ABSTRACT
This chapter explores how transactive energy (TE) markets for distributed energy resources (DERs) may be developed to enable trading in future short- and long-term settings. The ultimate aim of smart grid and TE is to provide a plug-and-play architecture that enables DERs, smart applications, software, and services to transact energy via an interactive, open-access platform. A general challenge with right-sized locational DERs is that each building and premise will have an idiosyncratic DER solution, that is, a specific package or mix of DER resources with a characteristic set of interactive effects. With relatively low load growth, increased use of DERs, and declining fossil prices, financial valuations of traditional fossil generation suggest further decline. An implication for TE may be the use of competitive procurements and bilateral contracts in lieu of auctions. As bilateral contracts can be customized, this will satisfy a number of specific market conditions, such as to provide specific packages of DERS at particular customer locations.
