Transactive energy and utilities - where is the value?

Utilities are starting to play in the transactive energy space, but how will it shape their business models?
Published: Fri 09 Feb 2018

Transactive energy represents the convergence of decentralisation, distributed micro generation, virtual power plants, and demand management.

It has the potential to revolutionise the energy retail market, but it could also be the golden bullet for the network operators faced with the practical and bottom line challenges of market facilitation, grid defection, and network volatility.

Ultimately transactive energy needs to provide value to all the players. The value to buyer and seller is obvious, but what about the respective utility participants? In an article in February’s Engerati Quarterly, a digest of analyses and insights from the utility industry, we inspect different European utilities’ perspectives on how to utilise transactive energy and shape their respective business models around it.


Blockchain technology and cryptocurrencies

An essential piece in this discussion is how to properly implement transactive energy infrastructure. There is a varied array of technologies and assets that utilities could use for this end.

With its decentralised characteristics and the push to test use cases, blockchain is emerging as a favourite. “We view blockchain as the most efficient and secure communication protocol for exposing grid edge data,” says Scott Kessler, Business Development Manager at LO3 Energy, a blockchain-based energy tech company. However, he doesn’t envisage the blockchain as a payment solution in the short term.

“We don’t see lots of people suddenly switching to cryptocurrencies for payments. The critical piece in moving towards the decentralised grid isn’t payment, so it makes no sense to design a solution around that and people should continue to pay their bills as they always have done.”

What is clear from this overview is that the move towards transactive energy is well under way, and the pioneering companies are defining the direction and how the value can be realised from what will be a huge market opportunity. Competition is key to success, but so is cooperation to ensure the continued health of all levels of the energy system.

To find out more about opportunities in transactive energy and explore our analyses on further topics, access Engerati Quarterly.