Review of Transactive Energy Market Models and Their Possible Financial Impact on The Utility

Abstract

Many utilities have developed Transactive Energy (TE) market models. The TE market models offer small energy producers a framework to compete and gain more value from participating in the market. The utility also gains benefits from the TE market models. On the other hand, the utility is financially affected by the TE model in the form of sales reduction, forcing the grid to raise its tariffs and hence obtain fewer sales. Eventually, the grid may experience a death spiral. This paper reviews the different TE market model architectures, trading models, and clearing mechanisms. The paper also shows the possible impact of the market models on the utility with examples of utilities that experienced the death spiral and the corrective actions taken to face it. The paper provides a taxonomy for publications considering TE market models in the past three years.