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About TESS
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TESS stands for "Transactive Energy Services System". TESS is an electric utility planning and operations platform that supports the design, deployment, and operation of peer-to-peer trading would allow more efficient and resilient integration of distributed energy resources in an increasingly decarbonized bulk electric power system. Distributed energy resources can contribute to decarbonization, but the main benefits are lost unless the utility sustains financial performance, consumers are engaged and committed to participating in the long term, and the bulk electric power system maintains high reliability. TESS enables a whole-business life-cycle approach to transactive energy services that provides an end-to-end framework a majority of North American utilities can use to finance, design, deploy, and operate a distributed energy resource integration system to realize these three key performance objectives.
Transactive energy control systems were initially developed and demonstrated at Pacific Northwest National Laboratory under funding from the US Department Energy's Office of Electricity. TESS is a technology maturation effort funded by the US Department Energy's Office of Electricity and led by SLAC National Accelerator Laboratory. TESS projects are conducted in collaboration between national laboratories utilities, academia, and vendors. Multiple projects are expected to be operating concurrently as we endeavor to advance the technology readiness level of Transactive Energy system.
Climate change mitigation policies aimed at reducing the long-term costs of fossil-based electricity generation are driving the growth of renewable energy resources. An important consequence of the transition from fossil to renewable resources is that the marginal cost of energy is more often near zero. Low marginal cost energy has important consequences throughout the electric system and industry because it changes the assumptions on which existing markets and regulations operate. Low marginal cost energy diminishes the effectiveness of energy markets, particularly in regions where wind and solar have significant energy and capacity potential.
Extensive analysis has been dedicated to understanding the impact of increasing supply intermittency arising from growing use of renewable generation resources. Unpredicatable ramping durations and magnitudes have significant implications for energy market designs. But market mechanisms for scheduling and dispatching renewable resources in wholesale markets remain largely focused on discovery of the increasingly irrelevant marginal cost of energy, rather than the emerging marginal cost of ramping resources that support renewable energy resource integration. As more renewable resources enter the generation portfolio, market designs predicated upon coordination using market-clearing prices for energy will perform poorly because they do not take full account of all the different marginal costs involved in offering and dispatching units from distributed heterogeneous technologies. In particular, increasing distributed energy resources (DERs) shifts relative cost away from the marginal cost of energy, and toward the time cost of capacity, energy storage, and ramping resources needed to fulfill contractual commitments.
Changes in the electricity resource portfolio are causing changes in the relative values of different resource capabilities. Flexibility as a general capability has risen in relative importance with the growth in DERs and their heterogeneity. Examples of flexibility include dispatchability (can the resource be called on for energy or grid services?) and ramping rate (how quickly can the resource deliver energy or grid services?). Digital interconnection and automation increase the range of dispatchability in the resource portfolio, making more resources (including DERs) more flexible and thus more potentially valuable. The ramping rate, and particularly resources which can ramp quickly, increases flexibility by increasing the amount of DERs the distribution system can absorb. Fast-ramping resources have value because they can offset energy imbalances and provide both energy and grid services to maintain system balance. Moreover, some DER technologies are fast ramping. As DERs proliferate, electricity market designs will have to adjust to the increasing relative value of flexibility. The price may often be the marginal cost of ramping rather than the marginal cost of energy.
Despite market design challenges, the combination of environmental policy and falling production costs has driven a proliferation of distributed energy resources in electric power systems. Transactive energy is emerging as a fundamentally new market-based approach to coordinating electric energy delivery in systems with very high levels of DERs. Transactive energy combines technology and engineering with market design and economic principles. Autonomous device response to informative, emergent prices is the hallmark of transactive energy.
For more information, please read the TESS Whitepaper.
The TESS project is managed by the Grid Integration Systems and Mobility (GISMo) at SLAC National Accelerator Laboratory, which is operated by Stanford University for US Department of Energy under Contract DE-AC02-76SF00515.