Many Automated Buildings readers are headed to the Fourth International Conference and Workshop on Transactive Energy Systems in Portland, Oregon, on June 13 - 15 2017 (TESC17). Transactive Energy is the future of smart energy and grids, a cooperative model whereby buildings participate in grid supply and grid stability.

Transactive energy uses markets to schedule the delivery of services over time. Each service is supplied by a node on a grid (or microgrid). Distributed energy resources and distributed energy resource aggregates can be such nodes. Even an entity that solely consumes power can participate in Transactive Energy; consuming power at the right time is a market service just as is the power supply.

There will be many market models for Transactive Energy. Some areas will use local markets run by the traditional distribution utilities, who will be a party to every transaction. Some locations will allow peer-to-peer trading between buildings and sites. Some sites will use transactive energy internally as a “driver” to a battery storage management system, leaving the internal controls of managing battery cells and systems to the battery makers.

This year, I cannot make it to TESC—so I am presenting some key principles this month to take into this conference.

1. All conversations with nodes on the grid should be conversations with black boxes. How those nodes choose to organize themselves internally is no affair of the larger entity. It’s a black box.
   

2. The purpose of each node / black box is to support the purposes of its owners / occupants / inhabitants, and not to support the things outside the black box.
   

3. Substantially all interactions with the black box can be transactive resource negotiations, i.e., transactive energy.
   

4. A node is its own operating environment. It may make sense for some nodes to organize some or part of their internal operations using transactive energy / transactive agents. A node box may choose to use an internal market to manage some or all of its energy use / generation / storage (/ pre-consumption (temporal shifting) / conversion / recycling).
   

5. If a “device” inside a node operates through market interactions, those interactions are with the internal market, not the external one. There is no direct market interaction with things / markets / prices external to the black box. (see point 1).
   

6. Economic signals or availability from outside the node might influence the market, if any, inside the black box, but only as the market interface on the box relays that information. This may include markups / smoothing / discounts or any other means or mechanism that the owner of the black box chooses to use (or that the maker of the black box chooses to use so that the owner of the node will choose that black box).

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7. Entities outside the black box should not use the possible existence of an economic entity inside the box as an excuse to penetrate the veil of the black box.
   

These principals are in essence restatements of the principles of Service Oriented Architecture (SOA). They enable consumer choice and rapid evolution of technologies within each “node” or microgrid. Honoring them is the way to remove barriers to building system integrators making quick sales and putting technology into the field.

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