Written By: Stratton Report
February 23, 2017

Highlights from Stratton Report’s Second Grid 2.0 Symposium: “Transactive Energy – A Customer-centric Approach”

Can California really get to 100% renewables by 2045? A bill just introduced by state Senator Kevin DeLeon aims to do just that.

If so, truly extreme, radical changes in how the energy distribution grid operates will be required – even more radical than the innovative concepts under way, involving large-scale storage, “integrated demand management”,  and “zero net” efficiency, to meet the current 50% by 2030 goal, enshrined in SB350.  

One broad way of encapsulating these changes, where energy flows in a fully decentralized manner back and forth between thousands or millions of small and medium-sized buyers and sellers, rather than radially from a central power plant out to customers, is the catchphrase “Transactive Energy” (TE).

While definitions vary, the term typically evokes complex energy exchanges where “prices are tied to devices.” Whereas previously, or currently, such exchanges were limited to very large scale power generators and commercial and industrial users, TE sees a future where every home, business and facility – and car — is a node in an energy marketplace, and where all the major energy producing and using devices within those nodes, can themselves be active sub-nodes – for example, an EV, the EV charger, home smart inverter, washing machine, water heater, home battery array.

Possibly the most carefully systematic, detailed approach to implementing Transactive Energy is the model proposed by TeMix, Inc., led by long-time California Grid visionary Ed Cazalet, who previously developed APX, and was a key force in instigating AB2514, California’s Energy Storage Mandate.

At Stratton Report’s second Grid 2.0 Symposium held Feb 21 at the Computer History Museum in Silicon Valley, Cazalet explained how a formalized, high granularity market of bilateral trades between automated energy devices owned by participants, mediated by a “TeMix box” at the node level, would naturally alleviate many of the problems now faced by utilities, regulators and grid operators. Myriad “micro” energy buys and sells could operate on as tight a timeframe as 5 minutes, with both spot and forward markets including long-term “energy subscriptions” that provide contracted baselines for retail customers.



In the same way as steel markets or food markets are not “balanced” by any centralized authority, so a truly distributed energy market, in Cazalet’s conception, could work in a bilateral way as long as everyone is provided with the required energy and distribution system price information. Cazalet’s TeMix won a $3.2 million grant to undertake a pilot project to demonstrate the feasibility of his approach in collaboration with SoCal Edison and Universal Devices, in a community of 200 homes and small businesses.

According to Cazalet, who once sat on the board of CAISO,

millions of dollars are currently wasted in the existing centralized grid balancing method 

Cazalet also took issue with the emerging model of the distribution system operator, or “DSO” proposed under NY REV by the outgoing chair Audrey Zibelman, an idea that is also being contemplated by California regulators. Cazalet believes such an approach “would be a disaster for operators and customers” if implemented because setting up such a centralized distribution authority would be pointless expensive.

(A more detailed critique by Cazalet of Zibelman’s REV vision can be found in a post on the Transactive Energy Association LinkedIn Group.)

The TeMix platform is an open architecture and can be implemented across any number of different devices made by different vendors and communicated over any number of different networking protocols. The original design work was started under NIST, and is based on OASIS standards/protocols.

Cazalet’s presentation was followed by a panel, energetically moderated by Todd Strauss, Senior Director of Grid Strategy and Analytics at PG&E. The panel included speakers from Intel, EPRI, GELI, Sustainable Energy Project, and the newly formed Dynamic Grid Council.


Some panelists explored parallel approaches – possibly complementary, and possibly competitive — to Cazalet’s implementation vision, in particular Rish Ghatikar, Technical Executive at EPRI, and a leading developer of the OpenADR standard for Demand Response, who has a “Distributed Energy Resources Customer Adoption Model (DER-CAM)” pilot funded under the same CEC 15303 proceeding as the TeMix pilot. 

Other relevant pilots under the CEC grant GFO 15-311, “Advancing Solutions that Allow Customers to Manage their Energy Demand” can be found here.

Ryan Wartena, CEO of Geli, sketched facets of his GELI “OS” platform, which allows remote control of multiple networked energy storage devices, tied to various “stacked” energy product categories and rates. Cazalet’s vision was an early influence on the development of the Geli platform, according to Wartena. [& Wartena was the first person we heard utter the phrase, “Internet of Energy,” over 7 years ago.]

Per Geoff Sharples from Intel, “some version of Transactive Energy is inevitable, it’s just a question of how fast we get there.”  Intel wants to understand future requirements for its chips from the vast new IT needs of the “high D.E.R. penetration grid.”


Host/MC Mike Burke of Sustainable Energy Project injected a cautionary note:

Transactive Energy will need ‘scrubbing’ from a contractual, legal, and regulatory POV. There are years of proceedings ahead of us on rates and tariffs. TE proponents need to watch out for institutional and regulatory hurdles.

Tim Keating summarized the big picture, with the image of “uberizing” energy assets (in other words, delivering new valued uses of existing energy consumer or generating devices) so they become “Swiss Army knives”, delivering not just simple energy but other services like frequency regulation and reactive power. Keating also emphasized the value of his new organization as a way to push the new paradigm forward with regulators and legislators.

Wrapping up the evening panel, Cazalet stated “next steps are experimentation and tariffs from the commissions and the utilities.” Cazalet’s book on Transactive Energy is available from Amazon.