Microgrids: Will peer-to-peer electricity change energy as we know it?
By Contributor on May 10, 2016
Imagine you and a handful of your neighbours all get together and decide your electricity bills are too high. You’re tired of the price-gouging from your local utility. Maybe you’ll just live off the grid. After all, with solar panels achieving higher and higher efficiencies, the power company is looking less like a necessity and more like an over-priced dinosaur.
One of the major challenges for solar right now is the price—a decent sized system will run you tens of thousands of dollars, just for equipment alone. Factor in installation fees, sales tax, and maintenance costs, and the cost jumps considerably, especially for a system large enough to handle 100% of a home’s energy demand.
Yes, there are rebates from the federal government, and often additional incentives as well, but in most cases, you’ll get them only after you file income taxes, so depending on when you buy, it could be months before you even see a cent. The high startup costs keep solar out of reach for many, at least for now.
That’s what makes the appearance of microgrids so tantalizing. Right now, the majority of households are connected by a single network. This massive grid makes it possible for power companies to transmit energy at a higher voltage—i.e., more efficiently—which lowers their overall costs.
However, using smart grid technology, it may be possible for residents to balance energy demand on their own, completely autonomous from the larger network. Under these setups, connected users would share system costs, or, in a different iteration, those who could afford a solar array would sell sustainable energy back to their neighbours using a peer-to-peer trading system.
That may sound a little hippie-dippie at first blush, but consider this: even the U.S. Department of Energy admits that microgrids can reduce blackouts. When energy generation and distribution is localized, it can lessen the impact of an emergency, containing the damage to one area. They’re often used to power large, important facilities where a blackout could be critical, for instance, in the Santa Rita Jail.
The vast majority of microgrids currently under operation are experiments in public facilities or in communities, and they’re run by a few forward-thinking public utilities rather than individual citizens.
However, residential peer-to-peer electricity trading still may be where energy is headed - networks of smart meters have been placed in communities over the past ten years, making it possible to create the “Uber for Electricity” - an alternative energy distribution system that relies entirely on sustainable energy.
Late in 2015, a German system called Sonnen was announced, the latest attempt to launch a peer-to-peer energy trading system. Creators say that they expect the program to take off over the next 10 years, at which point their hope is to become competitive with conventional utilities.
Whether or not it will really hinges on developments in battery technology. Solar cells may demonstrate greater efficiencies than they did years ago, but their effectiveness is still tied to fluctuations in sunlight, and as anyone who’s ever planned a wedding or a camping trip knows, the sun can be very fickle indeed.
Nighttime shuts down electricity generation entirely. To avoid these kinds of dips in productivity, solar proponents and manufacturers need to find an alternative solution that can draw on saved power when production drops. That means finding an efficient residential solar battery.
And while Elon Musk’s company SolarCity has pushed forth a residential battery model called the Powerwall—claiming it could provide backup energy for 10 hours—the initial release was a bit underwhelming (a revamped Powerwall 2.0 is now set to reach the market in summer 2016).
Just because there’s no elegant solution now doesn’t mean that there won’t be one five, 10, or 15 years from now. And that would be a huge upset to utility companies, shifting power creation into the hands of individual companies and households.
Large solar installations are so effective that in California where initiatives by the California Public Utilities Commission have made solar power hugely popular, electricity generation numbers were so great that public utilities had to ask solar farms to temporarily cease operations.
With an alternative purchasing model in place and access to a powerful battery, we could be witnessing the dawn of an entirely different version of energy distribution—one where consumers, rather than companies, will be the movers and shakers.
By Erin Vaughan
