Blockchain could democratise micro-energy market
May 21, 2019
Households and businesses in the UK that generate their own power through micro-renewables, such as solar panels and wind turbines, may soon use blockchain technology to decide where to distribute their extra energy.
A project led by computer scientists at the University of Bristol – funded by UK Research & Innovation’s Engineering & Physical Sciences Research Council (EPSRC) – is researching free trade between micro-generators in a peer-to-peer (P2P) energy market.
The UK has seen an increase in the uptake of micro-generation, in which individuals or organisations install their own small scale, renewables-based energy generators to produce and use energy.
Currently in the UK, the household-generators must sell the excess of their production back to the national grid at a set price. In a P2P energy market, any two individuals or households can directly buy from and sell to each other, without intermediating utilities or other third parties.
The key aim of the Household-Supplier Energy Market (HoSEM) Project is to research the feasibility of a democratised P2P energy market.
“Perhaps you have installed some solar panels and you would much rather contribute your excess generation free of charge to the nearby homeless shelter instead of selling it back to the utility provider,” said Ruzanna Chitchyan, who leads the project. “Or sell it to someone else at a better price or give it to your neighbour. The households that produce the energy should have the power to decide on what to do with it. Similarly, consumers should be able to decide whose energy and at what price they want to buy. The HoSEM trading platform will support this freedom of choice.
“Similar sharing platforms are already in place in other markets, for example via Airbnb in the hotel industry, or Uber in taxi hire, though both of these still impose substantial centralisation and intermediation charges.”
The Bristol research will look at:
- Whether the infrastructure for P2P energy trading is technically feasible;
- Who will provide it;
- What will be the role of the current major power producers in such a market;
- Whether supply continuity can be ensured under the fluctuating generation imposed by the nature of the renewable energy sources;
- What regulatory changes are necessary for this market to function; and
- What mechanisms, including cyber security and privacy approaches, are needed to engender trust in such a market.
Universities of Exeter and Leicester are the other partners on the HoSEM project. Exeter researchers are looking at what factors will encourage households and groups to join this P2P market, while Leicester researchers are taking an algorithmic and game-theoretic view on P2P trading.
“As we move to a low carbon society, we need to make the most of the energy generated by all producers, large or small,” said Jim Fleming, EPSRC’s head of energy. “This project will look at the technical challenges that need to be overcome to implement a peer-to-peer energy trading system. If successful it will bring power from the people to the people.”
To enable such a P2P energy market, the project is developing a technical platform to support P2P household-level energy trading. This will give market participants read and write access to the records for the production, sale and purchase of energy at low cost per transaction. Each transaction must be accurately recorded, verifiable and secured to guarantee accurate assignment of rights and responsibilities for trades and billing, allowing equal access to all interested participants.
Distributed ledger technology could uniquely meet the domain requirements for the decentralised distributed energy systems, providing a technical tool for such a platform, if the households were to trust the platform providers, and were willing to join this market. The ledgers could also be available to third party businesses that wish to provide new value-added services to the energy market.