With the decentralisation of the energy system with the growth of local generators, the obvious next step is the enablement of local trading options.
Currently there is a lot of activity around peer-to-peer trading based on a blockchain but this is still some way off widespread commercial application.
But peer-to-peer trading is starting to become available now. In the UK, energy company Open Utility has pioneered a concept for commercial customers ‘matching’ renewables buyers and sellers based on the current supply availability and demand from half-hourly smart meter data.
With Open Utility’s Piclo platform, businesses are optimally matched via proprietary matching algorithms to participating local suppliers or they may individually select others if for example, the buyer happens to prefer wind over solar or vice versa.
The concept was launched last year, following an earlier pilot, in partnership with the UK independent renewable company Good Energy under the name ‘Selectricity’.
Since then Open Utility has sealed deals to trial Piclo in two other countries – with wind energy operator ERG in Italy and innogy subsidiary Essent in the Netherlands.
The trial in Italy, which was instigated by ERG, involves some of the company’s generation assets and one existing business customer, who will use the online service for enhanced transparency and control of its energy supply and the ability to match with local wind and hydro generators.
In the Netherlands, the trial is being be offered under a new digital peer-to-peer brand named ‘Ellyn’, and gives local business customers access to solar and wind farms.
“Ellyn shows businesses that having solar energy in the night is not possible and that to create a decentral electricity market, still many more wind and solar parks are needed in the Netherlands,” says Essent’s Director Marketing Development, Stella Brenninkmeijer.
James Johnson, CEO of Open Utility, comments that peer-to-peer energy matching is emerging as an important pillar of the global transition to decentralised energy.
“In highly competitive energy markets like the Netherlands, transparency and choice are the key to success.”
The Dutch market is a pioneer in peer-to-peer activities with earlier initiatives launched by Vandebron and Vattenfall’s Powerpeers.
Lars Falch, Director of Powerpeers, says that much of the effort over the past year since its launch has focused on further developing the technologies. By the end of the year a pilot should be started outside Europe, with the Powerpeers technology under licence to a supplier.
A feature of these technologies is ‘transparency’ by identifying the renewables buyers and sellers to each other, which is one that appears to be appreciated.
Comments Agamemnon Otero, CEO of Repowering London, which has developed the UK’s first inner-city, community-owned renewable energy project, Brixton Energy of Piclo: “Our energy project in Brixton was one of the first schemes to use this new platform. We now know that the energy being generated by our solar panels is being matched with the Eden Project – something we would have never known before.”
The Eden Project is a sustainable garden initiative in Cornwall, in which various plant biomes of the world have been recreated. Befitting an organisation of its type, its goal is to become independent of fossil fuels, with plans including an onsite geothermal plant which also will supply the local community.
Location based charging
In the earlier interview with Engerati, Johnston said he envisages Piclo as a “stepping stone” towards the development of local energy systems.
A spin-off is the potential for location based grid charging. Knowing the locations of the generators and users, the length of the grid that is used to transport the electricity is known and the user could be charged on that basis, rather than as currently for the cost socialised across the whole grid.
A study is currently under way with Western Power Distribution investigating different charging models, which should be published later this year, Johnson says.
Another application is the development of flexibility. Open Utility has secured £412,500 funding from UK government’s Business, Energy and Industrial Strategy’s (BEIS) Energy Entrepreneurs Fund to develop an online marketplace for local electricity flexibility trading.
The marketplace will sit on the Piclo platform and is envisaged as key enabler for the UK distribution network operators (DNOs) to transition to distribution system operators (DSOs).
Several DNOs have already set out their DSO transition plans, among them UK Power Networks, which also in August launched tenders for customer flexibility in 10 areas covering 13,000 postcodes in London, East Anglia and the southeast.
Open Utility believes its solution can help DSOs interact with the long tail of flexibility providers to maximise participation in their tenders, which is crucial to guaranteeing benefits over traditional reinforcement. Tender processes need to become fully automated if they can eventually scale to cover the 1.7m postcode areas in the UK. They will also need to coordinate with the system operator, who needs to maintain overall control over national system balancing.
Open Utility’s solution utilises resource optimisation algorithms to manage this complexity and has interfaces to other interested parties like the system operator.
The company says it is speaking to a number of DSOs to join the trial later this year.
Open Utility also intends to run a consultation to ensure that the service fits the needs of the wide range of stakeholders of the flexibility community, such as demand response aggregators, battery manufacturers, energy suppliers, distributed generators, project developers, electric vehicle manufacturers and technology suppliers.
A 2016 study for Ofgem and BEIS from the Carbon Trust and Imperial College identified potential savings of flexibility in UK of up to £40bn by 2050.