Australian consortium launches world-first digital energy marketplace for rooftop solar

Really good news, initially published in The Guardian, 22 Feb 2017.  Pilot program will allow homeowners to tap into a network of ‘virtual’ power stations made up of smart grids of rooftop solar and batteries.  

Australian homeowners with solar panels and batteries could soon trade their electricity in a digital marketplace developed by a consortium of electricity providers, energy tech startups, energy retailers and energy agencies.

“The uptake of rooftop solar is one of the highest in the world per capita in Australia – around 1.6 million rooftops are fitted with solar – and it’s being rapidly followed by battery storage,” Blythe says.  This has led to a shift away from thinking of households solely as energy consumers towards them being viewed as active participants in the grid.

“If we’re going to have customers that can participate in a grid, then they need to get paid for their participation,” he says. “We needed … a new way of thinking about how these decentralised grids are going to work and fundamentally, how do we do that cost-efficiently.

What they came up with has yet to be done anywhere in the world: a network of “virtual” power stations made up smart grids of rooftop solar panels and batteries. The aim is to reduce energy costs, drive investment in renewable energy, stabilise the electricity grid and buffer it against surges in demand such as the recent heatwaves.

With power now being generated not only at the centre of the grid but out at the fringes, deX acts like traffic lights controlling the flow of power in all directions according to where the need is, explains Frischknecht.

“For example, a particular line is overloaded at a particular time of the day or it thinks it might be, what the deX exchange does is for the network to effectively post that problem in an automated fashion and for households with batteries and solar to say, yep I’ve got a solution for you,” he says. “DeX allows that exchange to happen in both a technical way and a financial way.”

This communication will be enabled by a system developed by Reposit Power that controls the home-based battery and links it to the exchange. This smart system communicates with the marketplace in real time, looking for incentives that the household’s energy portfolio can participate in.

But if so much of the load is being taken up by individual household solar systems, does this take the pressure off governments to invest in energy infrastructure? Are we at risk of decentralising too much?

Frischknecht argues that if anything, we are still too reliant on centralised energy production.

“All of the load is out at the periphery of the network; the load is where this generation and storage is,” he says. “It means that the network will be better supported and ultimately we could end up with cheaper networks, which are the majority of our electricity costs, so this is a pathway to lower electricity costs.”

The federal minister for the environment and energy, Josh Frydenberg, says the project is an important initiative that creates two-way interface between energy consumers and local network operators.

“This holds the potential to deliver on the government’s commitment to increasing the reliability of Australia’s energy system, whilst supporting a more effective and cost-competitive rollout of renewable energy to households,” Frydenberg says.

While rooftop solar currently represents around 16% of renewable energygeneration in Australia, Frischknecht says it is estimated to increase its contribution to anywhere between 20 and 50% of all electricity generation.

The consortium is launching two pilot projects in the ACT and on Victoria’s Mornington Peninsula, each involving around 5,000 households. The projects are also being overseen by a reference group that includes the Australian Energy Market Operator, the Australian Energy Market Commission and Energy Consumers Australia.

By Sophie Vorrath, Originally published on RenewEconomy.

The Australian energy market is set for a major shake-up with the launch of a major new government-backed initiative to create an open marketplace for locally generated and stored rooftop solar power to be traded between households, businesses, communities and network utilities.Unveiled on Thursday, the Decentralised Energy Exchange — or “deX” — is being hailed as a revolutionary digital marketplace that will change the way energy is produced, traded and consumed at a local level in Australia.

The project, which is currently at the pilot phase, is being funded by the Australian Renewable Energy Agency (ARENA) and led by energy tech startup GreenSync, in collaboration with network operators United Energy and ActewAGL, energy management start-up Reposit Power, and new energy retailer Mojo Power.

It will, for the first time in Australia, create an open marketplace for the value of energy generated by solar panels and stored in battery packs to be traded on a mass scale.

“Homes and businesses will be able to monetise their solar and storage assets by essentially renting them to the grid when they’re most needed,” said GreenSyncy CEO Phli Blythe.

Imagine a single marketplace where consumers can connect and configure their energy resources, and all of the upstream value generated by these assets are automatically paid into a bank account or digital wallet.”

But perhaps most importantly, the project will shift the Australian energy market from a centralised to a decentralised model — transforming the way electricity grids are used, and removing the need for multi-billion dollar network infrastructure upgrades.

deX will revolutionise peak electricity management and drive more effective investment in energy infrastructure,” Blythe said.

We have lots of small ‘power plants’ on more than 15 per cent of the roofs in Australia. Getting all of these working together to support the grid is a powerful proposition for the widespread adoption of renewable energy technology and will fundamentally improve the reliability and reduce the intermittency of these resources in the energy mix.”

This comes at a key time for Australia, with energy security dominating political debate and media commentary as the nation’s ageing electricity grids limp through another hot summer.

As we have reported on RenewEconomy, a number of outages in South Australia and load-shedding in New South Wales have highlighted these problems, while simultaneously deepening the political divide over renewables, and how quickly the inevitable transition to clean energy generation sources should be made.

At the crux of this divide is the political hot potato of electricity costs, which the have increased by more than 100 per cent across Australia, with some of the highest power bill increases recorded in the eastern coal-dominated states.  The Coalition argues that the Labor Opposition and many Labor state governments’ high renewable energy targets will drive electricity prices up further, while the pro-renewables camp, including many industry analysts and market participants, argue that the cost of of the shift to renewables will be much cheaper than business as usual.

GreenSync said on Thursday that deX would work to drive investment in renewable energy, while allowing utilities to avoid unnecessary, multibillion dollar investment in underutilised infrastructure.

“This is a world-first, market defining innovation that will support how energy markets work with intermittent renewables, encouraging growth in such resources,” GreenSync said in a statement.

“For GreenSync, this will be an important global transition point, evolving its load management platform into an energy marketplace.”

ARENA CEO Ivor Frischknecht said the Agency’s backing of projects like deX went to its primary goal of accelerating Australia’s shift to renewable energy.

“To smoothly transition to a renewable energy future, we need new technologies and markets,” he said.  “This could encourage more investment in solar and batteries, supporting the grid, reducing the need for infrastructure investment and ultimately reducing the cost of renewables in Australia.”

ACT climate minister Shane Rattenbury notes that deX is particularly good news for the nation’s rooftop solar households, many of whom would argue that the true and fair value of their contribution to the grid has not been properly accounted for.  

“DeX will help us understand how distributed energy services like solar and battery storage can be valued, reflecting when and where the service is provided, and how that value can be shared fairly between customers and network businesses. This knowledge will inform our transition to a high-penetration renewables grid, both in Canberra and nationally.”

United Energy’s Greg Hannan said the exchange would bring Australia a step closer to having the kind of localised or “mini markets” that would optimise value for all parties, while managing the key issues of reliability and stability.

“This is key to creating value for energy customers in the grid of the future,” he said.

An industry discussion paper will be released ahead of the first pilot projects.