Transactive Energy–The New Era of Development in Power Distribution System

  • Ramanand Thang Vinesh


The inception of ‘Smart Grid’ concept along with the concurrent escalation in renewable energy sources marked the beginning of modern power systems. This instigated a need for reform in the vertically integrated power system structure because renewables are being integrated at many corners of the structure, partly collapsing the boundaries of generation, transmission, and distribution. In line with this evolution of power systems hierarchy, the inability of traditional practices to accommodate these changes served as an inciting cause to look for novel approaches of solving the supply-demand balance crisis of the present and the future. It is at this point, the concept of transactive energy is introduced, which makes up for the disadvantages of traditional methods. It explores different aspects of microeconomics in solving the present and future grid problems by including consumers into the equation of supply-demand. By creating a platform for power transactions between consumers and generators based on value, it optimizes multiple objectives of the grid, keeping security and reliability in check. Moreover, it makes allowance for different entities of distribution system such as DERs, electric vehicles and smart loads to take part in the process thereby contributing collectively to the fulfillment of objectives. This paper reviews the history of transactive energy concept in depth, its characteristics and principles instill the confidence to further analyze its scope in present and future power distribution system. Various microeconomics concepts are discussed in conjunction with various pilot projects that are already implemented on a smaller scale. Also, a comparison of traditional methods and transactive energy is showcased so as to highlight its advantages in this modern era of the power systems.

How to Cite
Vinesh, R. T. (2020). Transactive Energy–The New Era of Development in Power Distribution System. International Journal of Advanced Science and Technology, 29(1), 1334 - 1343. Retrieved from