Enabling resilient, low cost & localised electricity markets through blockchain P2P & VPP trading
- The project confirmed that energy trading was technically feasible and desired by customers. One participant remarked, “it’s the way forward” and after the end of the study, most said they wanted to continue that way of managing electricity.
- Price signals to match average supply and demand were present. Households seemed to be willing and able to shift their energy demands to reflect these price signals. One participant said “It gave me an incentive to move power consumption away from peak periods”.
- In households that had 10 and 15 kWh batteries, and where there was a VPP in place, payback times for batteries would be less than 6 years. Participants said they were 3 times more likely to buy a battery if they could participate in a VPP.
- An uptake in 10 and 15 kWh batteries to 50% market penetration would enable a district to become 68% energy autonomous. That means only 32% of their energy would be sourced via high voltage transmission networks. Such a reduction could spell significant network savings in the future.
- Many households originally bought their solar panels because of feed in tariffs provided by the taxpayer. Energy trading could substitute these tariffs for a real-world revenue stream, for a higher, if less regular amount.
- The research strongly suggested that such energy trading could help stabilize the grid without any tariff interventions of any kind at all.
Perth, Australia – 18 June, 2020: Power Ledger’s blockchain solar energy trading trial that lets households set their own electricity prices has found the technology is technically feasible, is viewed positively by participants and can lead to localised energy autonomy in a big boost for peer-to-peer systems globally.
The trial, funded in part by the Australian Government, ran between December 2018 and January 2020 as part of the RENeW Nexus Project and involved using Power Ledger’s blockchain technology to track the transactions of rooftop solar energy traded between 48 households in Fremantle, Western Australia.
The project also includes a study of a distributed Virtual Power Plant (VPP) as well as a microgrid with a 670kWh battery that will service homes within the East Village development in Fremantle.
“This project is a world first with great significance for how cities around the world can learn to share solar,” report co-author Professor Peter Newman said.
A report into the project prepared by Power Ledger, Curtin and Murdoch Universities found peer-to-peer (P2P) energy trading was technically feasible and supported by participants.
The report also found the potential for VPPs to give battery owners access to additional revenue streams, adding it could increase localised energy autonomy by between 30% and 68% whilst delivering more cost effective network outcomes than traditional means of upgrading and maintaining the grid.
The RENeW Nexus project was conceived to understand the potential of localised energy markets and how technology can facilitate better outcomes for the energy system.
“Power Ledger has demonstrated how peer-to-peer energy trading can incentivise the right outcomes for the grid in a more cost-effective way,” said report co-author and Power Ledger Chairman Dr Jemma Green.
Using the existing electricity network and working with the local energy retailer, Power Ledger’s platform enabled households to buy and sell excess rooftop solar energy in near real-time, with residents able to view electricity usage in 30 minute intervals.
However, the report noted that under the current electricity tariff structure in Western Australia, some participants’ financial outcomes were largely dependent on their daily energy consumption rather than trading volume.
“Participants had a positive view of P2P energy trading and could see its benefits but stated that changes to the tariff structure would be required to make it attractive,” the report found.
It recommended P2P coupled with a dynamic feed-in tariff as a way to deal with excess solar during the day without the need for government subsidies.
The report also said policymakers should consider coupling P2P with the ability for households with batteries to trade via a VPP “to monetise their excess solar at all times of the day, without any subsidy, and also provide services to the grid”.
“If governments around the world are serious about incorporating renewable energy into their future energy planning then it needs to be price-competitive,” said Dr Green.
“For markets that have or are retiring their feed-in tariffs, P2P and VPP trading market mechanisms can replace FiT income for households and at the same time facilitate a more stable grid, dealing with the grid problems that renewables can cause.”
Dr Green added: “P2P and VPP trading is a viable alternative to curtailing the output of renewables, or needing more subsidies to encourage the consumption of excess solar during the day.”
The RENeW Nexus Project made five key recommendations including that network operators provide better metering infrastructure to collect and communicate data to third parties as well as a live trial of a localised energy community to be conducted in the South West Interconnected System (SWIS) to provide further insights into solar energy trading.
The findings and full report can be found here.
RENeW Nexus and the new energy world
You can watch Dr Green and Power Ledger Head of Business Development and Sales Vinod Tiwari discuss the RENeW Nexus report during their live webinar held on July 23.