Local power for local people: Trial suggests changes to local grid charging regime could save billions


piclo-dark copyA trial to match local generation with local businesses suggests that peer-to-peer renewable power services could lead to lower energy system costs. Now Open Utility and Good Energy want Ofgem to consider changing grid charges for local consumption of power.

The Decc-funded trial allowed participating organisations to choose to buy renewable power from local generators or allow Open Utility’s software platform to choose for them. Some local generators, such as community owned turbines at Gorran in Cornwall, ended up supplying almost 100% of power within 33 miles radius, according to the trial.

If rules around local network charges can be changed so that local producers and consumers just pay for the part of the grid that they use, Open Utility thinks the savings could run into £billions over the next ten years.

“One of our missions is to unlock local energy markets and the driver comes down to financial benefit.” CEO James Johnston told The Energyst.

“If there is a financial benefit, it will unlock the whole marketplace. So we have developed a change proposal that we will submit to Ofgem with Good Energy about a fairer way of paying for use of grid.

“If you are netting off locally – that is a generator supplying a consumer on the same local network – why should they pay for using the entire network? That is what they are paying for now. From our perspective, that is the key to unlocking the market. If we could secure this relatively small change… it could have a big impact.”

Johnston accepted that regulatory change was never easy, but the prize was worth the effort – and he believes distribution network operators (DNOs) may not be the losers should local charging regimes change.

“We are under no illusions that this would be quick. What we are focusing on now is the potential pain points that the DNOs currently have and how a system that rewarded local matching could actually benefit them.”

Johnston said that the “biggest problem” DNOs face over the next decade is reinforcing ageing infrastructure that must now cope with increasing congestion from distributed generation.

“If there was a more efficient way of rewarding local matching, incentivising systems to balance more effectively at a local level, you could arguably provide value to DNOs by avoiding reinforcement costs,” said Johnston. “So that is where we want to position this – not just a benefit for distributed generation and local consumers, but also the grid operators themselves.”

Johnston said that the trial – which involved generators including City  of  Cardiff  Council, National Trust,  Westmill  Solar, Community  Power  Cornwall, Brixton Energy and consumers such as the Eden Project, Watergate Bay Hotel,  Lancaster Co‐Housing, Benson Signs and BDP – had “proved that the peer-to-peer matching system worked”. It also suggested that businesses would buy local energy, even without financial incentives, he said, due to transparency of choice.

Johnston added that the next stage would be a “deeper dive” trial aiming to unlock financial savings by “joining the dots across the overall system”. He hopes to announce a further trial later this year.

See a summary of the first Piclo trial here. It was co-funded by Nominet Trust.

The Piclo platform takes in power price and consumer preference information and matches electricity demand and supply  every  half  an  hour.  Customers can adjust their preferences via a web interface. Good Energy ensures that the marketplace is balanced, purchasing surplus power or providing 100% renewable top‐up when required.

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