The UK’s drive towards a low-carbon world is already revolutionising the way that we consume, generate and share energy, with growing numbers of people using smart technologies and generating their own energy through renewables.
Soon, many people may not have an electricity supplier in the traditional sense at all. Instead they might be trading energy with each other – sharing it at a local level with neighbours and friends. Peer-to-peer trading is a predicted area of growth and will advance the creation of ‘smart’ towns and cities.
Local community energy projects are already being delivered across the UK, with at least 5,000 community groups undertaking energy initiatives in the last five years.
However, given the proliferation in renewables, home energy storage and smart technologies, the number of people trading energy at a local level is set to rapidly increase over the coming years.
This will render the energy market a much more complex environment and players will need to respond rapidly. Networks need to be ready to facilitate these changes so that customers and communities can make the most of these new platforms and be empowered to generate, buy and sell their own electricity as and when they want to.
Distribution network operators (DNOs) are already realising that just managing the networks is not enough to meet users’ needs in this rapidly changing world. If people are to truly benefit from new technologies, such as electric vehicles and smart appliances, the current system needs to evolve to enable a more flexible energy system.
One way DNOs are doing this is by transitioning to distribution system operators (DSOs), which enables them to not only manage the network, but facilitate a smarter and more agile system that can respond to customers’ needs in real time as energy habits change. This transition creates customer choice and freedom, with communities sharing energy at a local level and coming together to support their own energy needs.
Moving towards ‘connected living’
Giving communities the power to support their own needs and tackle challenging issues around energy could have major implications for social inclusion and enable schools and other public buildings to reduce their energy bills.
Community energy schemes could work successfully in a number of ways. For example, a homeowner could generate their own electricity through the solar panels on their roof, and then sell this to their neighbour. This would help customers to manage their household energy, but also save them money on their energy bills.
It could benefit the wider community too. For example, customers could donate the energy they generate through renewable energy sources to fuel poor customer groups, local charities and schools. It could also see local volunteers setting up their own energy supply businesses where they buy energy from a local company or a local wind farm that they own or partly own.
It will become much easier for communities to serve their own energy needs in this way as homes evolve to support ‘connected living’. As well as solar panels, more homes will be equipped with smart appliances, smart heating and lighting systems, and smart electric metres.
But it is the development of microgeneration and micro-storage that will take peer-to-peer energy trading to the next level.
By using domestic storage in combination with generating energy themselves, customers will be able to store surplus power in domestic batteries, and then use it at peak times to reduce bills or sell demand side response services to the electricity system, either using the electricity stored in the domestic storage or the battery of their electric vehicle.
This provides additional flexibility to the DSO to enhance grid stability and meet overall system needs, and could also generate additional revenue for the homeowner.
Community energy schemes and peer-to-peer energy trading represent an exciting future of opportunities and choice for customers and communities.
However, for people to truly benefit from these opportunities, the networks need to evolve so that they can not only accommodate for the proliferation of interactions that will be happening at a local level, but be afforded the additional flexibility to operate the system at a national level.
The DNOs that can successfully transition into DSOs will be the ones to enable this change and create smart towns and cities that give customers and communities the autonomy and flexibility to generate, consume, buy and sell energy in whichever way they want.
UK Power Networks has launched a consultation on how it is changing to enable a smart future. Read it here: http://futuresmart.ukpowernetworks.co.uk/
Photo by Black Rock Solar