A Tale of Two Visions: Designing a Decentralized Transactive Electric System

Conversations about distributed resources, the transactive grid, and the future of the electric industry abound with terms like decentralized, disruptive, distribution system operator, and distribution marginal pricing. In this time of rapid and dramatic change, it is tempting to jump right to the sexy market design, utility business model, and rate-making and regulatory framework issues and assume that the mundane operational realm where the laws of physics apply will sort itself out. As a result, it is not surprising that most industry futurists have not noticed the emergence of two clearly distinct visions or paradigms for how a decentralized, transactive electric system with high penetration of distributed energy resources (DERs) could be designed to operate.