IEEE Power & Energy Magazine - May/June 2016 - 63

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A Tale of
Two Visions
Designing a
Decentralized
Transactive Electric
System
By Lorenzo Kristov,
Paul De Martini,
and Jeffrey D. Taft
Digital Object Identifier 10.1109/MPE.2016.2524964
Date of publication: 19 April 2016

may/june 2016

C

CONVERSATIONS ABOUT DISTRIBUTED RESOURCES,
the transactive grid, and the future of the electric industry
abound with terms like decentralized, disruptive, distribution
system operator, and distribution marginal pricing. In this time
of rapid and dramatic change, it is tempting to jump right to
the sexy market design, utility business model, and rate-making
and regulatory framework issues and assume that the mundane
operational realm where the laws of physics apply will sort itself
out. As a result, it is not surprising that most industry futurists
have not noticed the emergence of two clearly distinct visions or
paradigms for how a decentralized, transactive electric system
with high penetration of distributed energy resources (DERs)
could be designed to operate.
We start from the operations perspective and describe the
two visions in some detail, compare them, and draw implications for key design and regulatory questions being debated
today. Operations, in this context, means the reliable operation of the high DER physical electric system as a whole, from
the balancing authority area to the end-use customer, and thus

1540-7977/16©2016IEEE

ieee power & energy magazine

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

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IEEE Power & Energy Magazine - May/June 2016 - Cover3
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