On The Road to a Smarter Grid: Transactive Energy
In the last five years that the smart grid has gained traction in public conversation, the most significant features of the smart grid as we know it have also been the most contentious: real-time monitoring and potential control of power consumption by way of information and communications technology, such as smart meters. Whether it’s a health and safety concern regarding radio frequency emissions generated by smart meters, or a violation of privacy caused by the increased scrutiny of household energy use, somewhere, somehow, there is always an argument against the deployment of smart grid technologies.
The latest buzz in the electric power industry surrounding “Transactive Energy,” may soon change that negative tune.
What is Transactive Energy?
While there doesn’t appear to be an official definition of the term yet (the first ever global conference for transactive energy was only held this May at Portland’s World Trade Center), transactive energy has been described as “a means of using economic signals or incentives to engage all the intelligent devices in the power grid—from the consumer to the transmission system—to get a more optimal allocation of resources and engage demand in ways we haven’t been able to before” (Sustainable Business Oregon).
More simply, a transactive energy system will add the factor of pricing into the energy data that gets transmitted on a smart grid between utilities, grid operators, and individuals.
Smart Grid vs. Transactive Energy Systems
Before transactive energy systems were proposed, the smart grid would have allowed only power demand and generation to adjust when signals indicate it is either too high or too low. Now, with the addition of a transactive energy system on the smart grid, power demand will also adjust when electricity price is low or high, but even more intriguingly (to end-users, at the very least), electricity price will also adjust according to the balance of demand and generation.
One way to visualize this is illustrated in the figure below by Edward Cazalet, who presented “Transactive Energy: Public Policy and Market Design” at the Transactive Energy Conference in Portland. The representation—which is exponentially more complex than the unidirectional energy markets we have now—exposes the myriad of data management challenges that will arise once transactive energy systems become widespread:
- How will data be centralized for analysis and control when there is data flowing both ways between all participants?
- Where will the data be warehoused?
- Who will be responsible for data management when so many participants are involved?
- And how will the various participants in generation, demand, and pricing respond to each other’s signals in real-time without disruption to service?
Our data management software, the ZEMA Suite, offers businesses in this changing market a way to meet the data challenges currently faced. To learn how ZE can help make sense of data issues, analyses, and integration, book a demo now.
As developments in smart grid technology progress in the next few years, it will be exciting to see how these data management challenges are addressed. In the meantime, a future of more efficient electricity will certainly help get buy-in from reluctant homeowners and businesses that have yet to give smart grids their stamp of approval.
To read more about electricity and the smart grid, see Coordinating Natural Gas And Electric Systems – A New Market Challenge?