Transmitting electricity to a specific customer in a smart grid
It doesn't track specific electricity.

Basically buyers and sellers have meters; in a "smart" grid these have a somewhat realtime data connection back to the grid operator / market maker. They declare a "spot" price, which is applied to energy going in and out.

Edit:


Transmission is continuous: seller injects electricity, buyer takes electricity at the same time. It's not packetised like internet or circuit switched like phones.
The parties can deal directly (depending on market regulation) but are dependent on the grid for transmission.
Correct.


(For a lot more detail on the market, have a read of http://www.uea.ac.uk/~e680/energy/energy_links/electricity/Dundee_paper_comparison_pool_bilateral_trading.pdf )