People Power in Local Energy Market Trial

Elmore House in Brixton, south London is set to be the site of an advanced energy project, an exciting new development in the provision of energy in the UK. Residential solar and storage will provide flexibility to UK Power Networks (UKPN) as part of this new local energy market (LEM) trial in Brixton. The project will test whether households in Britain could in years to come reduce their dependence on large utility companies and buy and sell their electricity to neighbours. The 62 flat block looks like many other social housing estates from the outside but could become one of the first to trial peer-to peer trading which is already well established in other industries such as financial services. This peer-to-peer trading trial is being run by EDF and sees residents trade energy generated from solar and stored in batteries between each other. The trial will test how residents can support local power supplies by offering flexible power services to respond to supply and demand. The project nicknamed Urban Energy Club is being run jointly by EDF, UKPN and Repowering London.

UKPN said that historically residents of apartment blocks and flats have been deterred from using low carbon technology but the Urban Energy Club project has the potential to allow more people to use renewables and generate new income for individuals and communities who are otherwise unable to engage with the flexibility market.

Currently British householders have very little control over how to reduce the costs of their energy other than to shop around for better deals as the energy system is traditionally built on households buying their electricity or gas from one supplier only.

Analysts say that in all probability this will change in the years to come as households increasingly turn to local sources to buy their energy such as neighbours or local businesses that generate their own electricity via solar panels or wind turbines. Alternatively, householders will purchase energy as part of a bundle of services such as through a home assistant device or when they buy an electric vehicle.

Simon Virley, UK head of energy and natural resources at KPMG, the consultancy said:

“We may not have much contact with our energy supplier in a few years’ time, as energy becomes a by-product of another purchase, like an electric vehicle, or ordered via your Alexa or Dot [home assistant device]. Peer-to-peer, and other forms of local energy market trading, will also dilute the relationship we have with conventional utilities.” 

Ian Cameron, head of innovation at UK Power Networks, said:

“Elmore House residents will be able to dip their toes into the water of managing renewable energy, generated from their own rooftop.”

UKPN has previously used residential solar and storage for flexibility services, integrating the technologies into a virtual power plant in 2018.

The distribution network operator (DNO) agreed a bi-directional contract with Powervault, to install 40 8kWh batteries in the London Borough of Barnet in order to aggregate 320kWh of energy storage capacity and deliver localised flexibilities.

UKPN offered an availability payment for a two-hour period within the evening peak (5:30-7:30pm) during which time they would be able to call on the combined capacity of the solar-charged batteries to discharge in unison in order to alleviate pressure on the electricity network. Residents were set to benefit from utilisation payments between December 2018 and February 2019.

Dr Maria Brucoli, smart energy systems manager at EDF Energy R&D, hopes that the Urban Energy Club will inspire “many more” of its kind.

She said:

“Working with UK Power Networks on this new project is the first step to understanding how domestic, local energy markets like this can interact with the grid and flex to match market demands.”

Solar is likely to play a central role in the government’s proposed Future Homes Standard with a preference in new build housing for a more ambitious course of action in carbon emission reductions.

The Ministry of Housing, Communities and Local Government published the consultation on changes to Part L (conservation of fuel and power) of the Future Homes Standard on Tuesday, 1st October 2019. The consultation said that there were two options set to come into effect from 2025 which were outlined for raising the bar on energy efficiency standards in new build homes. The first option would deliver a 20% reduction in carbon emissions via “very high” fabric standards. The second option would deliver a 31% reduction based on both better fabric standards and carbon saving technology such as solar PV.

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