IEEE Power & Energy Magazine - May/June 2016 - 54

The TE systems framework expands the transactive
paradigm established in the mid 1990s for
wholesale markets into the retail domain.

The utility-managed DSO will have the responsibility
for maintaining distribution system reliability, and in that
context, it requires visibility to transactive operations.
This responsibility entails maintaining and exercising the
rights to approve, adjust, or curtail transactions that jeopardize the operational integrity of the distribution system.
Depending on the timing, magnitude, and location of
the transactions, the DSO's interactions with transactive
agents may vary.
For example, the DSO can provide an advisory role in
forward transactions, helping the transactive agents verify
physical deliverability of their transacted products. Closer to
real-time operation, a combination of price signals (resulting from bids and offers) and distribution system constraints
(such as limits on current or power flows through constrained
distribution facilities) may prevail. This is similar to bulkpower/wholesale market practices whereby a combination
of bilateral transactions and market-based bids and offers
are used for transmission constraint management. Prosumer
participants need to be aware that local grid design and construction may not allow rerouting around faults or congestion
as is frequently possible in bulk markets. These limitations
are a combination of the prosumer's physical location on the
grid and the nature of the distribution facilities feeding their
point of connection.
As an example, similar to the wholesale markets whereby
system constraints are managed through electronic tags, it
is envisioned that the retail market participants engaging in
bilateral transactions would interact with the DSO through
the so-called microtags (or D-tags) to help resolve distribution grid constraints. (The term D-tag, for distribution tag,
is coined by Open Access Technology International (OATI)
to signify such priorities vis-à-vis distribution system constraints; D-Tag is an OATI patent-pending process.)

TE Systems Framework
Transactive Operation Modes
In this section, we present some refinements with a view to
extending applicability of TE in end-to-end power system
operation. Under the TE systems paradigm, the grid-edge
devices, prosumers, or retail entities may operate as transactive agents in one of the following modes at any given time:
1) autonomously based on local prosumer/entity
preferences
2) in response to bilateral transactive bids and offers
54

ieee power & energy magazine

3) in response to market price signals established by a
market operator
4) in response to operator instructions.
The mode of operation of a transactive entity, e.g.,
grid-edge device, may transition from one of the above
modes to another based on changes in the entity's prevailing status, temporal considerations, ambient conditions,
or system conditions. Under the TE systems paradigm, in
normal conditions, it is expected that autonomous, bilateral, bid-based operation, and price-responsive modes
would prevail. In a full DSO-based operation, bilateral
and bid-based transactions will be finalized by the DSO
as operational schedules that will be communicated by the
DSO to the transacting parties. Under emergency system
conditions, DSO instructions may supersede the mode
of operation for some grid-edge devices based on established system operation practices such as priority schemes
established via electronic tags as practiced in bulk-power
markets. The ability of the prosumer to transition from
one mode to another may or may not be restricted depending on prevailing TE system protocols established by relevant local, state, or other responsible regulatory entities,
administered by the DSO.
Among the above modes, the first two (autonomous
and bilateral transactive modes) are least constraining on
the prosumers but may entail unintended reliability consequences for system operation. To accommodate those prosumer-preferred modes, there is a need for the DSO to have
bids and offers at its disposal submitted by the transactive
agents that can be dispatched to relieve distribution system
constraints. Generally these would result in schedules and
localized price signals to which other grid-edge devices may
respond (mode 3). In the absence of such bids and offers,
the DSO would resort to priority schemes embedded in the
D-tags associated with bilateral transactive exchanges.
For consistency with the currently operating wholesale
transactive counterparts, we will refer to the quantity of
expected or contracted production from a prosumer premise
or device in a given time interval as a schedule. Under the
autonomous mode, in an unconstrained region, the schedule is not necessarily known before the fact. For the other
modes, the schedule is determined based on bilateral transactive arrangements, the DSO process, or operator instructions, as the case may be. Figure 1 schematically shows the
interactions among different agents including consumers,
prosumers (which include transactive devices), microgrid
may/june 2016



Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - May/June 2016

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