A test case by Brooklyn-based energy technology firm LO3 Energy has found that buying and selling locally produced renewable energy within towns and cities has financial benefits.
LO3’s blockchain-based software, which aims to allow participants to trade energy locally and securely, modeled a local energy marketplace of almost 100 customers and producer-consumers in Australia’s Latrobe Valley using the data of a 12-month period.
The company tested three scenarios. In one, buyers and sellers did not pay network charges. In the second, they split the costs and in the third, they were responsible for all charges all which is most consistent with markets and regulations. The third scenario showed consumers could save as much as 12% by buying locally produced power, while consumers who also owned a distributed energy resource, could make as much 37% more than they do now.
LO3 Energy has projects worldwide in rural and urban areas, and plans to launch the platform commercially later this year.
“Global energy production is rapidly moving towards renewable distributed energy resources and much of this is being driven by consumer demand for more efficient, lower cost electricity,” Lawrence Orsini, LO3’s CEO, said in a statement. “This test, which used a full year of data, demonstrates clear benefits for energy users and owners of private distributed energy resources who are able to buy and sell energy locally, within their communities.”
The growth of distributed energy resources within communities has the potential to upend the energy-distribution system, as electricity from nearby solar panels, windmills and batteries replaces that moved long distances from large power plants.
A major challenge with peer-to-peer energy trading is the associated network and market charges, including supply and demand management, grid balancing and infrastructure maintenance.
- The company aims to expand by providing the Australian Energy Market Operator, retailers and other enterprises with access to data to support grid services.
- Participants pay a fee for accessing the platform and local energy prices are determined by market forces, with energy being sold at the highest price.
- Karma Takeaway: A major obstacle to the growth of locally-produced wind and solar power has been distribution. LO3’s software promises to offer a platform that overcomes this problem.