache 2.0 License.

Working, interoperable sets of code will be periodically donated to the various IoT framework consortia. For example, the AllSeen Alliance will want to modify code to support its own message formats and security profiles. Specific implementations will include ledger integration, i.e., IoTa or other cryptocurrency. Eventually, working profiles will move to microcode, and from microcode to ASICs. A system or application that supports a given framework and ledger will be able to discover the local micromarket, and self-integrate into the local microgrid.

Just-In-Time Infrastructure and Watergy

The future of infrastructure is just-in time. Just-in-time delivery of structures, ready to support people and business, customizable to the site, long lasting, ready for smart energy and water. Just in time delivery of distributed energy, ready to support structures, the people who live and work in them, and the services they need, and ready for smart grids. Just in time delivery of pure water, ready to support people and agriculture, able to work alongside smart power and smart grids.

Consider a simple building with only a refrigerator, air conditioning, a solar panel (PV) and a power storage system (battery). Each is represented by an autonomous market agent.

The refrigerator and the air conditioner are similar: each runs episodically to support some private purpose, prefers to run an entire cycle or not at all, can shift any cycle forward or back in time while still providing its service. To coexist within the power supplied by the PV, they must not run at the same time lest they exceed the power available. Each determines when it cycles by submitting time-based tenders, finding the minimum price, i.e., buying power when the other is not.

The PV is represented by an agent acting as a seller, able to make commitments based on its internal predictions of weather. When it is unable to meet commitments, say when a cloud passes over, it must go to the more expensive aftermarket, and buy power from the battery.

The battery is represented by a merchant actor, buying power low and selling high. In another model, it could operate as the “market specialist”, brokering market transactions and improving market liquidity through trading on its own account.

As we add more systems to the building, each represented in the internal power market by an agent, we do not need to add complexity to the control systems; we merely add participants to the market. The knowledge problem of specific system operations and controls is simplified through abstraction to the common transactions. If the building is able to connect to a grid of some kind, it does not expose its inner workings; the building exposes only the aggregate market position of the interior market.

In this model buildings may trade with each other using the same market services and interactions unused to manage the internal supply and demand. A community energy resource such as an independent wind generator or larger power storage system acts as a peer node within the neighborhood. A non-building entity such as a wastewater pumping station may participate in the local building-to-building (B2B) market.

In a similar way, the local B2B market can participate in a larger neighborhood market. Where transactions between particular market participants are limited by transmission capabilities, a parallel transport or congestion market can be introduced.

Inside any building, any system can potentially operate an internal market. For example, a multi-story building may choose to have its multiple air conditioning (HVAC) zones operating as their own market, with only the aggregate HVAC market participating in the building market. The underpinning for in-building markets in power are described in detail in the recently published ANSI/ASHRAE/NEMA Standard 201-2016, the Facility Smart Grid Information Model.

This pattern of integration is sometimes referred to as fractal microgrids. With transactive integration, the market negotiations and transactions are identical at each level, and the underlying complexity of each market participant is hidden. Inside a building with a single owner, the complexity of block-chain as a transaction monitor may be unnecessary. At the largest scale, in the bulk power markets, transactions may require traditional financial instruments. In-between, where the transactions many and small, where resources are flowing between systems with different owners, and where local settlement may be desired to achieve resilience goals, blockchain is of most use. Within any microgrid, systems may use blockchain to create and manage identity, to record contracts, and to settle transactions.

Blockchain is in essence a means to create a distributed database, with information shared between participants, so no one participant can change the information. Blockchain is in growing use from early power trading in the Brooklyn Microgrids project, to world-wide logistics management. Some codebases such as Open Ledger, look to bankable blockchain, wherein the net of transactions can easily flow into the world banking system. Others, such as IOTA, aim at lightweight models that are cost-effective for transactions a tenth of a cent and smaller, and that can run on very small chipsets.

New initiatives are extending the principles of transactive energy to water distribution. These models make sense today where there are tight restrictions on aquifer pumping shared between farms. Since water must be pumped, and pumped water can generate electricity, markets in transactive power and transactive water can work together. This scenario is particularly interesting in communities that are off the water grid and may be using energy intensive technologies such as Atmospheric Water Generation (AWG) to provide water for homes and hydroponics.

Transactive power and transactive water work together to create what soem of us are starting to call watergy.