Given the National Energy Market (NEM) energy crisis, Australian energy trading company Powerledger is urging regulators to consider Local Energy Markets (LEMs) as part of the solution for Australia’s energy transition. LEMs enables participants to trade energy amongst each other, which helps in limiting both import and export to the bulk electricity system.
LEMs create the market mechanisms for households and businesses to invest in renewable generation and storage, virtual power plant plant and equipment and even appliances, with excess energy supplied to neighbouring homes and businesses. Having the flexibility to buy and sell renewable energy, when desired, makes these homeowners and businesses ‘Flexipreneurs’.
“LEMs are a new bottom-up energy system that could significantly reduce the cost of energy transmission and renewable energy curtailment if managed correctly – and therefore keep energy costs down,” said Powerledger Chairman and Co-Founder, Dr Jemma Green.
By creating the right regulatory and market mechanisms that enable local households, schools, shopping centres, and industrial buildings to be Flexipreneurs, they can generate, store and sell excess energy which could be an important part of the solution to resolving Australia’s energy demands.
This avoids the spend on remote large scale generation and significant transmission costs (e.g. substations, poles and wire upgrades).
“Flexiprenuers aren’t experts in electricity generation, but they have roof space and can see potential to be paid for their excess energy. Many businesses could get a revenue source from their investment in solar generation and battery shortage – capable of generating many hundreds of kiloWatts of electricity to sell into a LEM,” said Dr Green.
“Even a large retail company with a cold storage distribution industrial building only needs a third of the roof space for their energy needs and could sell the rest to the Grid. If they had a battery they could sell excess in high demand times and make more money!”.
Allowing Flexipreneurs to trade into a LEM would offer a unique non-network solution, that will defer and avoid network augmentation, facilitate load growth, support penetration of renewables on the grid, and deliver lower costs to the market and connected customers – a smarter, faster and fairer strategy for Australia, according to Powerledger.
“Creating a market in which dynamic pricing signals underpin the market, Australia could do away with the current Flexibilities model in which long-term standby contracts are created at fixed prices. This hasn’t worked and it’s time to rethink the policy settings,” said Dr Green.
According to AEMC, the largest generator in the NEM is now owned collectively by customers – Distributed Energy Resources (DERs).
The NEM participants and governments should grab this immediate opportunity – that will only increase with more electric vehicles and smart appliances and equipment.
“This local solution is the perfect way to engage energy users and reward them for contributions to the Grid which is our common-wealth!” said Dr Green.
