An appetite for locally sourced, renewable energy
The prosumers of Wildpoldsried are testing a blockchain-based local energy market.
A picturesque village in Bavaria, nestled in the green, rolling hills of the Allgäu, may sound like an unlikely location to study the grid edge solutions of tomorrow. But Wildpoldsried is an award-winning energy pioneer whose citizens are eager to become a community of energy traders.
By Barbara Simpson
“It all started about 20 years ago,” explains Guido Eberle who is something of an early adopter in a village full of dedicated energy pioneers. In terms of renewable energy, Wildpoldsried has since joined the avant-garde of Europe and embraced the energy transition with open arms. With a mix of wind power (the eleven wind turbines are co-owned by 400 local stakeholders), photovoltaics on all municipal buildings and on 40 percent of private rooftops, and hydropower, as well as a district heating system powered by biomass, and a microgrid with island-mode capacity, this exceptional village has not only achieved self-sufficiency but generates more than seven times its electricity demand.
The surplus electricity from those solar panels has been earning me a little extra income.Guido Eberle, prosumer in Wildpoldsried
In 2001, Eberle installed solar panels on his garage rooftop as part of the earliest federal initiative to boost solar energy. “It was rather expensive back then, but thanks to the guaranteed reallocation charge of the EEG (Renewable Energy Act) the investment paid off in just eleven years. Which means that for the last nine years, the surplus electricity from those solar panels has been earning me a little extra income.” But after 20 years, the guaranteed tariff will run out. New solutions to store and trade the home-grown energy of these Bavarian pioneers will have to be found.
Grid edge solutions for local energy trading
How to sell small amounts of prosumer-generated renewable energy and manage supply and demand? How to access storage capacity in home-installed batteries or electric vehicles? How to harness the available data for predictive grid management? These are the kind of innovative grid edge solutions – where the interests of transmission companies, utilities, and technology providers, as well as prosumers and consumers converge – that are currently being investigated in Wildpoldsried as part of the research project pebbles (peer-to-peer energy trading based on blockchains).
It is a joint research initiative by the University of Applied Sciences at Kempten, the Fraunhofer Institute for Applied Information Technology (FIT), grid operator AllgäuNetz, the regional utility Allgäuer Überlandwerk (AÜW), and Siemens. The initiative was launched in March 2018 to test the technology needed for local energy trading and explore further benefits and business models for grid operators and utilities. So far, energy management system devices – which are the size of a normal router – have been installed at prosumers’ homes to manage their personal energy usage and communicate with the local marketplace.
In fall 2020, the project is entering a crucial phase when the energy trading app will be rolled out and the dozen or so participating prosumers will be able to start trading – supported by a couple of virtual profiles for the sake of simulation. Users will be able to enter the preferred trading price of their home-produced electricity and the type and origin of the electricity they would like to receive in turn. A blockchain ensures that all information is immutable and transparent.
If I could make one request to the politicians in charge it would be: Look into regional energy systems – now!Michael Lucke, CEO at AÜW
The regional appeal
For Michael Lucke, CEO of AÜW, the appeal of the project is to explore services that will have a place in a fully decentralized, decarbonized energy landscape of largely self-sufficient prosumers. He is convinced that a regional energy market adds value for the consumer and that the role of his utility will lie in enabling such services. “Sustainable, locally sourced products are right on trend,” he says. “And I think, in the post-EEG world, there is a market for sustainable, local electricity.” If, in the future, the network charge is adapted to account for actual grid usage, shorter transmission distance will also mean cheaper energy.
One of the prosumers participating in the project, along with early adopter Eberle, is Deputy Mayor Günter Mögele. His roof is topped with solar panels generating on average 17,000 kilowatt-hours per year that fuel his home and his electric car and still feed 75 percent into the grid; his hot water comes from a solar thermal module (at least in summer); and he has installed a wood pellet heating system. Another renewable energy enthusiast who can hardly wait to start trading, he is convinced by the value proposition of local energy supply: “For the dedicated energy pioneer, using the electricity generated by your neighbor will always be vastly superior to using power from the nearest nuclear plant or coal power from North-Rhine Westphalia.”
Pebbles is about creating a local energy trading platform that is able to optimize grid usage and stability by using available flexibility in supply, storage, and demand. Perhaps the most valuable asset in this equation is the flexibility on offer.Stefan Jessenberger, pebbles project initiator at Siemens AG
Flexibility is a valuable currency for grid management
However, peer-to-peer trading is only half of the story, explains Stefan Jessenberger, the Siemens project initiator of the pebbles project: “It is mostly about creating a local energy trading platform for communities that is able to optimize grid stability and to avoid grid congestions by using available flexibility in supply, storage, and demand – depending on the current network situation and load. Perhaps the most valuable asset in this equation is the flexibility on offer.”
Although the project is not yet completed, Jessenberger already points out one of its greatest achievements: the added value it creates for all stakeholders. Grid operators will have to do less manual management due to the automation and can avoid bottlenecks in a system that will have three to four times more renewable energy feed-in and feature more consumers such as electric cars and heat storage units. Regional utilities can offer a digital trading platform for prosumers and consumers, and thus benefit from a new business model. Prosumers, in turn, will be better able to market their green, high-quality energy, especially once they no longer qualify for the guaranteed EEG payment after 20 years.
A taste of the future – but will policy catch up?
It seems as if Wildpoldsried, once again, were offering us a taste of what the future with renewable energy will look like. “I am certain that this model can be replicated in other regions,” says Michael Lucke. “There are no special requirements that would limit a regional energy market only to the Allgäu. For this model to succeed, you just link consumers and prosumers, provide the IT platform – and, of course, you need the necessary regulatory framework with flexible, regional network fees.”
And this is where the catch lies. Because under current federal network regulations, such flexibility does not yet exist in Germany. Nor is there a remuneration for providing essential grid stabilizing capacity that could avoid the need for a costly expansion of the grid. “If I could make one request to the politicians in charge, it would be: Look into regional energy systems – now! We urgently need dynamic network charges and the issue of flexibility must be completely reassessed,” says Lucke.
I am convinced that we will have 100 percent renewable energy as well as grid stability throughout Germany – if we have intelligent systems such as pebbles, such as microgrids and smart grids.Günter Mögele, prosumer and Deputy Mayor of Wildpoldsried
If the appropriate regulatory frameworks are put into place, it is very likely that Günter Mögele’s vision of an affordable energy transition powered by local prosumers will become a reality: “I am convinced that we will have 100 percent renewable energy as well as grid stability throughout Germany – if we have intelligent systems such as pebbles, such as microgrids and smart grids.”
Pebbles stands for peer-to-peer energy trading based on blockchains and aims to digitalize decentralized, prosumer-led energy generation. The idea is to actively involve end users, prosumers and producers to democratize the energy supply. The project will expand the role of the grid operator by developing market-based interventions, which capitalize on the flexibility of decentralized plants.
Pebbles is the third project of a consortium that consists of Allgäuer Überlandwerk GmbH, AllgäuNetz GmbH & Co. KG, Siemens AG, Kempten University of Applied Sciences and the Fraunhofer Institute for Applied Information Technology.
Previous projects at Wildpoldried focused on the integration of electromobility into the generation and consumption of renewable energy (IRENE) and the feasibility of microgrids as individual networks (IREN2).
Author: Barbara Simpson, freelance business journalist based in Zurich
Picture credits: Bernd Schumacher
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