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Transactive Energy

An introduction to Transactive Energy

Watch: Stephen Cook, Associate Director, Arup

The installation of smart sensors, and the creation of a real time system to handle information on energy costs and demand, has drastically altered the ways suppliers and consumers interact.

The new Transactive Energy system has created a network of "prosumers" who trade money, data and power in real time. Businesses, citizens and even transport networks can all generate as well as consume power, enabling income to be earned from the system.

Transactive Energy supports rapidly growing cities by improving grid capacity and reliability, whilst ending the traditional relationship between suppliers and consumers.

New technology allows for a multi-directional, data-driven market where the lines between producer, distributer, and consumer are blurred.

The creation of this new energy network will promote:

Reliability - Local energy requirements can be handled in real time ensuring efficient delivery of electricity.

Sustainability - The system allows for incremental improvements meaning the network can be modernised.

Affordability - The real time energy market creates a network of "prosumers" with the ability to consume and produce energy. Customers will be able to buy and sell energy with real time price information in mind.

Hansung City in Qingdao commissioned Arup to apply a first of its kind Micro Energy Grid concept.

The proposed technology is forecast to create carbon savings of up to 25%.

Read more about this project by clicking below.

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Integrated Energy Planning

The efficiency of energy planning

Watch: Stephen Cook, Associate Director, Arup

The integrated planning of energy in cities delivers greater efficiency in the way energy is used. Green facades drive down the temperature and improve the quality of air while increasing the happiness of residents. The capturing of waste heat from cooling systems, from a supermarket for example, and redistributing it to a nearby residential building saves money and reduces waste. The use of natural water sources for cooling saves money and increases sustainability.

Integrated planning leads to a greener, more economic and therefore more successful city.

Arup has a long history of helping cities integrate their energy planning. Read our case study on the district cooling system we developed in Kai Tak, Hong Kong, that uses seawater to reduce the reliance on air conditioning units in commercial buildings.

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Financing Energy Action

Financing new energy projects

Watch: Filippo Gaddo, Head of Energy Economics, Arup

Funding new energy projects in cities is a constant challenge for municipal organisations. Despite challenges, cities are investing significant budget in low carbon projects as they are clearly able to demonstrate ROI.

In order to fund projects, cities can look at six key funding techniques:

1. Energy Performance Contracting
2. Property Tax Approaches
3. Green Bonds and Capital Markets
4. Secondary Markets
5. Crowdfunding
6. Public Private Partnerships

Explore other ways cities and businesses are tackling urban energy challenges. Download our Innovations in Energy Paper.

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Transactive Energy

A quick guide to microgrids

A microgrid is a controlled, local energy system with three key components:
•  Generation
•  Storage
•  Demand

Generation - can come from a range of distributed energy resource (DER's) helps to reduce the reliance on fossil fuel generators.

Storage - includes batteries, electric vehicles and liquid air amongst others.

Demand - microgrids allow users to select the most cost effective system balance. Surplus energy can be drawn from storage meaning energy is: reliable, affordable and sustainable.

Microgrids also play a vital function in supporting companies and operational facilities who rely on uninterrupted energy supply. Microgrids also take the strain of traditional energy grids whose energy supplies can potentially be disrupted.

Financial organisations, data centres and emergency services are all dependent on having energy infrastructure that is reliable and can adapt to changes in energy demand.

The animation shows how generation, storage and demand all combine to create a network which is adaptive to both supply and load. As a result, ICT, data, telecoms, and electrical equipment will function without interruption.

Discover more about microgrids by reading our five minute guide.

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Transactive Energy

Investing in integrated heat networks

Heat networks use systems of insulated pipes to take heat from central sources and deliver it around the city.

Heat networks can accommodate a wide number of heat inputs from different locations and a variety of sources (solar, biomass, geothermal), making it a reliable and low-carbon alternative to traditional energy systems.

Explore other ways cities and businesses are tackling urban energy challenges. Download our Innovations in Energy Paper.

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The hydrogen economy

Hydrogen cells in the city

Watch: Filippo Gaddo, Head of Energy Economics, Arup

For buses and HGVs, hydrogen’s range and rapid refuelling capability offer advantages over liquid fuels in urban and intra-urban contexts.

Thanks to advances in technology, the scope for storing hydrogen more efficiently at high pressure is rapidly improving. The use of offshore photovoltaic and photoelectrochemical energy is also helping to drive down the cost of producing storable hydrogen.

Researchers are focusing more and more on how to reduce the amount of rare materials needed for a hydrogen cell’s catalyst layer, which is the most expensive part of the production process.

Another technique is to use excess generated energy to produce hydrogen for storage as usable electricity, or to inject into the natural gas network to avoid supply-demand imbalances.

Hydrogen offers the potential for commercial and residential buildings to achieve a zero-carbon status. It also has the ability to store surplus energy generated by renewable means such as photovoltaic or wind power. This excess energy is then used later on or sold elsewhere on the network as a way of paying off the initial setup costs.

Arup designed the fundamental mechanical and electrical services for The Hydrogen Office in Yorkshire. The Hydrogen Office produces hydrogen and has storage for fuel cells and local hydrogen vehicles.

Find out more about the Environmental Energy Technology Centre case study below.

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City Action Groups

Tackling energy challenges together

Watch: Stephen Cook, Associate Director, Arup

Stephen Cook, Associate Director at Arup in the Energy and Climate Change Consulting team explains why sharing information between cities benefits everyone.

Urbanisation has become a major global trend; more than half the world’s population now lives in a city. This shift however, has brought with it a variety of common issues.

Groups like the 100 Resilient Cities and C40 are improving the way cities and megacities share ideas and best practices to tackle problems caused by issues like climate change, urbanisation and population growth.

The world’s cities have more to gain from sharing their knowledge than from keeping it private, despite often being competitors to each other.

Waterfront Toronto has a 25-year mandate to transform 800 hectares (2,000 acres) of brownfield lands on the waterfront into sustainable mixed-use communities and dynamic public spaces.

Arup was commissioned to undertake a comprehensive carbon and energy study to understand how the development can achieve a reduction in carbon emissions to meet its target.

Follow the link below to discover how we helped Toronto create a strategy for reaching an 80% reduction in carbon emissions by 2050.

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Financing Energy Action

The Energy Trilemma

Watch: Filippo Gaddo, Head of Energy Economics, Arup

The Energy Trilemma is a well-known challenge in funding energy change. The three elements that go into the Trilemma are:

1. Achieving lower carbon emissions to improve sustainability
2. Ensuring the future reliability of the system
3. Safeguarding long-term affordability

Cities and businesses are tackling the Trilemma through innovating in areas such as integrated energy planning, cooling systems, financing schemes and microgrids, to name a few.

Explore other ways cities and businesses are tackling urban energy challenges. Download our Innovations in Energy Paper.

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Hydrogen cells

Hydrogen cells


Power flow

Monetary flow




The Energy

Wind power

Solar power

Regular power supply



Public private

Banks and


Solar energy

Powerplant energy

Residential solar
energy producers


Residential block


Geothermal well

Central thermal storage

Water source

Commercial and

Virtual market

City hall

Powelar plant



66% of the world’s population will live in cities by 2050. With a range of new technologies, we help cities and businesses confront the energy challenges of increasing urbanisation whilst quickly achieving a return on investment.

Explore our interactive map which demonstrates
the innovations that are reshaping the city’s relationship to energy.