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What is a LEM?

LEM or a Local Energy Market is an arrangement where a group of residents who own solar and perhaps wind or batteries, club together to exchange power, when and where they need it. These Prosumers set their own prices, or rather their proxy machines do and trade with each other on a micro-transaction basis. For further details read this article <LEMs: What the devil use are they? | Energy Central>

What is a prosumer?

Prosumers are the consumers who have batteries and/or generation sources like solar PV.

What is V2X, can LEMs help?

V2X means vehicle-to-everything. It could be vehicle-to-building (V2B), vehicle-to-home (V2H),  and vehicle-to-grid (V2G) services. When parked, the batteries in the electric vehicles can be smartly charged or discharged to support the home, building or grid. A decentralised system like LEM is vital to the sustainability of V2X. For further details please read <EV article>

What is the difference between a LEM and P2P (Peer to Peer Trading)?

LEM is the marketplace where the peers (prosumers, consumers and other actors) negotiate and do their trading.

I am a retailer why should I look at LEM or P2P trading?

LEMs can ensure that retailers' margins remain unaffected. Your customers will also see that you are forward-thinking and will be attracted to you. You will also save in your customer attraction cost.

Can LEM accommodate dynamic limits like Dynamic operating envelope (DOE) and Shaped Operating Envelop (SOE) or results of hosting capacity?

LEMs are designed to trade within the grid defined dynamic limits like DOEs, SOEs etc. In fact, LEMs can expand these envelopes. Take a look at Powerledger's LEM offering <Local energy market>

There are VPPs. Why do I need LEM?

VPPs typically bid in the wholesale market. LEMs are local. The local controller can prioritise what is the best bang for a buck - participating in a LEM or in a wholesale market. They both can work in parallel.

Microgrids were the latest trend, we are thinking about them. And now LEM. Why?

The use cases of microgrid and LEM are totally different. Microgrid typically focuses on switching, balancing, islanding and resynchronization. LEMs are marketplaces for P2P trading. Think microgrid control as layer 1. LEMs are layer 2.

If LEMs are layer 2, is wholesale market Layer 3?

Right now it is. But not for a long time. The DSOs need to run (or have a third-party run) a marketplace to procure flexibilities. Powerledger has a product for that MODE FLEX <MODE Flex>

I want to learn more about P2P, LEM and marketplace for procuring flexibilities, what should I do?

Contact us at <Contact>

Does a LEM offer "flexibilities"?

A LEM operates 24/7, 365 days in contrast to flexibilities that is requested for specific periods of time for defined quantum of active and reactive power,  at specific locations in the grid.

How does a LEM help a Distribution utility?

Firstly, it helps to reduce grid exports and imports. This eases the strain on the primary equipment such as transformers and cables and overhead lines. By doing so, the management of assets is improved and capital expenses towards refurbishment / retrofitting or augmenting the network can be deferred or in some cases even avoided. Secondly, multiple LEMs supports the operation of a minimum number of synchronous machines, thereby solving the problem of minimum demand during peak penetration during low load time durations.

Can a LEM work without battery systems?

Yes, it can. However, in this case, only participants are benefitted and that too only partially. the fullest potential in a LEM is with battery storage which benefits the distribution utility as well.

What is a typical size of a LEM?

A Trial LEM would function well and display good results with about 150 participants, out of which at least 25 prosumers should have moderately sized battery systems of about 3.3kW / 12kWh and solar PV of about 6kW rating.

Does a LEM create obstacles to the retailer's relationship with customers?

Not at all. A LEM interfaces with the retailer's billing systems and a customers get electricity bills just as before with some additional rows indicating the traded energy  between participants and the reduction in the bills.