Care to trade? New advancements in the energy transition

Imagine: traditional energy providers are a thing of the past. You check to see whether your rooftop solar panels are still dust free, and wave to your neighbour who is plugging in her electric car. She gives you a big thumbs-up: after all you cheaply sold her some electricity so she could charge her vehicle. You head in, have one last look at your small control terminal to check today’s energy prices, and comfortably put it away. After all, you can trust it to run itself and plan ahead while you are asleep. Does this scenario sound too futuristic and good to be true? Gijs van Leeuwen, Energy Science student at UU, showed it to be in fact both feasible and realistic.

“This is the first project that combines the technical and economic parts, and the control system of microgrid communities,” says Van Leeuwen. He got his Master’s thesis published in Applied Energy, one of the most highly esteemed journals when it comes to the energy transition from fossil fuels to renewable energy sources. “We wanted to figure out how to integrate renewable energy at a household level, when realistically people use and produce different amount of electricity at different times,” he explains.

Until now, researchers have only looked at either the technical or the market-mechanisms of microgrid communities. In these communities, people are both consumers and producers – so-called ‘prosumers’ – at the same time. Households can generate their own electricity from solar panels, and feed any surplus back into the system.

“If you only take into account the technical aspects and therefore only look at how the microgrid would operate, there would be no money flow and feeding your energy into the grid would be like charity – you get nothing in return and the chance for people taking advantage is high,” Van Leeuwen illustrates. “It isn’t realistic.” On the other hand, if you only look into people trading energy, you only examine the market mechanisms of a theoretical situation and cannot account for the technical limitations of the physical electricity grid.

Creating balance

The algorithm that Van Leeuwen developed to combine both these essential aspects of microgrid communities uses data from a real prosumer neighbourhood in Amsterdam, the East Harbour Prosumers Community. It showed that, in order to make this microgrid scenario more realistic, we should consider the technical limitation of the microgrid, and to yield the most realistic and feasible results, the microgrid community could include trading between neighbours. “You need both to create a balance,” explains Van Leeuwen.

To keep everything safe, in addition to that you also need a decentralised control system. Van Leeuwen provided detailed descriptions on now to implement the algorithm on a hack-proof blockchain control network, which they tested on a virtual test network. This system removes the need for a centralised energy provider, keeping prices low, and makes sure nobody needs to share any of their data they don’t feel comfortable sharing. “We are giving control back to the consumer, and no humans are needed to run anything,” says Van Leeuwen.

Next piece of the puzzle

Though these advancements are certainly promising, we are not there yet. “Now we have to figure out how to involve people in the process – the social aspects,” explains Dr. Tarek Alskaif, postdoc at the group of Energy & Resources at the Copernicus Institute of Sustainable Development, and Van Leeuwen’s thesis supervisor. “We used to think that in systems like these, there would be a pool in which everyone could deposit their energy. You don’t know where the energy that you put in turns up, and in the future there would be no economic compensation for that. Now we want to work in a way that there is bilateral trading.” This means that you can discuss with neighbours directly whether you want to trade with them – and at what price and amount. “This makes the system more social,” says Alskaif.

The social aspect also includes finding the most effective incentive. Do people participate for the money, to reduce CO₂, because it creates a social community? To answer these questions, a new Master student is already lined up.

The paper is part of a bigger project called B-DER (pronounced 'be there'), led by Alskaif and partnered with Resourcefully and EnergyCoin Foundation.

Publication: Gijs van Leeuwen, Tarek AlSkaif, Madeleine Gibescu, Wilfried van Sark, 2020. An integrated blockchain-based energy management platform with bilateral trading for microgrid communities, Applied Energy, Volume 263, 114613, ISSN 0306-2619, https://doi.org/10.1016/j.apenergy.2020.114613

Read more: