IEEE Electrification Magazine - June 2018 - 85

in the face of these challenges, potential solutions are emerging, including the new distribution system operator (dsO) construct and transactive energy (te) systems. the term transactive DSO signifies the confluence of the two constructs. the transactive dsO retains the
responsibility of operating the distribution system reliably and economically while fostering
a retail market for transactive exchanges among prosumers as well as voluntary participation in a bid-based dsO-facilitated retail market.
to accomplish these tasks efficiently, the dsO needs a platform with new applications and user interfaces as well as new measurement, control, and analytics to
operate the distribution system reliably and cost-effectively, while accommodating
profit-maximizing/cost-minimizing incentives for prosumers. in this respect, the
dsO may operate in several time frames, including forward markets such as auctions
for nonwires alternatives based on hosting-capacity studies and locational net benefit analyses, day-ahead markets, and bid-based real-time spot markets, all while
accommodating peer-to-peer transactions. real-time control and performance
monitoring of the der is an important part of the process for which, given
the large numbers of ders and data points, the dsO platform requires
applications and procedures based on big data and internet of things
(iot) techniques.
the platform capabilities must also include provisions for the dissemination of information to align prosumer investment decisions
with distribution operational needs and facilitate the realization
of der projects (e.g., a bulletin board or other types of matching
capabilities where interested prosumers may find accredited
der installers). We refer to the dsO platform with these capabilities and services as a transactive distribution management
system (tdMs). depending on regulatory provisions and approved
dsO business models, the dsO may be allowed to provide such services
for a fee, compensating for some of the utility's revenue loss due to
reduced energy sales.

Contextual Framework
the operation and control of grid-edge assets based on existing regulatory provisions and utility practice rely primarily on a framework that requires participation in predefined utility distributed resources (drs)/der programs. in the
united states, progressive regulatory jurisdictions such as new york, california,
hawaii, and illinois are implementing mechanisms for new market-based utility operation and business models. these include forward auctions for
der capacity as well as provisions of grid services through forward and
spot markets. the role of the dsO is expanding under this emerging
paradigm, from one solely responsible for the planning and operation
of the distribution grid to one that also facilitates bilateral and bid-based
transactive exchanges.
As a contextual framework, we recognize the following four quadrants for grid
modernization evolving in three stages primarily characterized by the extent of der
penetration:
xx
Stage 1: low der penetration (less than 5%)
xx
Stage 2: moderate der penetration
xx
Stage 3: high der penetration (50% or more).
the der percentage reflects the average annual expected percentage of end-use demand
satisfied by ders.
Figure 1 schematically shows the four quadrants for grid modernization, i.e., economics,
reliability, resiliency, and customer service, with each accompanied by a number of attributes. the evolution of various quadrants along the three stages may occur differently,
depending on regional requirements and regulatory provisions. For example, the reliability
quadrant involves mostly maintaining and possibly augmenting the reliability of system
operations in the wake of increased active participation of ders and grid-edge operators. On
	

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Table of Contents for the Digital Edition of IEEE Electrification Magazine - June 2018

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