Published on May 15th, 2018 | by Jake Richardson0
Centrica Trials Blockchain Energy Trading For Local Market
May 15th, 2018 by Jake Richardson
Centrica and LO3 have collaborated to put together a local energy market trial in Cornwall, England. Blockchain technology will be used to create a peer-to-peer energy trading platform. Solar power and energy storage will also be integrated into the local energy trading system. Emily Highmore-Talbot, Centrica’s Head of Communications (Business and Innovation), answered some questions about the project for CleanTechnica.
1. How could using the blockchain technology unlock savings for 200 local homeowners and businesses?
It’s still very early days but the idea is that a peer-to-peer energy market will offer the customer an alternative to buying all their energy through their supplier. Participants will be able to buy and/or sell energy within the local energy market, connecting homes and businesses who have their own on-site generation capability with other customers who would prefer to buy their energy from someone local.
The trial is taking place as part of a broader Local Energy Market trial in Cornwall, which is being designed to reward participants for being more flexible with their energy use. The details are still being worked on but an example could be that a homeowner might receive a credit on their bill or a payment direct from the LEM. On the business side, we would expect to see improvements in operational efficiency that would result in a financial upside.
2. How were the homeowners and businesses selected to participate in the program and how long will it last?
We intend to recruit 200 homes and businesses to take part in the trial, a good number of whom will likely already be involved in the wider Cornwall Local Energy Market programme, which comprises around 100 homes + 50 businesses. We’ve had applications in from over 300 potential domestic participants and are about to embark on technical surveys to identify which 100 we will be taking forward in the trial.
Our aim is to test the market approach across a variety of use cases e.g. homes on gas/not on gas, homes with/without electric vehicles, new build properties vs older etc.
On businesses, we aim to work with around 50/60 businesses including both industrial & commercial customers, and renewable generators, and have a total funding pot of £8.6m available to support businesses who want to be part of the programme.
We are already working with a number of businesses and have completed energy audits at over 50 sites.
3. Are the homeowners and businesses generating their own electricity using solar power? If so, what percentage?
Some of the homes already have solar panels installed – we will be covering the cost of installing solar PV in all those that don’t currently have it and will also be installing battery storage to complement the solar panels so all domestic participants have solar generation and storage capability.
We expect that around half of the businesses that come on board will be renewable generators. We’re also working with some businesses who already have their own on site solar – see answer to Q11 for more info.
4. How will the energy be traded using blockchain? Will users be able to see what energy amounts are available somewhere and at what price?
In time, the blockchain trial will be baked into the Local Energy Market programme. As part of the programme, we are developing a first of its kind market platform that will enable participants to put bids in to either buy or sell energy, much like our own team of energy traders.
The platform is currently going through a Beta-testing phase with the aim of launching the first flexibility trials at the beginning of June. This will see the local distribution network operator (Western Power Distribution – WPD) bidding to buy flexibility from participants.
We are also preparing for a second set of trials, currently scheduled for winter this year, which will provide the capability for WPD and the transmission network operator (National Grid) to jointly procure flexibility services.
5. Was there any particular reason or reasons for choosing Cornwall as the site?
Cornwall has made extraordinary strides in terms of their take up of renewable generation but that has brought challenges in terms of network capacity. This means that the network has a queue of renewable generation programmes with high associated grid connection costs.
The LEM will both support local security of supply and the future development of renewables in the region by reducing grid constraints through flexible demand, generation and storage.
As part of the programme we have also established a new office in Truro as a hub for the programme and are recruiting a number of highly skilled roles including software developers, programme managers and technical experts.
If successful, we hope that the programme will also support future economic growth in the region.
6. How many of the participants are using combined heat and power?
It’s a little too early to say as we’re still working to recruit businesses. We are, however, currently working with a local hotel (Carbis Bay, see below) to install two new CHP units.
7. Will trading energy within a local market using peer-to-peer technology upset local utilities?
The local distribution network operator, Western Power Distribution (WPD), is actually one of our partners on the trial. WPD hold responsibility for maintaining the electricity grid and managing the delicate balance of supply and demand across the region. This trial is an opportunity to see how we can support WPD and other network operators by relieving pressure on the grid through the deployment of distributed generation and storage.
8. How are the energy trading transactions documented? Do sellers and buyers receive electronic receipts via e-mail?
It’s still early days, but essentially the transactions will be recorded on the blockchain as part of the Local Energy Market platform that will be accessible to all participants in the trial.
9. What are you measuring during the program to determine success?
A lot of this is about customer experience so we’ll be looking at how easy is the system to use, both from a business and domestic participant standpoint, and in terms of the network operators’ experience.
We’ll also be looking at how many MW of clean energy we’ve been able to bring to the system, where we’ve been able to avoid constraints on the system that might have otherwise resulted in constraint payments being made to operators, how many businesses we’ve been able to help etc.
10. If the program is a success, is there a plan to roll it out to other local communities?
This is an R&D project and early days but we believe that the Cornwall Local Energy Market and associated blockchain trial is an exciting opportunity to demonstrate the opportunity for local energy markets in the UK and beyond to both relieve pressure on the grid network, support future decarbonisation and give customers at home and in business greater control over their energy use.
11. What kind of businesses are participating in the program?
Earlier this year we announced that we will be working with the Carbis Bay Hotel & Estate where we will be installing two new combined heat and power (CHP) units to help supply their £15m beachside regeneration project comprising accommodation, a restaurant and event space.
Another example is The Olde House working farm and holiday retreat near Wadebridge where we have worked with redT energy to install a series of 1MWh energy storage machines (flow batteries) that will help the site to better manage the power they generate from a 250KW solar array.