AGL tests household energy trading using blockchain in Melbourne pilot

Blockchain technology designed to allow households and businesses to trade or share locally generated power with each other is being trialled in Melbourne, in an ARENA-backed pilot program being led by AGL Energy.
The virtual trial will use a mix of solar panels, batteries and ‘smart’ air conditioning at Melbourne homes in an effort to discover where there is value in peer-to-peer energy markets, and how blockchain technology can be used best in the process.

The Australian Renewable Energy Agency is providing $120,000 to support the $293,800 “desktop” trial, which it says was conceived in ARENA’s grid integration innovation lab, A-Lab.
IBM Australia and Marchment Hill Consulting are partnering AGL on the project, with IBM focused on the blockchain technology’s ability to recognise, authenticate and settle energy trading, while Marchment Hill will provide market analysis.
Blockchain technology, which was originally devised for the digital currency Bitcoin and is used in other industries like financial markets, is increasingly being seen as a key platform for consumers to participate in the new distributed renewable energy market, and get better value for their unused solar power.
In the US, the technology has been pioneered through a project called Brooklyn Microgrid, in which local outfit LO3 installed infrastructure to enable a small network of Park Slope buildings, and another cluster in neighbouring Gowanus, to distribute locally sourced and mostly solar electricity, bypassing the utility.
The Brooklyn Microgrid’s short-term goal was to operate as a backup option during storms, cyber attacks and other catastrophic disruptions. But in the long term, LO3 aims to set consumers on a path to fully owning the electricity their community generates, giving them a say in how to distribute it and possibly encouraging further investment in renewable energy sources.
In Australia, there have been various moves to apply the technology locally, including by Perth-based company, Power Ledger, whose P2P solar trading platform was launched at the White Gum Valley housing development in Fremantle in December.
Power Ledger’s system uses blockchain technology to allow residents to trade electricity amongst themselves at a price greater than available feed-in tariffs but lower than residential retail tariffs, providing an incentive for more developers to install rooftop PV on strata-titled developments.
“Australia has experienced a rooftop solar boom in the past decade and we are expecting a residential battery boom to follow in the coming years,” said ARENA CEO Ivor Frischknecht on Friday, in comments about the Melbourne trial.
“This means we’d like to explore new technologies and mechanisms to allow consumers and business to trade their own renewable energy with each other and with network companies. Ultimately these investigations are about getting the most value out of solar and battery systems through a more flexible and modern marketplace.
“By supporting innovators like AGL to conduct projects like this, ARENA is helping to ensure a smooth transition to a renewable energy future,” he said.
The AGL-led trial is also expected to provide valuable information for regulators, energy service companies, start-ups, retailers, and networks on how peer-to-peer trading might affect markets and market participants, and how the market could be further developed.
The trial is due for completion in July 2017 and could lead to a physical, real-world trial, the parties said.

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