IEEE Power & Energy Magazine - May/June 2016 - 48

Over 2 MW of Generation Interacts
Directly with PJM

1,316 LMPs Within ComEd Territory

figure 1. The PJM service territory and potential ComEd DSOs.

with no elasticity, that is, a single hourly value for total load
to be served. There are several advantages associated with
this approach. For instance, there is available technology for
the implementation of such a model. In terms of the energy
rates charged to customers, this would not appear to be a
major tariff redesign if customers can be placed on real-time
pricing. This model imposes very little requirements on customers. Only those customers seeking to offer generation into
the DSO market or offer demand response (DR) into the DSO
market really have to interact with the model. However, this
single-sided clearing model does not allow for load to participate other than as DR. The DR model as a supply-side resource
works adequately for modest DR participation but can lead to
inflated clearing prices at high DR levels depending upon the
DR prices relative to supply resources.

Two-Sided Market Clearing
This two-sided model [Figure 4(b)] is "identical" to the single-sided market model but with the critical difference that
the demand side is represented as price elastic around a forecast load level. This model addresses customer participation in a DSO market. However, it requires greater customer
engagement, education, and participation.

DSO

ISO

* Forecast Net Load
and Dispatchable
Products
* Schedules and Bids
* Metering and
Telemetry

* Schedules
* Dispatch
Instructions
* Prices
* Settlements

figure 2. The DSO and ISO exchange of information.
48

ieee power & energy magazine

Transactive Energy
The term "transactive" comes from considering that decisions are made based on a value. These decisions may be
analogous to or literally economic transactions. In short,
transactive energy refers to the use of a combination of
economic and control techniques to improve grid reliability and efficiency. More specifically, hour-ahead and
5-min markets for physical energy coordinated through
a DSO operator for supply-demand balancing and longer
term month-ahead and longer contracts for the supply of
energy to customers that are a market-based alternative
to competitive energy retailing will be developed. In the
longer-term markets, a "matching" of supply and demand
transactions (or bids and offers) by a market matching service will be offered.
The motivations for transactive energy come from the
increasing diversity of resources and components in the electric power system and the inability of existing practices to
accommodate these changes. The growing deployment of
large-scale variable generation, DER integration throughout the distribution system, and new intelligent load devices
and appliances on the consumption side all necessitate new
approaches to how electric power is managed and delivered
as well as the economic and business models involved. Conventional wisdom is that once variable generation resources
reach 30%, the current grid control systems will simply be
inadequate. Transactive energy systems provide a way to
maintain the power system reliability and security while
increasing efficiency by coordinating the activity of the growing number of DERs. Transactive mechanisms that properly
align value streams across all interested parties will lead to
a greater proliferation of DERs. This in turn will lead to an
increase in volume services, potentially leading to a greater
need for and the provision of custom solutions as well. Utilities may be able to substitute volume services (and revenues)
may/june 2016



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