HOW CITIZENS GENERATE THEIR OWN ELECTRICITY

LOCALLY GENERATED ENERGY

January 05, 2020

How can citizens produce their own electricity? Which technologies are available? How can electricity be shared with others? How reliable is it all? And what does it cost?

ENERGISING EACH OTHER

In this connection there are a range of different concepts and approaches, depending on a few factors: is the exchange of electricity to be limited to neighbours, or is surplus power to be passed on to the local electricity supplier? Is electricity to be shared, exchanged or purchased? And, depending on the chosen option, which technology is used? Regardless of the detail of how each system is organised, peer-to-peer energy production opens up new opportunities for citizens. The following three examples show how it can work.

BROOKLYN MICROGRID – HOW A NEW YORK NEIGHBOURHOOD PRODUCES THE ELECTRICITY IT NEEDS

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The “Brooklyn Microgrid” project is one example of how to generate and distribute electricity locally. Since 2017, this area of New York City has been supplying itself with its own electricity via a microgrid. Supply, demand and transactions are managed by means of blockchain technology. Here, the phrase “networking among neighbours” has taken on a completely new meaning.

This is how it works: some of the residents operate large solar power systems on their roofs to generate energy that is then collected in battery storage devices. If they produce more energy than they themselves consume, they can pass on their surplus to those of their neighbours who also belong to the network. In order to be able to distribute the electricity, the production is recorded, calculated and distributed with split-second precision. All processes are regulated via an app and a blockchain-based data platform. It’s up to the participants themselves to determine the conditions under which the electricity is to be traded. Prices can be defined according to the volume of use; some of the electricity can even be given away. Anything’s possible.

The Brooklyn Microgrid has come into being through the cooperation between the New York start-up

LO3 Energy, the Digital Grid division of the German technology group Siemens und next47, a Siemens spin-off that promotes innovation. The project partners have provided the hardware and software for the New York energy experiment, with each contributing an essential element such as the battery storage unit, the smart meters for the electricity network, and the blockchain programme required for trading. What’s the point of it all? The Brooklyn Microgrid is an ideal testing ground for acquiring experience in this pioneering sector. How can the technology be applied and brought to market? How do the users behave? [1] Experiments such as these give companies the opportunity to explore what role they might still be able to play in a more decentralised energy system in the future. [2]

Microgrids

Microgrids are smart mini power grids. They independently regulate the generation, distribution and consumption of electricity for a defined area. The development of microgrids has been pursued since the early 2000s. Electricity production by means of renewable energies such as solar, wind, hydro or biomass power is especially suitable for the operation of microgrids, since they can be used on a small scale and by private households. But what are the advantages of these small power networks? Microgrids enable entire regions to become independent, help develop remote areas and relieve the burden on the main transmission lines of the energy network. In future, even small and medium-sized enterprises could use energy supplied by these decentralised systems. The German technology network OstWestfalenLippe is currently researching how this can be made to happen. [3]

GREEN POWER GRID – HOW THE GERMAN CITY OF SPEYER PROMOTES GREEN ELECTRICITY

The “GreenPowerGrid”, a cooperative pilot project by Stadtwerke Speyer (Speyer’s public utility company) and the Fraunhofer Institute for Industrial Mathematics (ITWM), shows how energy can be traded without the need to use blockchain programmes. The project partners want to establish a network of private producers that will supply the region with locally generated green electricity. The goal: 100 percent renewable electricity.

How does it work? Stadtwerke Speyer provides the infrastructure of photovoltaic and wind power plants as well as decentralised battery storage facilities. A total of 100 to 120 units are part of the local energy system. There is no centralised control; instead, supply and demand are regulated by the many decentralised storage facilities. Processing takes place via a platform operated by the municipal utility company. Thanks to the combination of solar and wind energy, the storage facilities are constantly being utilised well, and the energy system’s decentralised structure makes it resistant to major outages. What’s more, residents are incentivised to build more photovoltaic systems of their own – either by leasing them from the municipal utilities or by building them privately. In principle, the “GreenPowerGrid” is structured in such a way that it can grow organically. In this way, the share of green electricity could be gradually increased throughout the region.

SONNENCOMMUNITY – JOINING THE NETWORK WITH YOUR OWN ENERGY STORAGE SYSTEM

The Bavarian company „sonnen“ has gone down a different path. What it actually does is to produce and sell energy storage systems. But the bonus for customers is that those who buy one of the company’s energy storage systems can join the “sonnenCommunity” network and use it to pass on their surplus electricity or buy electricity for themselves.

In concrete terms this is how it works: all participating households with their own solar power or wind energy systems and matching storage facilities are equipped with smart meters and linked in this way to one another. Around the clock, the smart meters measure how much energy the respective household produces and send this information online to the “sonnenCommunity” control centre. The latter pools all the information, balancing the needs within the nationwide “sonnenCommunity”.

WHAT DOES IT COST?

It all depends. As shown by the three examples, several factors play a role when it comes to the question of pricing, such as the number of participants, the question of who is feeding electricity into the respective grid and who is a mere consumer, as well as what the total size of the system’s performance is. If the energy supply is in the hands of the municipality, prices could be more favourable because profit margins are inapplicable. And what’s more, the higher the number of participants in the market, the greater the fall in energy prices. The GreenPowerGrid joint venture [4] has very concrete plans to use its system to establish a new, lower price for green electricity in the city of Speyer. The auditing and consulting firm PricewaterhouseCoopers (PwC) predicts that, in the future, decentralised structures and transaction models will lead to more transparency and also greater flexibility in the energy sector.[5]

DOES ALL OF THIS ONLY APPLY TO ELECTRICITY?

Models such as these could definitely be extended to the entire energy supply sector, including heat and fuel. For example, blockchains could also be used to distribute heat, as the “Exergy” project by the start-up company LO3 Energy has shown. It has set itself the goal of using the heat energy generated by data centres to heat houses, storing the waste heat from electrical devices and distributing it via interfaces. The sale of the (stored) heat is organised via a blockchain system [6]

... AND WILL WE ALL SOON BE TAKING PART?

Self-sufficiency projects by so-called prosumers – people who consume and produce a product – are still the exception. The existing system of large energy concerns and suppliers, network operators and consumers is widespread. But what will the future look like? How can such decentralised organisation gain a foothold? And will it make where electricity comes from more transparent?

Projects to date have shown that self-produced and self-traded energy has many advantages – both for each individual and for society as a whole. For example, it becomes possible to trace where the electricity comes from. The decentralised structure makes the supply system as a whole less susceptible to major blackouts. At the same time, incentives for private households to buy their own solar power systems and participate in the local development of energy generation are on the rise. This, in turn, increases the chance of better achieving the major goals for society as a whole – ensuring uninterrupted power supply, making grid operation more economic, and reducing CO2 emissions. According to analysts, prosumers have a huge potential to change the energy market drastically. [7] In short: it can’t be ruled out that major energy suppliers will soon find themselves facing serious competition.

Quellen und Literaturangaben

[1] Vgl. „Solarstrom dank Blockchain“, Hubertus Breuer, Siemens, 2018
[2] For more information: „Technologiestudie Microgrid – Markt- und Technologieübersicht für Komponenten eines Microgrids“, Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO, Stuttgart 2018.
[3] Vgl. „Blockchain – Chance für Energieverbraucher? Kurzstudie für die Verbraucherzentrale NRW“, PricewaterhouseCoopers, Düsseldorf 2016, S. 33.
[4] Vgl. Das Technologie-Netzwerk: Intelligente Technische Systeme OstWestfalenLippe.
[5] Vgl. GreenPowerGrid https://www.greenpowergrid.info/home/nutzen-vorteile/
[6] Vgl. „Blockchain – Chance für Energieverbraucher?“, S. 21-22.
[7] Vgl „Blockchain – Chance für Energieverbraucher?“, S. 33.