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Sustainable Business and Regulatory Models for Electricity:
Transactive Energy
Edward G. Cazalet, Ph.D.CEO, TeMix Inc.ed@temix.com
April 9, 2015
Public Utilities Fortnightly Conference:Utilities - the Uncertain Future
National Press Club
Increasing Disruption and ComplexityGHG & CA 50%
RenewablesSolar
Overgeneration and Duck Curve
Storage Mandates and
Operation
ISO/RTO Complexity
Net Energy Metering (NEM)
and Cost Recovery
Many Complex and Ineffective Retail
Tariffs: Tiers, TOU, RTP, Fixed Charges,
Demand Charges, Minimum Bills
Microgrids
Expanded Direct Access
Demand Response 2.0& FERC 745
Future Business & Regulatory
Models
Stranded Costs and Regulatory
CompactSubsidies
(incl. low income)
DSOs and VPPs
Capacity & Flex Capacity
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
Transactive Energy Platforms: host robust cost-of-service, competitive,
and hybrid business and regulatory models.
Transactive Retail Tariffs: forward subscriptions for revenue and bill stability and spot transactions to efficiently
balance variable supply and demand.
Two Foundations for Sustainable Business and Regulatory Models
3
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
Transactive Energy (TE) Platforms
TEPlatforms
Energy ServicesParties
Intermediaries- Exchanges- Marketers- Retailers- System
Operators- Automated
Market MakersTransport Services Parties
ServiceInterface
- Consumers- Producers- Prosumers- Storage Owners
Tenders and Transactions
- Transmission Operators (TO)
- Distribution Operators (DO)
Regulators
4
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
Transactive Retail Tariffs• Based on my typical usage/production, I automatically
transact on a TE Platform with one or more suppliers for a subcription for a prescribed quantity of energy and transport in each hour of the year(s) for a prescribedmonthly payment .
• If I use less than I subscribed for in each hour then I am paid for the difference at an hourly or 5 minutespot price.
• If I use more than I subscribed for then I pay for the difference at an hourly or 5 minute spot price.
• At any time I can automatically buy or sell to modify my position at current tendered prices on a TE Platform.
Ref: A Model InteroperableTransactive Retail Tariff - Smart Grid Interoperabltiy Panel (SGIP)http://www.sgip.org/Publication-Retail-Tariff
5
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
Parties automatically manage facilities and devices in response to Transactive Retail Tariffs from TE Platforms.
Service Interface 0321
Grid
HVACSystem
WaterHeater
Battery
SmartAppliances
IntervalMeter
TE Platforms
EMS
Forward & Spot Tenders &
Transactions
Generator
6
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
The four big ideas of Transactive Energy (TE):
Forward transactions are used to coordinate investments and manage risk.
There are two products: energy and transport..
Spot transactions are used to coordinate operating decisions.
All parties actautonomously.
7
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
A two-way Transport product delivers the Energy product.
Electric energy (at a place and time)
Example: Transmission Connected Substation
Transport
Example: Two-way Feeder
Electric energy(at a different
place and same time)
Example: Building
Transactive Tariff: Recover more cost-of-service whentransport is heavily loaded in either direction
8
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
Energy Service Parties automatically control devices/systems, make investments, and manage tenders and transactions.
Management Algorithms(EMS)
Device State
Devices and Systems
Control Signals &
InvestmentsWeather forecasts
Objectives
TE Platforms
Benefit
Tenders
Service Interface
Energy in/out
TransactionsTransactive
Energy Tariff
9
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
Distribution Operators control grid systems, make investments and post forward and spot transport tenders.No energy role.
Planning & Operations
Available Capacity
Substation and Feeders
Control Signals&
Investments
TE Platforms
Service Interface
Feeder Net Energy Flow @ Substation
TransportTendersTransport
Transactions
Net SoldΣ Surplus-
Transactive Transport Tariff
10
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
TE Platforms can be local or wide area.
TEPlatforms
Energy ServicesParties
Intermediaries
Transport Services Parties
Neighborhood
Substation
City/Town
Region
Balancing Area
NERC Area
National
11
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
Platforms may be dedicated to classes of transactions and operated by various entities.
TEPlatformsEnergy
ServicesParties
Intermediaries
Transport Services Parties
Yearly, Monthly
Daily
Hourly
5 min, 4 sec
Energy @ Substation
Yearly, Monthly
Daily
Hourly
5 min, 4 sec
Transport to Facility
12
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
Regulators will have new tools to oversee transactions
TEPlatforms
Energy ServicesParties
Intermediaries
Transport Services Parties
Regulators:Congress, DOE, EPA, FERC, NERC, Legislatures, PUCs, Munis, CCAs, PMAs, Coops
Tender and Transaction Data Bases
13
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
Retail TE platforms can interface with existing wholesale and distribution platforms.
Consumers, Prosumers, and DERs
Device
Service Interface
DeviceDevice
Retail TE Platforms
EnergyDistribution Transport
Oneyear
Tenders and Transactions
Tenders and Transactions
One hour Five minuteOne month
wOneyear
One hour Five minuteOne month
Device
Interoperable Transactive Retail Tariffs
Existing Distribution Operators Forwards and
Futures
Existing Wholesale PlatformsBalancingOperators
Wholesale Parties
14
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www.tea-web.org
15
© 2014 Baker Street Publishing, LLC. All Rights Reserved.
Transactive Energy Platforms: host robust cost-of-service, competitive,
and hybrid business and regulatory models.
Transactive Retail Tariffs: forward subscriptions for revenue and bill stability and spot transactions to efficiently
balance variable supply and demand.
Summary: Two Foundations for Sustainable Business and Regulatory Models
16
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