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Transactive Energy for Effective Integration of Customer Flexibility

Summary

The electric distribution grid has traditionally served as a conduit for delivering power from bulk generators to customer loads. This system is being transformed by the addition of photovoltaic (PV) power generation, battery storage, and smart load on the distribution grid. These new load, generation, and storage assets can respond to grid signals and are collectively known as distributed energy resources (DER). At the same time, utility-scale generation is moving from coal and gas toward intermittent renewables (wind and PV). The system-wide move to renewables and growth of customer flexibility puts pressure on utilities to better engage with customer-owned resources to provide valuable grid services for both frequency and voltage support.

The traditional grid operation paradigm of utility direct control does not work well for integration of customer flexibility. Industry and regulators are considering the use of market-based methods, called transactive energy (TE), to incentivize customer actions. This project will use the NIST Transactive Energy (TE) Testbed to perform simulations to investigate the ability of transactive tariffs together with automatic controls to manage local grid voltage stability while supporting bulk grid capacity (peak reduction and valley filling). The simulations will use a retail bilateral market for managing load in a supply-constrained segment of the grid. NIST will also continue the work of developing communication standards that provide a foundation for interoperable TE approaches. In support of the NIST responsibility to coordinate smart grid interoperability, the project members will actively work with industry in the Smart Electric Power Alliance to advance TE science and standards. The results of this project will help industry develop interoperable tariffs and communication standards for the next-generation electric distribution grid.

Description

Objective
The TE Flex project will provide the scientific basis for effective customer DER integration using transactive methods by 2026 with industry collaboration. Simulation studies in the NIST TE Testbed will investigate how transactive exchanges can optimally engage the flexibility of different devices to provide grid support (frequency and voltage stability) while maintaining customer control of device operation. Simulation results will guide standards development to provide a foundation for interoperable TE solutions. Collaboration in the Smart Electric Power Alliance (SEPA) will provide shared understanding of TE principles and architecture while providing a conduit for research results and standards to impact utility pilots and programs, vendor products and industry regulations.

Technical Idea
Over the past 15 years, NIST has provided leadership in developing smart grid standards for building-grid integration (ASHRAE/NEMA 201, Facility Smart Grid Information Model), building controls (ASHRAE 135, Building Automation Control Network, BACnet), energy usage information (NAESB Energy Usage Information), meter data communication (Green Button), and information models for the building-grid interface covering demand response (IEC 62746-10-1 Open Automated Demand Response, OpenADR) and market interoperation (OASIS Energy Market Information eXchange and OASIS Energy Interoperation). Work continues with industry to identify gaps and develop proposals for additional standards efforts and industry guidelines.

These standards provide a foundation for interoperability. The development process highlighted a need for basic research related to transactive methods for DER integration, for simulation tools, and for better understanding of the impact of DER on power quality in the distribution grid. In 2015, NIST initiated a “TE Modeling and Simulation Challenge” with the goal to bring industry partners with co-simulation models and tools together to improve TE co-simulation capabilities. This challenge was instrumental in developing the NIST TE Testbed capability for this project.

In the past five years, NIST has focused research on the challenges of distribution grid control as outlined in the NIST Smart Grid Interoperability Framework 4.0. Within this scope is the challenge of integrating smart customer devices: loads, storage, and renewable generation. These resources offer the promise of replacing (in part) transmission grid generation and providing grid control using local generation and controls. This in turn can support grid frequency and voltage, reduce system losses, improve power quality, while in total boosting resiliency. Achieving all these benefits requires a significant shift in how the customer interacts with utilities and grid operators, demanding transactive signals and market interactions.

In FY23, this project examined the impact of dynamic prices on customer economics and distribution grid voltage, comparing two dynamic electricity pricing tariffs (day ahead hourly prices versus 5-min real-time prices). This work highlighted the potential benefit to the customer, and to the grid, of dynamic prices, but also the potential negative impact of rapid response to changing prices by a large percentage of load.

The technical idea is to take a set of basic transactive approaches that have been proposed and to test them systematically in various grid and building configurations using the NIST TE Testbed. The goal is to find out how much flexibility is made available by different customer devices using different transactive approaches and to quantify the resulting support for frequency, voltage, and power quality control and the potential benefit to the customer. Results on the sources of flexibility and methods for accessing flexibility will be published in journals to support understanding of effective and workable TE approaches. The results will also support NIST’s contributions to new or revised industry standards. 

Research Plan
This project has three thrusts: simulations in the NIST TE Testbed, standards development, and collaboration activities in SEPA.

Simulation Experiments

A series of co-simulation experiments will be performed in the NIST TE Testbed using a set of simulation components (federates). These federates include: GridLAB-D solver with selected model grid configurations, a NIST-developed controller that manages battery, heat pump, water heater and electric vehicle operation in response to price signals, a market federate to implement a bilateral market function, and helper federates including ones for tracking market transactions and calculating customer bills. Together, these co-simulation federates will enable a set of experiments to evaluate flexibility contributions under different conditions and market approaches.

  • In FY25 NIST will complete studies of the use of dynamic prices and a TE market to enable a building to manage flexibility behind a single service transformer with application to the EV cluster problem. In a constrained grid, the service transformer may not be able to support simultaneous charging of all electric vehicles behind the transformer. This research examines the use of a local bilateral market for negotiating among neighbors for optimal charging schedule, comparing this to a local-price-only no-market approach.

Standards Development

NIST will continue to lead in the OASIS Energy Interoperation Technical Committee in the development and publication of the Common Transactive Services (CTS) specification with the goal to advance the OASIS specification to international standard status in ISO TC68 Financial Services.

SEPA Collaboration

The project PI will continue to lead in the SEPA TE Working Group (TEWG) as we seek to discuss and understand technical challenges in TE architectures and implementations. TEWG subgroups are working to provide guidance to utilities and regulators on the value of TE and tools and standards for implementation, including guidelines for regulators and utilities. SEPA provides a platform for educating and supporting utilities to implement TE approaches, as well as to advance the use of CTS. In FY25, SEPA intends to release a TE Field Guide, and NIST will contribute to the content of that guideline and promote the uptake of the recommendations.


REFERENCES:

 https://www.gsa.gov/cdnstatic/GBAC%20Decarb%20Advice%20Letter_APR-2022.pdf

https://www.gsa.gov/cdnstatic/Bldg%2520Grid%2520Integration%2520Advice%2520Letter%25202-21-19%2520-%2520508.pdf

 https://gridwiseac.org/pdfs/pnnl_26539_gwac_te_roadmap_overview.pdf

 https://gridwiseac.org/pdfs/pnnl_22946_gwac_te_framework_july_2019_v1_1.pdf

 

Created March 10, 2025, Updated March 26, 2025