21 February 2018
As most of the community energy world looks around for new business models that work, a few brave souls are tackling innovative projects head on to bring the value of locally generated renewables straight to communities. It sounds simple, to sell electricity from renewables straight to people living locally, but it’s an area bound by consumer protection regulation and barriers. It’s only through real projects and trials that seek to achieve the local supply dream that we can start to unpick our complex energy market and make it more democratic, decentralised and decarbonised.
At our event in Cardiff with Western Power Distribution (WPD) recently, we heard from two more of these pioneering communities who are exploring peer to peer trading and microgrids. We were also joined by the Welsh government who are following Scotland’s example of strong policy drivers and support for community and locally owned renewables. Last year the Welsh Government set ambitious targets including 1 gigawatt (GW) of renewable electricity capacity in Wales to be locally owned by 2030, and for renewable energy projects to have at least an element of local ownership by 2020.
Felix Wight, technical director at Repowering London, talked about their peer to peer trading sandbox trials, including one of only two innovation trials that have been approved as part of Ofgem’s sandbox. The sandbox is a way of testing new and innovative energy generation and supply ideas, outside of the current regulatory framework, for up to two years. Repowering has done extensive engagement and their members want a link between the PV on their block of flats and their bills, so they are thinking about the project on a building level, rather than a geographic area (like Energy Local).
Repowering want to create a sustainable community energy model, using virtual data collection for multiple blocks of flats, some with generation technology such as solar or CHP already installed, and share the energy between the blocks. They aim to recruit 50 people, and their role is to keep the communities’ interests in mind and act as resident’s main point of contact. There are multiple project partners, including Electron, EDF, UCL, Passivsystems etc. Electron will be developing the blockchain element of the project which is one decentralised method of managing the data and transactions more efficiently, instead of Elexon (the current centralised accountants for our electricity system). The tariff, energy sharing, and billing will be automated, but participants will be able to set preferences to save money, benefit others, or for their energy to be as green as possible. Reflecting on the Sandbox, Felix said, “If we hadn’t been working with EDF we wouldn’t have made it through the Sandbox application process.” It’s not easy for small community organisations to engage in this and even if you get into the Sandbox you still have to find funding to trial your idea.
Dave Tudgey and Damon Rand from Owen Square Community Energy (OSCE) after successfully installing an award winning innovative renewable heat network in their community building are now innovating again with the Two Streets of Solar community microgrid and local supply project in Bristol. This project involves retrofitting a physical microgrid in a back alleyway between two rows of Victorian terrace homes with solar energy shared between neighbours with or without PV on their roofs, and hopefully extending this virtually to other houses in the area. Dave and Damon talked about their ambition to develop a new business model for solar and reduce our dependence on fossil fuels. Installing physical wires for a true microgrids would enable them to control the energy generation and supply behind the meter, which would mean the costs could also be managed at a local level. However, as soon as you touch the public network you have to pay full Distribution Use of System charges (DUOS). Installing new wires next to old wires is expensive and duplicates existing infrastructure, so physical domestic microgrids are ideally suited to new build housing developments, where new wires are going to be installed anyway. OSCE have applied to take part in WPDs new innovation trail, OpenLV, to manage the data below their local low voltage substation, which could be used to facilitate a virtual microgrid. Their geographic boundary is all the 350 homes attached to their local substation. They have divided this into three areas dependent on suitability for different types of microgrid. The challenges they face include the shift from the Feed in Tariff to a merchant system, and getting banks to finance this sort of work.
Both peer to peer trading and microgrids could help balance supply and demand at a local level, which has implications for our energy network. Yiango Mavrocostanti from WPD’s Future Networks team said, “We need to completely change our energy system architecture and make it smarter, ensuring the network operates as optimally as possible.” She talked about how WPD delivers their innovation strategy through trials, and how some of these involve communities. For example, Electric Nation explores the impact of electric vehicles (EVs) on the network and is helping develop tools to plan and be ready for more EVs in future. Plugs and Sockets is WPD’s strand of the Cornwall Local Energy Markets project which is developing a flexibility platform that will enable prosumers to trade consumption or generation to benefit a third party. Open LV is about developing apps to access and share data from local low voltage substations, which will enable community energy groups access to local substation demand data. Academics and community groups have been invited to come forward with ideas for how the data and apps could be used and developed, as OSCE has done. As WPD develop from a fairly passive Distribution Network Operator (DNO) to a Distribution System Operator (DSO) they will increasingly involve communities in their trials, interact more with customers and look to trial flexibility services for local energy markets to achieve balancing between supply and demand. They will be publishing a paper on this in the summer and in the meantime will be continuing to engage communities and local energy stakeholders through our final Democratic Decentralised and Decarbonised event in Devon on the 9 March, more connections surgeries and online tools and resources.
The unprecedented changes in our energy system can feel a bit chaotic in these uncertain times, and a few pioneering organisations are trailblazing by testing new models and approaches that we can all learn from. Don’t be daunted, as Jennifer Pride from the Welsh Government said, “chaos is great, you can get away with loads when things are in chaos.
Author: Jodie Giles, senior project manager – communities