  Increased penetration of Distributed Energy Resources (DER) and Renewable
Energy Systems (RES) transforming the conventional distribution grid into a
transactive framework supervised by a distribution system operator (DSO).
Although the emerging transactive energy management techniques improve the grid
reliability, the inherent uncertainty of RES poses a challenge in meeting the
power demand of the critical infrastructure in the microgrid unless sufficient
battery energy storage is maintained. However, maintaining expensive battery
storage increases the operating cost of the DSO. In this article, we propose a
cost-effective dynamic resource allocation strategy to optimize the battery
reserve requirement while ensuring the critical demand is met with a provable
guarantee. Our proposed scheme enables the DSO to optimize the RES and battery
reserve allocation to eliminate the risk of over or underproduction. We present
numerical simulations under three different scenarios of multiple microgrids
with uncertain renewable generation. The simulation results demonstrate the
efficacy of the proposed transactive stochastic control algorithm.
