By financial Express
A Perth startup will begin trials of consumer-to-consumer electricity trading this month using Blockchain technology – a small but potentially seismic step towards a future energy system.
Perth company Power Ledger has teamed up with Ledger Assets – Australia’s largest blockchain company – to conduct trials aimed at devising business models for peer-to-peer energy trading.
This could cut out the middleman – the energy retailer – and help households and firms get more out of their rooftop solar panels and storagebatteries. People without solar panels could also buy solar power cheaply from neighbours.
Power Ledger combines the revolution in decentralised renewable energy and batteries with blockchain to develop business models for a future energy system in which consumers can further reduce their dependence on an energy retailer.
It could also help smooth out the troublesome surges and troughs in renewable generation – seen already in South Australia – by making the most of solar panels and batteries in households to better manage demand and supply.
War for excess power
“There’s a war on for who will get the surplus electricity from solar panels. Will it be batteries behind the meter or will you be able to trade your surplus electricity with your neighbour? And for retailers, how do you participate in the new energy market?” said Power Ledger chairwoman Jemma Green.
But Ms Green warned that regulators haven’t caught up with developments in such “behind the meter” services in the National Electricity Market. The NEM of the future shape will be debated at a meeting of federal and state energy ministers this Friday.
Blockchain is the technology behind the virtual currency bitcoin. It provides a secure “distributed ledger” for verifying the creation, transfer and payments in respect of any asset, via 7000 trusted “nodes” or computers around the world.
Currently solar households can either sell surplus power to their energy retailer for about 6 cents a kilowatt hour on a typical feed-in tariff, store it in a battery or waste it (unless they are still on a more generous legacy tariff). But when they are short they have to buy power from the grid at a retail tariff of about 25 cents KWh.
Peer-to-peer trading would let them trade their surplus power to each other at a price that splits the difference. They would still pay a fee to an energy retailer for using the network to transfer the power, but the retailer wouldn’t make such a fat profit on the electricity itself.
Two years before batteries take over
Energy companies, worried about the decline of the electricity grid, are looking to services such as peer-to-peer trading to cash in on the rise of solar and wind power instead of fighting it.
Ms Green, a former investment banker now working on clean energy at Curtin University, said traditional energy companies have a window of about two years to establish new business models before cheaper batteries further erode their market share. “It’s remarkable how receptive they are,” she said.
The first trial in Busselton, in Western Australia’s southwest, will be a virtual one of 15 to 20 households – some with solar panels and some not – in a National Lifestyle Villages retirement facility. The Power Ledger system will verify, record and settle transactions virtually, in parallel to the energy retailer.
A second trial in Fremantle will have about 80 households – including some with storage batteries – trading electricity across the network and settling transactions using Power Ledger’s system. This trial – backed by Landcorp and retailer Synergy – is scheduled for the first half of next year.
Power Ledger is also talking to an electricity distributor in Victoria about a larger and more complex trial in Victoria involving large scale renewable generation – such as a wind farm or large solar system.