A Global Meeting of Minds
It is easy for businesses to dismiss the world of Academia as irrelevant, but we do so at our peril; for it is the research community who are at the cutting edge of everything. It’s not just research into technology or life saving drugs either. On 17th and 18th February I had the privilege of working with over 60 leading thinkers in the subject of energy markets, peer to peer trading and community energy at the Florence School of Regulation.
Drawn from the US, Brazil, UK, Europe and Australia and specialising in everything from economics and regulation to technology they brought their thoughts and an openness to share information and solve problems. Here are a few insights:
Blockchains are no longer a topic: they are adopted on their merits
The session kicked off with two case studies and both had blockchain technology at the heart of it. Not one question came from the group about “why blockchain”; the technology worked and was simply evaluated and adopted on its merits. In these projects it played a vital role in enabling P2P and community energy.
Exnation (www.exnation.com), a swiss university spin-out presented their year-long project in Walenstadt, known as “Quartierstrom” covering 37 households, 75 smart meters, 27 PV and 8 battery storage systems. Their blockchain-based system facilitated a transaction-based market with settlement every 15 minutes and an excellent user experience via mobile and web application.
The University of Utrecht shared their project known as B-DER. Its genesis was in response to a previous project called PARENT in Amsterdam covering the energy optimisation of 27 households; a comment from one of their participants of “what to do further after optimisation” drove them to create B-DER. This is a local energy market for co-ordinating Distributed Energy Resources (DER) via a P2P market, with decentralised market clearing using a blockchain-based virtual aggregator.
Leeds University shared the findings from a Europe-wide research project (PROSEU) that, among other things, identified blockchain technology as having a role in a number of schemes across Europe (of note is the Cornwall Local Energy Market).
The Clean Energy Package provides rights for Energy Communities
Josh Roberts, from REScoop, a collection of co-operatives with a mission to engage in the energy sector to provide mutual benefit and return value back to the community shared some insights. In amongst those insights I was struck by the following points:
- Collective ownership of a wind turbine? – needs to be “for the citizens”: consumer or local ownership. Not businesses – they can provide services, expertise and facilitate.
- Energy Sharing is not defined in the Clean Energy Package: are we sharing or is it transactional?
- Access for citizens to flexibility markets is currently fiction; how do we do this directly?
- Citizens need “Capacity Building”
The final point is particularly interesting. For citizens and communities to participate, they need new skills and understanding as organised communities, something we need to act upon.
Representation from the Italian Energy Regulator discussed how Italy are looking to facilitate communities and citizen involvement, including the need for hourly metering, simple data flows and incentives for Renewable Energy Generators to be shared across “members of the ownership”. It was also interesting that in Italian Law, no network charge or system charge is applied to self-consumed energy.
Incumbent Utilities are more aware but some struggle with mindset
Representatives from four European utilities shared their viewpoints on the market. All made the point that pilots were happening everywhere, but they struggle to scale. I was struck by some of the dominant logic / institutional mindset, hearing the well-worn statement about renewables “… wind, solar, are intermittent, needing large investment in storage for which there is no business case …”. In my opinion, such traditional, “top down” logic of the energy system is incorrect; for, when viewing the energy system “bottom up”, then localised distributed and decentralised renewable generation is a source of diversity and resilience and, locally optimised, is not intermittent; I believe a massive shift of mindset is required.
To that end I shared the example of Social Energy, a tech-based energy company in the UK who have are building a business based on creating connections to customer-owned assets (PV, Battery Storage) and using AI and data to access new value pools. They offer up to 70% off the standard energy bill and are building a VPP behind-the meter; true innovation and disruption. This is happening now, irrespective of the current regulatory environment and will only accelerate when new regulatory changes are introduced in mid-2021.
It was an interesting discussion.
The Mission is collaboration and co-creation
The Global Observatory on Peer-to-Peer (P2P), Community Self Consumption (CSC) and Transactive Energy (TE) Models is on a mission to advance the understanding of these new business models, how they are being implemented across the globe, with a view to accelerating the transition to zero carbon energy system. There are 5 core workstreams:
ST1: Power System
ST2: Hardware, Software and Data
ST3: Transactions and Markets
ST4: Economic and Social Value
ST5: Policy and Regulatory
I will be working with ST2 and ST3; two areas that are especially relevant to my areas if interest and current work.
I love collaborating with this community; there is an absence of agendas, so obviously present when businesses come together to basically push their version of the world or their product on others.
Long may this approach to collaboration continue.