Transactivating the Next U.S. Power Grid

transactive energyThe U.S. power grid has been called a modern engineering marvel, but it’s long overdue for a massive upgrade. Enter big thinkers and an emerging concept for the future: transactive energy. Huh?

“Transactive energy is 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,” said Carl Imhoff, manager of the electricity infrastructure sector for Pacific Northwest National Laboratory and moderator at the first U.S. conference on the subject held earlier this year.

Utilities across the country are amassing volumes of data from newly installed smart grid systems. Transactive energy systems, say the experts, will aide in putting all that data to work, integrating both utility-owned and third-party-owned resources, including power generation, ancillary services, load management services, etc. in order to secure the lowest-cost electricity in real time.

The key driver of this concept is economic: everybody wins — service providers, consumers and potentially, the environment.

“A transactive energy system utilizes smart grid infrastructure to send signals back and forth between utilities, grid operators and individual assets in the grid system, communicating the real-time flow and cost of power,” blogs Reese Rogers, a MAP Sustainable Energy Fellow at Worldwatch Institute.

According to Rogers, this is no pipedream. Transactive energy demonstration projects are now under way to begin understanding the challenges and full benefits of such systems. The Pacific Northwest Smart Grid Demonstration Project is the largest transactive energy demonstration in the U.S. at present. (Source:

“Certainly these are large challenges to surmount”, he said, “which require not only technical solutions and regulatory reform, but also a shift in thinking away from a decades-old mindset of a centralized electricity system. But the good news is the right people, including utilities, regulators, grid operators, and other stakeholders are coming to the table. The transition to a transactive energy system will be an evolution, not a revolution.”



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