Transactive Energy and Experiences from Smart Cities

The fourth International Transactive Energy (TES2017) conference is being held in Portland, Oregon on June 13-15, 2017. The conference will cover a wide range of topics relating to the smart grid, transactive energy[1] and distributed energy resources (DERs). An emerging trend is the discussion of smart cities and how they can use transactive energy systems to integrate various technologies to effectively manage the resources of a city in a secure manner.

Smart Cities panel at TES 2017

The Smart Cities panel at TES 2017. Source: Smart Grid Northwest

The TES 2017 Experiences from Smart Cities panel includes representatives from utilities, companies that manufacture products or control network platforms used by devices in smart cities, as well as distributed energy consultants, and Internet or smart grid solution providers. Panel members will discuss challenges they see for smart cities and how smart cities can integrate DERs and transactive energy applications. Erik Caldwell, Economic Development Director for the City of San Diego, will talk about effective smart city solutions being implemented in San Diego.

The panel will discuss these questions:

  • What challenges did the cities set out to address, and what were the main challenges in meeting them?
  • How much focus was placed on the use of energy between utilities/services (gas, water, electricity, transport, safety, etc.) and optimization of the dependencies?
  • Were there areas where optimization techniques would have provided improved decision making?
  • Have you looked at how Transactive Energy Systems could help?

What is a Smart City?

A smart city is a vision to integrate multiple information and communication technology (ICT) and Internet of things (IoT) solutions in a secure fashion to manage a city’s assets, just as smart grid is for the electricity infrastructure. As the power grid considers the need to accommodate the substantial scaling use of flexible DERs, and has devoted growing attention to the need to address not only the economics, but also the control system implications to ensure grid reliability, smart cities have similarly complex challenges. For smart cities, the economics need to be optimized over multiple utilities, transportation, and other departments while making more efficient use of physical infrastructure through artificial intelligence and data analytics to support a strong and healthy economic, social, and cultural development. A vision is emerging of a connected world in which building equipment, the grid and a variety of systems coordinate with each other to transact business with service providers (such as gas and electric service providers).

Elements of a Smart City

Ron Bernstein, CEO of RBGC Consulting and Member of GridWise Architecture Council (GWAC), is moderator for the smart cities panel. Bernstein sees transactive energy playing an important role in a smart city because of the emphasis on interoperability between various systems and a method of paying for transactions. According to Bernstein, “The players that are involved in making decisions and in designing architecture solutions and services for smart cities are also part of a group of stakeholders that influence how energy is used and the integration of resources that support the city. These grid related resources include the electric utility, cogeneration, related distributed energy resources (DERs), water, gas and the various applications that control energy usage, some of which are poised well to implement a transactive approach between the city, the utility, and the resident. Part of the challenges of a smart cities approach is how to interact with vendors and providers across a range of initiatives such as enhanced sustainability and efficient use of core infrastructures. In designing for a smart city, it is important for groups to think about how what they are designing could act or react with distributed energy resources. One of the areas to consider for smart city design is efficient energy use and cost reductions. For example, energy usage of street lights is often a large portion of a city budget and is a service that cannot be shut down if funding is low. So, part of the strategy should be making the smart street light more intelligent with better control such as dimming. Things to consider include whether it is possible put in lower cost fixtures or if it is most effective to put in smart street lights mainly in more populated areas.

The city infrastructure is an important part of a smart city. Infrastructure areas to consider include roads, communication, and various distributed energy sources such as cogeneration facilities and solar power. A key element is the communications infrastructure which includes areas such as communicating with traffic lights, emergency signage, parking meters and electric charging stations. All of those things have infrastructure, use energy and have the ability to share their information in an interoperable fashion. Part of smart city planning involves how to effectively communicate or do metering between these separate infrastructure elements as well as developing an effective transactive energy method for pricing (valuing) transactions.”

Disruption of Business Models with Distributed Energy Resources

The panel will also discuss challenges and possible disruptions in moving to more distributed energy resources and payment methods. “Distributed Energy Resources (DER) such as storage, solar, wind and responsive loads (such as buildings) are a critical component of a future smart, sustainable, resilient community. Ideally, a significant number of these DERs will be privately funded and built. To create a viable market that rewards community members for adding these resources to their buildings, vehicles and infrastructure, we expect transactive energy systems to develop. This kind of market will react far more quickly to meet the changing needs of the community than conventional centralized generation and distribution systems—it will however offer many challenges as it disrupts well established planning structures and business models,” states panel member Wilfred Pinfold, CEO of Inc.

Transactive Energy and Smart Grid Implementation in San Diego

The state of California is a leader in implementing renewable energy resources. The city of San Diego is already implementing smart city energy programs as well as considering how to utilize transactive energy and the smart grid in reaching their smart city energy goals. An example of San Diego’s smart city energy program is how it is partnering with GE to upgrade street lights to reduce energy costs by 60 percent as well as transform them into a connected digital network that can optimize parking and traffic, enhance public safety and track air quality.[2]

Caldwell states, “Transactive energy and the smart grid will play a critical role in San Diego’s efforts to transition our grid to 100% renewable energy by 2035. In California, we are often curtailing renewable energy generation. Getting to 100% isn’t just about generating and purchasing more renewables, it’s equally important to use the existing power infrastructure more efficiently by enabling the utility to move power around congestion and better utilize distributed generation and energy storage. As we think about our pathway to 100%, we’re also starting to think about how we can use the grid and pricing policy to deliver real-time price signals to both consumers and generators of electricity. It’s this combination of a more capable grid and economics that will pave the way to our renewable future.”

Smart city projects are poised to become an important influencer of how the smart grid and city infrastructure and service systems interact. GWAC’s mission to create thought leadership focusing on the challenges and opportunities facing our power grid is supportive of greater dialog, encouraging cities to consider the interoperability and integration requirements for their energy and infrastructure related projects. The annual GWAC Transactive Energy Systems Conference will provide a platform for new ideas and discussion. For more information see:

— Linda Barney


Linda Barney is the founder and owner of Barney and Associates, a technical/marketing writing, training and web design firm in Beaverton, OR.

[1]                                 GridWise Architecture Council (GWAC), Transactive energy definition,

[2]                                 San Diego to Deploy World’s Largest City-Based ‘Internet of Things’ Platform Using Smart Streetlights, February 22, 2017,