With cutting-edge technology for the energy sector being developed at a faster pace than ever, it is easy to forget that equal access to energy is still very much an issue.
Applications such as smart cities, smart meters, electric vehicle infrastructure are often only available to those who can afford them. While they are more widespread and advanced in countries in Europe, for example, an estimated 1.2 billion people all over the world have little to no access to energy, according to the International Energy Agency.
There could be a viable answer to the problem of democratising energy access: a decentralised system of energy distribution on local energy communities. This is what the founders of Netherlands-based Energy Bazaar had in mind when they launched their proposal. The non-profit organisation seeks to bring energy to local communities in developing countries, such as India, through a decentralised energy sharing platform.
Rhythima Shinde, Co-founder of Energy Bazaar, explains how the idea came to life: “We met this farmer in India who had solar panels, and who was using solar energy just for irrigation purposes. The rest of the time the solar panels were just lying around.
“We asked him if he would like to share this energy and he was very excited about it. His question was ‘will I make money out of it?’ which we already saw as an incentive for people to participate, and also a good way to optimise energy usage. That’s how the idea came up about having a truly decentralised platform of energy sharing.”
Energy Bazaar seeks to help power households with little or no access to electricity with excess energy produced by their neighbours. The organisation works as a solutions and service provider for the public-private partnership, facilitating discussions between the academic, industrial and governmental sectors. The ultimate goal is to enable energy access and renewable energy generation through decentralised, local energy sharing.
Energy Bazaar works on three pillars to achieve its mission: increase energy access, democratise energy ownership, and maintain sustainable innovation and development. The company aims to help develop a trading platform through blockchain technology, in which anyone can join to sell or buy energy to community peers.
The organisation will help provide energy ownership to community members, which can be done by making it possible for everybody to trade their generated energy on the platform using smart-meters.
However, enabling peer-to-peer (P2P) trading only begins to describe what they do. “P2P trading is an umbrella term for what we do,” says Shinde.
“I would rather say that the unique proposition of Energy Bazaar is to have a transactive, optimised and inclusive microgrid. In a microgrid itself there is still a hierarchy to control the money flow in the energy distribution to regulate it, and we eliminate that feature. We control the charging and discharging behaviour of the energy storage system, so we optimise the system.
“Our solution provides a grid that optimises the battery storage and the economic incentives. In simple words, a prosumer not only gets an optimised price as per the market prices (current and predicted), but also ensures that the battery storage is optimised. This is a large issue in today’s microgrids in India, where the regulators are not able to optimise the multiple distributed sources with the economical benefits.”
The developing country market can bring unique opportunities. The energy market in a country or region can be an important enabler to make such transformative projects happen. Shinde comments that the current scenario in India is particularly receptive to projects in this area. With the Indian government investing in multiple smart city projects and enabling energy access for all of its population, several startups and projects have surfaced to offer solutions in renewable energy integration, energy access, energy trading, and others.
“The energy market in India is very dynamic right now. It’s changing fast with faster developments like 100% electrification of villages (but not households), so the regulations around the electrification of households are also changing very fast. The purpose of the government of India is to increase energy access, because that means every village at least has access to the grid,”says Shinde.
Social dynamics in energy communities
Integrating social dynamics into their algorithms is one of the main differentials of Energy Bazaar, says Shinde. Transactive energy platforms should consider that energy pricing and the energy distribution can still be controlled by the individual energy seller, which means that energy producers would have a social advantage in their community and the possibility to overcharge at will.
“What we have seen so far is that it is highly controlled by the people providing the energy,” comments Shinde. If a village has a microgrid that enables local energy transaction, for instance, “the microgrid market is privatised, which means it’s a very localised market, so it’s subject to a local monopoly. People can charge as much as they wish.
“The aspect of transactive grid comes with the transaction of “energy currency” on blockchain. We’re working with social scientists and designers from TU Delft to define pricing mechanisms where people do not just trade money, but also maybe goods and services. That’s the beauty of blockchain - you can put anything in it. This is an important aspect because in a truly rural decentralised market, the lack of availability of actual money can be a constraint for trade. People can use a form of barter system right on the platform we provide.
“That’s one part of the solution, but for setting the price we are still trying to figure out how people set prices in local economies so we can give the power to the producers.”
How utilities can participate
Demystifying the notion that such projects are parallel to utility services, and that main energy sector players have no part to play, Shinde says that partnerships with utilities are a vital element to make the project work. “Utilities still have a lot of infrastructure all over cities and big villages,” she points out.
“That’s the whole point of Energy Bazaar, we don’t want to restrict ourselves to off-grid and small-scale solutions, but we also want to look into the wider market. This project can really be a collaboration where their infrastructure and our platform can be used together to deploy these solutions to different places.”
This can be especially valuable to enable democratised energy distribution in cities, for example, where energy access is still a visible marker of social inequalities. In some of India’s largest cities, Shinde exemplifies, there are areas where residents still rely on stolen energy within miles of other areas where modern and reliable technologies are commonplace.
“That’s why we’re not focusing only on local markets, but also maybe in city areas where utilities already have the infrastructure and are well-established. There is a huge opportunity to use these solutions in places like these and utilities can participate.”
Lessons from Engerati Meets
Will all of these concepts to be presented at Engerati Meets, Shinde says that it will be a great opportunity to showcase their vision of a more decentralised, sustainable, and socially equitable future.
“The most important point for Energy Bazaar is that it’s really good to see that so many projects are coming up in blockchain and transactive energy. There are some benefits of the top-down system, such as when there is a controller or a regulator, the security of the systems is much easier. At the same time, transparency is lacking with regulators, and this is what we believe these transparent distributed system can help in creating. Thus, we need to reach an optimal trade-off and collaboration with the current existing regulated grids. ,” she points out.
“Also, when you are truly decentralising the system, people are going to be more powerful. They are going to try to introduce malicious activities but at the same time try to profit and improve their own well-being. This needs to be taken care of, and we really need to understand the social dynamics behind people before just hopping on to the technology.”
“The next important thing is that we’re all aware of the problems with decentralisation, if everybody starts using solar power or different types of renewable energy, the issues like duck curve become quite severe. Ramping up and down of a distributed system is not easy in case of emergencies, and scaling up with hardware integrations also pose quite a challenge in itself. We need to be careful and understand the impact of what we are going to produce.”
And the message they expect to get themselves? “I really expect to meet people and learn about energy exchange and their challenges, because we are just going to start our pilot and I really want to understand the technical problems that they might have faced. We do have experience on the software side, but we really want to hear more about the hardware integration side.”