!!

Transactive Energy A Sustainable

Business and Regulatory Model for Electricity

!Environmental Energy Technology Division Seminar

Lawrence Berkely National Laboratory June 22, 2014

!Edward G. Cazalet, Ph.D.

CEO, TeMix Inc. ed@temix.com

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Transactive Energy has four big ideas.

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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 act autonomously.

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

A fully-equipped home (or business) looks like this in the Transactive Energy (TE) model.

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TE Service

Interface 0321

Grid

HVAC!System

Water!Heater

Battery

Smart Appliances

Interval!Meter

Transactive Energy Platforms

EMS

Forward & Spot Tenders &

Transactions

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

The TE business process is straightforward. There are tenders and transactions. There are two kinds: “forward” and “spot.”

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© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

The Transport product delivers the Energy product.

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Electric energy (produced at a place and time)

Transport Electric energy (delivered at a different place and same time)

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Here’s an example of how TE works for a consumer.

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My energy management system (EMS) automates this process for both energy and transport.

• Based on my typical usage, I automatically transact with one or more suppliers for delivery of a fixed quantity of energy in each hour of the year(s) for a fixed monthly payment (subscription.)

• If I use less than I subscribed for in each hour then I am paid for the difference at an hourly spot price.

• If I use more than I subscribed for then I pay for the difference at an hourly spot price.

• At any time I can automatically buy or sell a quantity of energy at current tendered prices.

© 2014 Baker Street Publishing, LLC.  All Rights Reserved. 7

kW

0

25

50

75

100

Hour1 3 5 7 9 11 13 15 17 19 21 23

Forward Positions

Spot market transactions are used to buy or sell the difference between forward positions and actual delivery.

Actual Delivery

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Forward tenders and transactions coordinate investment decisions. Spot tenders and transactions coordinate operating decisions.

Transactive Energy Platform

Weather

Solar Output Wind

Output

Actual Usage

Climate Change

Technology

Regulation

Net Benefit

Outcome

Decision

Uncertainty

Influence

Capital Stock

Forward Tenders and Transactions

Investment !Decisions!

- Consumer! - Producer

Operating !Decisions!

- Consumer! - Producer

Spot Tenders and Transactions

Positions

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Parties interact on independent TE platforms with oversight.

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Transaction Platform Providers

!

Energy Services Parties

!!!

Intermediaries - Exchanges - Marketers - Retailers - System

Operators !Transport

Services Parties

!-Transmission Operators

(TO) - Distribution Operators

(DO)

TE Service

Interface

- Consumers - Producers - Prosumers - Storage Owners

Tenders and Transactions

Grid Custodians: Congress, DOE, EPA, FERC, NERC, Legislatures, PUCs, Munis, CCAs, PMAs, Coops

Tender and Transaction Data Bases

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Parties use a TE Service Interface to control devices/systems and manage tenders and transactions.

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Management Algorithms (EMS)

Device State

Devices and Systems

Control Signals

!

Weather forecasts

Objectives

Transaction Platforms

Benefit

TransactionsTenders

TE Service Interface

Energy in/out

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Standards and protocols support commerce.

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TeMix ProtocolElectric energy and transport transactions

Internet Protocol (TCP/IP)Data Transfers

FIX ProtocolFinancial Transactions

High volume, high speedStandards

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

The “open and free” TeMix protocol covers the required process and content.

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TeMix ProfileEMIX

!EI

ContentProcess

Catalog of Standards

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Transactive Energy can be incrementally deployed to work with current systems and entities.

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Consumers, Prosumers, and DERs

Device

TE Service Interface

DeviceDevice

Retail Transactive Energy Platforms

Energy Distribution Transport

Forwards and Futures

Existing Wholesale Platforms

System Operators

One year

Tenders and Transactions

Tenders and Transactions

One hour

Five minute

One month

wOne year

One hour

Five minute

One month

Device

Transactive Retail Tariff

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Transactive Energy is a “Silver Bullet.”

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• It will spur innovation.

• It is fair and transparent.

• It will provide incentives for efficiency.

• It addresses many vexing problems:

• renewables,

• net metering,

• investment, reliability and fixed costs,

• price responsive demand,

• decentralized generation, storage and microgrids,

• wholesale/retail coordination, and

• regulatory.

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Transactive Energy pilots Statewide"Rollout

Enabling Legislation

Pilot Monitoring

Stewardship Council

Figure 6-1. The TE rollout process for California

TIME

© 2014 Baker Street Publishing LLC. All Rights Reserved

The TE rollout process for California.

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© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Organization Chart for the TE Initiative

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© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Transactive Energy has four big ideas.

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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 act autonomously.

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Visit TEA for continuing open discussion of Transactive Energy :

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www.tea-web.org

© 2014 Baker Street Publishing, LLC.  All Rights Reserved.

Available on the Apple iBook Store.

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