Transactive Energy System: Market-Based Coordination of Distributed Energy Resources

Abstract: Distributed energy resources (DER) provide significant value for renewable energy integration in modern power grids. However, unlocking this value requires complex design and coordination. This paper focuses on the emerging {\em transactive energy systems}, which draw tools and principles from economics to design the coordination strategies for DERs. The concept of transactive energy system broadly captures a huge body of literature, and many of them are closely related but fundamentally different. This gives rise to the following questions: how to formally compare different transactive energy systems and their proposed approaches? How to choose the right transactive energy system to formulate a given problem? What tools are available in the literature for each class of transactive energy systems? In this paper, we answer these questions by synthesizing a unifying framework for a large class of problems studied in the literature. The framework consists of preferences, control decision, information structure and solution concept. These elements are important in identifying and distinguishing various transactive energy systems in the literature. We employ the proposed framework to analyze a few important class of transactive energy systems. Their connections and differences are discussed, and available tools for each class of problems are surveyed.