PEER-TO-PEER ENERGY TRADING SOLUTION LOOKING FOR A PROBLEM OR THE PLATFORM FOR THE ENERGY MARKET OF THE FUTURE?
PEER-TO-PEER ENERGY TRADINGSOLUTION LOOKING FOR A PROBLEM OR THE PLATFORM FOR THE
ENERGY MARKET OF THE FUTURE?
OVERVIEW
The changing energy system; where the energy model is heading
and why it’s heading there whether we like it or not.
The risk being left behind.
Risk of incumbency – what have we got to lose from consumer-led
changes to the industry?
Blockchain enabled P2P – the argument for the blockchain.
Power Ledger experience to date.
THE PHYSICAL VALUE CHAIN… AS IT WAS
Courtesy of Western Power
NEW GENERATION IN AUSTRALIASince 2011, more new generation capacity has been installed on Australian rooftops than has been connected
to transmission networks across Australia. A combination of government subsidy, postage stamp pricing and
incentivised feed-in tariffs has seen more than 1.6 million Australian households to install roof-top solar
panels with capacity exceeding 5GW.
From Australian Clean Energy Regulator (PV uptake graph excludes WA households ~ 230,000)
AND THE FORECAST?Despite the reduction in upfront subsidies and the winding-back of generous feed-in tariffs, the AEMO forecasts
the number and size of roof-top PV installations to grow. Not only that, with the falling price of distributed
(behind the meter) storage, consumers are expected to become increasingly self-sufficient when it comes to
managing their own power needs.
From AEMO’s ESOO 2016 (WA)
LOAD DEFECTION: SOLAR AND BATTERIES
45% load defection 97% load
defection
IMPACT OF DECLINING NETWORK UTILISATION (WA)
Additional displaced network energy represents 8% - 16% of energy currently served to small business and
residential customers (RT1 – RT4 tariffs) in WA. This group accounts for $1,104 million of network revenue
for 2016/17 (out of a total of $1,520 million)
Assuming current tariff structure retained, revenue leakage would be $54 - $112 million, alternatively, the
variable network tariff would increase 10 – 22%. For Synergy, WA’s State-owned retailer the potential loss of
sales equates to approximately $350 million per year (inclusive of network charges).
IMPACT OF DECLINING NETWORK UTILISATION (NSW)
In NSW, where the uptake of PV has been slower, the rate of load defection is slower, however as PV and
batteries reduce further in price and retail energy prices increase, consumers who adopt roof-top PV are likely
to also include behind-the-meter storage systems at the same time.
WHAT’S CHANGED, WHAT HASN’T…?
Energy system is no longer linear…
Prosumers play a role in planning and deploying generation…
Networks are no longer monopolies…
Prosumers sell electricity…
WHY WE NEED TO ACT
Load defection leaves vulnerable customers at risk of power
poverty.
Strata-titled developments don’t invest in roof-top PV.
Community-scaled renewable generators don’t always have the
scale or sophistication to deal with the energy market.
A SOLUTION – THE NETWORK AS A TRADING PLATFORM
Consumer-focused P2P trading platform that settles trades across
the distribution network at predetermined intervals.
The economic benefit to consumers will actively encourage new PV
up-take, reduce consumers’ power bills and reduce emissions.
Reduced load defection preserves the value of network assets.
Trading platform provides product development and customer
service opportunities.
WHY A BLOCKCHAIN?
Fast, cheap, secure, transparent settlement of multi-party transactions.
Formation of dynamic trading ecosystems.
Development of autonomous, secure and transparent distributed trading
markets with low-cost and virtually instantaneous market reconciliation
and settlement.
Trading arrangements between any number of counterparties where
each counterparty is able to trust the trading environment is free from
the interference or interpretation of any other counterparty.
THE POWER LEDGER TRADING PLATFORM
•Secure interface for consumers to buy and sell energy. Supported by existing banking infrastructure
and transaction products. Supports real-time payment of retailer, network and other charges.
Transaction Layer
•Smart trading engine that matches demand with available generation in each discrete trading period.
Ties a physical energy transaction with a financial transaction within each trading period. Supports the
allocation of value to the owners/investors in distributed system assets.
Trading Layer
•Provides the trust in the system. Provides an immutable record of all generation, consumption and
trade. Auditable, immutable and permanent. Provides data to the market on off-market transaction
(net trading position). Supports reporting and data management obligations.
Blockchain Layer
LEARNINGS FROM NLV BUSSELTON
Diversity it key to a liquid trading market.
Keep it simple.
The benefits are real.
Equitable access is achievable.
A software solution is achievable.
Dealing with data is time sensitive.
LEARNINGS FROM THE STRATA MARKET
Owner/occupiers want certainty.
Strata managers want simplicity.
Multiple investment drivers and scenarios exist.
Strata properties can be a big contributor to decarbonisation of the
energy system.
LEARNINGS FROM TRADING ACROSS THE REGULATED NETWORK
Network is an enormously important social asset.
Regulations don’t contemplate P2P trading.
P2P trading is achievable without massive change.
Developers are looking for work arounds.
POWER LEDGER
Built Australia’s first blockchain-enabled power
meter 08/2016.
Australia’s first blockchain-enabled peer-to-peer
trading trial – commenced September 2016,
successfully concluded January 2017.
Commenced trial of P2P trading across the
distribution network with Vector in NZ – Jan 2017.
Behind-the-meter trading product in deployment as
part of WGV project in Fremantle, WA.
Have a market-ready strata product
Developing a dynamic distribution market product.
THANKS FOR YOUR TIME, ANY QUESTIONS
?