I have written here before about NIST-CTS, an open source implementation of a transactive energy market, designed to support TE (Transactive Energy) market modelling within the NIST Cyberphysical Systems modelling tool. While most TE research has been dependent upon double auction-based markets, NIST CTS, the initial release of the EML-CTS system, was developed to model transactive energy using a financial-style order book.
Original NIST Use Case
The predominant supplier was a hypothetical bulk market providing 24 hourly prices. All purchases were committed, that is the purchaser owned the power whether or not it was consumed, but could opt to sell any portion thereof back to the market, offering any price the consumer chose. Of course, there was no guarantee that the consumer could sell back this power at any price.
Assume the operator of the wholesale market decides at what price it wants to sell at each hour of the next day. A module external to the market, herein called the External Market Adapter (EMA), computed any additional transmission fees, congestion fees, and distribution operator charges to compute 24 prices for use inside the microgrid. For purposes of discussion, discussion, assume these prices arrive at the market by 9:00 AM and are good until 3 PM.
These local market as 24 unbounded tenders to sell power, each for its own price. The combination of a product (power) and a discrete time (10 AM to 11 AM) defines an instrument, and each instrument is traded separately in the market. The Local Market notifies each participant in the microgrid of the tenders that create the 24 new instruments. Each of the nodes considers decides how much power to buy during each hour, if any, and submits tenders to buy each instrument to the market. As the tenders to buy and sell match, contracts are awarded, and each participant is notified.
The Local Market records the position, that is the net quantity of each instrument bought or sold for each party.
At 3:PM, each of the unbounded tenders from the EMA expires and is purged from the market for each instrument. The EMA knows its position for each hour and can firm up its commitments in the bulk market.
At any time, any party may submit a tender, an offer to either buy or to sell any instrument. Any participating node, including the EMA, may submit an offer to buy at a price of tis choosing. Any participating node, including the EMA, may submit an offer to sell power at a price of tis choosing, including to sell the power it previously made a commitment to buy.
Participants can trade any instrument only until it reaches maturity. For instruments in a microgrid market, maturity occurs when the begin time of the instrument interval is past—one cannot tender power from 1 PM to 2 PM at 2:25. Periodically, the system purges post-maturity instruments from the market.
Settlement
Settlement occurs after the market interval is complete, to align market operations with actual consumption. They system design assumes that there is some “spot price” for each interval.
The EMA is able to read the meters as well as the request the position for each party for each interval. If the meter for an interval is greater than the position, the difference is made up through imputing purchase of the difference at the spot price. No adjustment is made a position greater than the spot price.
While settlement mechanism were discussed, and the capability of position management was designed in, settlement was out of scope for the NIST-CTS implementation.
Temporal Refinements to the Original Use Case
The initial use case posited hourly intervals only. No provision was made to for an instrument to power for 15 minutes during the 3rd quarter of an hour.
Any market participant can create a new instrument at any time by submitting a tender to the market for a legal interval. Legal intervals are those that conform to market rules. For example, a market may not permit a 7-minute interval that straddles an hour. All participants are notified when a new instrument is created. Intervals that are unusual may never be able to find a market.
It is interesting to speculate who would use, say, 5-minute intervals in a 1-hour market. Does the external market submit tenders for 12 short intervals in an hour ahead market? Does a local market participant acting as an arbitrageur, buying power for an hour and submitting tenders to resell it in smaller time slices? Would a battery system fall naturally into this arbitrageur role? Does a distribution grid operator make tenders at the beginning and end of an hour to smooth out sudden changes in power consumption associated with big price deltas on the hour? The EML-CTS system makes no assumptions and the area one of many ripe for research and trial.
When a participating node is itself internally managed by a TE nanomarket operating a nanogrid, there is no requirement that it make the same decisions as to temporal granularity as does the containing grid. Smaller discrete systems may naturally consume power for shorter intervals than do larger aggregate systems.
Future Market Research
There are many issues to settle to enable wide deployment of Transactive Energy and Fractal Microgrids. The architecture of EML-CTS was developed with a goal of enabling long-lived deployments even as our understanding changes with further research.
We need a wider understanding of how TE supports current evolution of traditional distribution grid operation. For example, Laminar Coordination and Laminar Control name the strategy of maturing the top-down grid to support DER. Under this model the grid is defined a layers of control, or laminae. Each layer informs nodes in a lower layer to establish goals and guidelines. Each node, which may itself represent a layer containing nodes, determines how it is able to respond. Each node abstracts and passes up situation awareness to the higher layer. These nodes could well be implemented as microgrids, using the micromarket for internal coordination.
There are ongoing discussions of correct market design. Many researchers are attempting to fine-tune the double auction markets that they consider the best method to establish initial pricing for and time interval. Others see financial-style markets as best able to respond to small changes in local power consumption and availability over time. In the EML-CTS architecture, a microgrid integrator can choose one market engine or another, or even use both, replaced without changing any of the software in the participating nodes.
None of the current TE engines handle well what Dr. David Chassin has termed the “airline ticket problem”. If a long-running power-consuming process can be delayed until the best economic time, how should a node probe the market to determine that time? How should noted manage their internal base loads and shiftable consumption?
Longstanding policy manipulates today’s power markets to support equitable access to power. Today these policies masquerade as tiers of power consumption. One can imagine market policies ranging from “first crack” at the market to after-market rebates on purchases. We make no judgements on which path is best; wide use of TE using the EML-CTS architecture enables new strategies even as it disables reliance on formal tiers.
The EML-CTS architecture relies on simple standard messages on a networked service bus to operate each micromarket. The message definitions, the Common Transactive Services, are being developed into open unencumbered standard specifications. Communication services for those standard messages are being developed into common open source libraries. Any experimental agent today, and any real-world device or system tomorrow developed to use the CTS standards should be able to participate in EML-CTS-based markets without change.