Peer-to-peer energy trading – building energy communities

Transactive energy in communities is growing both on and off the blockchain.
Published: Mon 28 May 2018

The emergence of peer-to-peer (P2P) electricity trading is a key impact area of transactive energy being a natural spin-off in a decentralised market, ultimately emulating the wholesale market activity of the power system on a local scale.

The principle is straightforward, but the implementation is less so as few people will have the time or inclination to personally conduct real-time trading. Hence the emergence of platforms that automate the process, such as Open Utility’s Piclo in the UK, and Vandebron and Powerpeers in the Netherlands.

The blockchain is proving particularly fertile for peer-to-peer trading initiatives following the pioneering developments on opposite sides of the world by LO3 Energy in the Brooklyn Microgrid in New York and Power Ledger in Australia.

Subsequently LO3 Energy has broadened its transactive energy activities with among others, the development of solutions with Europe’s EPEX SPOT power exchange and the launch of a micro energy hedging platform with Centrica subsidiary Direct Energy in Texas. And Power Ledger is launching its first commercial peer-to-peer offering with the energy business Greenwood Solutions in Melbourne.

Commenting on the Texas project, Michael D’Aurizio, Investment Manager, Ventures for Centrica Innovations, which has invested in LO3 Energy, says: “Having a data architecture blockchain makes more sense in this environment than a traditional command and control structure. The reason is security, transparency and ease of access.”

Blockchain trading in London

While Open Utility has spearheaded P2P activity in the UK with its algorithm-based platform, the first into the market with a blockchain platform is the startup Verv.

Verv’s initial activities have been around the development of an artificial intelligence-based solution that disaggregates energy usage in homes to the appliance level via a plug-and-play ‘smart hub ’. Users can then use this information to adjust their consumption patterns.

In the next phase this technology is being incorporated at the centre of a home energy transactive system. This will couple the user energy profile that the AI provides to local solar PV and storage to forecast in real time the supply availability and demand requirements and to buy or sell any surpluses at the best prices.

In partnership with the community energy programme developer Repowering London, the platform is now being demonstrated at a housing estate in Hackney. Solar panels are installed on 13 of the blocks of flats that make up the east London community. Coupled with the addition of Verv’s smart hubs in participating residents’ flats, and storage batteries in communal areas, the platform is able to calculate the energy demand profile of homes, determine the solar energy supply in each battery and in turn allocate green power to residents based on their needs.

“We’re looking to create a flexible microgrid structure and minimise dependency on the grid at a macro level, reducing energy costs and increasing low carbon energy consumption,” says Verv CEO Peter Davies.

The first trade saw just 1kWh of electricity transacted from a solar-panel array in one section of the estate to a resident in another but the full project, which is supported with funding from Innovate UK, will run for 12 months.

An aim of the trial is to demonstrate the potential of the platform and concept to reducing energy bills. As many of the residents are on prepay metering, which is generally costlier than post-pay in the UK, such savings should be the more significant.

Other partners in the project are local energy advocacy group Hackney Energy and the UK storage company Powervault, which is providing the batteries.

Energy trading communities

Davies adds that the plan is “to use the results of this trial to roll out more energy trading communities across the UK and in turn globally.”

For existing Verv users, the energy trading solution can be added via a software update. According to Verv’s white paper, the estimated saving for users of its smart hub is approximately £50 per annum while owners of 4kW solar microgeneration units could earn an additional £40-70 p.a.

Stated benefits for retailers include bad debt reduction and real-time billing reconciliation, while distribution operators should benefit from condition monitoring and predictive maintenance opportunities and capacity, balancing and other grid services.

Longer term, potential use cases that Verv envisages could be added to its platform include an electric vehicle charging payment solution, microgrid balancing and monitoring, and carbon accounting services. A Verv hub is also under development for the US and other 110V markets.