Power Ledger’s Dr Jemma Green sees conditions firming for an Australian energy market that will accommodate large proportions of renewables, create income for distributed energy resource (DER) owners and facilitate stability in the grid.
The Fifth Estate spoke to Green in the wake of the energy trading platform’s announcement that it is undertaking a live peer-to peer solar trading project in Delhi with major Indian power utility Tata Power-DDL. The project is backed by the India Smart Grid Forum, a public-private partnership that works to accelerate the development of smart grid technologies in the Indian power sector.
Using Power Ledger’s blockchain-based technology that enables end-to-end energy trading, 140 sites in Delhi will trade solar power from 2MW of solar PV systems. Some participants will be trading their excess solar while others will purchase the renewable energy.
Power Ledger works with the energy retailer to make near-to-real-time, fully-accountable deals possible. The pioneering project in Delhi will test trading logics and inform regulatory recommendations for the market in India.
Green, Power Ledger’s cofounder and chairman, says the company has about 20 projects in 10 countries across the globe and each is shaped by the local regulatory settings and energy market.
“Here in Australia, because we have such a high penetration of solar, it means the demand is high – solar owners want more control over their electricity,” she says.
“The subsidies are tapering off, the prices are coming down, and electric vehicles are coming on. So, people are looking for innovation. Market conditions here are causing demand.”
Australia has over 2.66 million photo voltaic installations in Australia, with a combined capacity of over 20.2 gigawatts. But solar PV owners are seeing income from solar feed-in tariffs disappear as these are phased out, and some are having their excess solar exports curtailed to avoid the grid instability that renewables can cause.
Peer to Peer (P2P) trading gives owners of distributed energy assets like solar systems, EVs and batteries the ability to replace this lost income by selling their excess electricity at a higher price than the retailer will pay for it. And energy consumers can buy solar power cheaper than they would from a retailer.
Green is also enthusiastic about the potential of P2P and Virtual Power Plant trading to facilitate a more stable grid.
She points to a November 2020 AEMC rule change that directs the electricity networks on the National Electricity Market to investigate the cost effectiveness of flexibility alternatives compared to traditional upgrades, when spending $5 million or more.
“Once you get between 20-50 per cent renewable penetration you get problems with voltage and reactive power. Instead of the traditional ways of stabilising the grid, such as investing in capacitors, substations, transformers – which are all very expensive – assets like rooftop solar, electric vehicles, charging stations, and household batteries can be harnessed through market mechanisms to create flexibility.
“If you can control the DERs to stem dispatch, curtail output or shift load consumption – then you can use the DERs that cause the problem to solve the problem.”
P2P trading can be used to create localised energy markets
“P2P trading is a type of load shifting activity,” Green says. “The network can put in a price signal to encourage local consumption of rooftop solar and avoid reverse flows that create the ‘duck curve’.”
A local energy market price signal with P2P can also help with managing capacity constraints and peak demand.
Green uses the example of a major Australian shopping mall developer her company is currently working with. “We are looking into how they can put solar and batteries into the malls to do grid stabilisation.”
This might be through batteries soaking up excess solar power to avoid congestion in the local grid, EV charging stations selling that solar power, or perhaps controlling the HVAC system to reduce demand in peak periods.
These activities create flexibility in the system to handle demand and supply and can provide new revenue streams for the asset owner.
COAG’s ambition to transition to a two-sided market in 2025 is another significant shift. A two sided market allows owners of DERs (distributed energy systems) such as solar systems, batteries and EVs to interact directly with all electricity consumers.
According to an Energy Security Board discussion paper, this will finally unlock the data on consumer energy demand that is hidden “behind the meter” which is needed to help keep the power system reliable and secure.
But, the paper says, it will also require a major overhaul of how we describe and regulate electricity buyers and sellers – and new systems to govern how bidding takes place in the market.
Green says, “If you want that activity you need to create the software that will enable it in this emerging market.
“We have a project in France with the fifth largest retailer, ekWateur. It allows customers to choose their own energy mix. For example: ‘I want 10 per cent solar from this farm, and wind energy from xx and energy from neighbours xx per cent.’
“Their customers are more engaged, but they are being given the tools. We should not underestimate the power of giving people tools and choice.
“Our view is that the energy system is only as good as the market that sits behind it. You need a way to incorporate all the DERs and give everyone the opportunity to be rewarded for the contribution they make to the energy system. It has to work for everyone.
“If you invest in a solar system and you make $500 a year from it but participating in the market is prohibitively costly, then it’s not working for you.”