Two years ago, NSW solar installer Geoff Bragg had a vision. “Imagine a system where one customer could sell energy to another customer, via the Distribution Network Service Provider, who ‘clips the ticket’ for transferring the energy,” he wrote in an article published on RenewEconomy in March 2014.
“Anyone with a smart meter could join the market as a buyer or seller,” Bragg wrote. “…If that sounds difficult to do, remember this is an IT and accounting exercise (the physics is sorted already). Think about peer-to-peer file sharing… It would be a piece of cake for a handful of the right IT boffins.”
Fast forward to September 2016 and Bragg is working on turning that vision into some sort of a reality.
His company, New England Solar, and local real estate group Paragon Property Partners are co-developing a unique project near the NSW regional city of Armidale that offers buyers the chance to not only build their dream home from scratch in the NSW northern Tablelands, but to become part owners of their own power company: a purpose-built embedded network through which to buy and sell the solar generated on the community’s rooftops – and stored in its batteries – peer to peer.
Launched to the local community last Thursday, the project, called Lingerwood, comprises 10 neighbouring properties of 5 acres each on which buyers can build the architecturally designed smart home of their choice.
“People will buy the lots of land, including the embedded network, and then we will offer a (solar and battery storage) design,” Bragg told One Step Off The Grid in an interview on Tuesday.
Bragg says the solar and battery storage systems used across the development will vary in brand and capacity from house to house, depending on each household’s particular needs or wants.
“Some might choose lithium-ion battery technology, some might opt for a flow battery,” he said. “But the sizes will likely be similar to the solar and storage packages offered to people on the wider grid, ranging from 7-15kWh of storage, and 3-6kW for PV.”
The smart meter technology – which is being custom-made for NE Solar by some of those IT boffins Bragg had imagined, in this case who are “pretty well connected with the ANU” – will be uniform throughout the development. And the data they collect will be sent out to a third party that will process it and do the billing.
The embedded network assets, meanwhile, that enable the electrons to flow between households, will be community-owned, effectively making them shareholders in a utility.
That “utility” will comprise a 200kW transformer installed on site, connected to the Essential Energy distribution network via a main switchboard and ‘gateway’ smart-metering point.
Each household will then be supplied via underground sub-mains to supply pillars, located on community land adjacent to each house lot. This behind-the-meter network is connected to each house via 10 separate smart meters.
These shared assets will be managed by the Lingerwood “community entity”, a mechanism along the lines of a body corporate that will contract with a yet to be determined local “renewables friendly” electricity retailer, to supply the gateway with energy as needed, and credits for exported clean energy.
The system should work, says Bragg, in a way that ensures a household selling its solar gets a better rate than the 5c/kWh they would get for selling it directly to the grid, while the household buying solar gets it for cheaper than the 23c/kWh might pay if they were buying power from the grid, averaging at somewhere around 15c/kWh.
The ultimate aim, however, is for the households to be largely energy autonomous, relying on the embedded network – and perhaps the wider grid in periods of inclement weather.
For Peter Cooke, a director of Paragon Property Partners, energy autonomy is an important part of the sales pitch for Lingerwood.
“People are very interested in the notion of, not only going off the grid, but being pretty much autonomous; having their needs met by a community utility and only as a matter of last resort …going back to the grid for energy,” Cooke told One Step Off The Grid.
Indeed, he says the original plan was for Lingerwood to be completely off-grid, but the projected cost of diesel back-up proved prohibitive, so “council suggested we do the community title.”
But while Lingerwood has the blessing of the local council, it has a few more regulatory hurdles to clear before it can start trading electricity, including getting a retailer exemption from the Australian Energy Regulator, that will allow the community entity to function as the Embedded Network Operator.
For Bragg – whose 2014 utopian vision of peer-to-peer energy trading had the blessing of enlightened energy market regulators – the need to work around market rules is disappointing.
“The interesting bit from my perspective … is that the only reason that this kind of model is able to done in a regulatory sense is to get an exemption,” he told One Step.
“So while there’s a desire for these sorts of transactions, there’s no regulation to allow it. …It shows how slow the networks themselves are moving when everyone else is getting on with it.
“If the principal can work in a small way, then why can’t it work beyond that gateway meter?” he said. “We need a political understanding of, and support for the concerted push to get the regulators up to speed.”
Bragg said that in New Zealand, networks were looking seriously at a shift to peer-to-peer energy trading, but that in contrast to Australia, it was the networks who were driving this push in NZ, and not the small proponents.
“In New Zealand, networks are seeing it as an opportunity to generate a new revenue stream.” In Australia, he added, “while the networks recognise (peer-to-peer energy trading) is going to come, they’ve got other more pressing things in mind, like how to stay competitive and alive.”
Cooke, too, is critical of the Australian system, but also confident that the Armidale project will get the all-clear.
“These projects should be actively encouraged, not have regulations placed in the way,” he told One Step. “But we’ll jump through the hoops and it will be a live project very soon.”