Local energy trading market launched on Orkney islands

A trial focused on delivering real-time trading between renewable generation and local grid flexibility on the Orkney islands has been successful, with project lead Electron noting that more than 1,300 trades have been completed as part of a demonstration projected.

The project will now focus on bringing more parties into the LEM

The project will now focus on bringing more parties into the LEM

The BEIS-funded project TraDER is being led by Electron to bring generators and renewable assets together in a local energy marketplace (LEM) to overcome curtailment of renewable assets and generators when their outputs are lower than what they should be.

More than 1,300 trades have taken place on the Orkney islands, which is a favourable location for wind development in particular. However, the efficiency of assets and the grid is still a challenge and the LEM can help resolve grid congestion, reduce waste renewable power outputs and lower consumer bills in the region.

“We believe that coordinating national price signals with local grid requirements is absolutely key to maximising the incentive for local flexibility to come online and, in turn, enabling the zero-carbon grid,” says Jo-Jo Hubbard, Electron’s chief executive.

“Moreover, the more we see negative national electricity prices, the faster we need a solution that ensures that this does not disturb grid resilience at a local level. We believe that this is the first multi-sided local marketplace that actually affects the physical flow of power and brings more zero-carbon, zero marginal cost power online, and we are thrilled to be working with our TraDER partners and the engaged community of Orkney to make this happen.”

Project TraDER brings together the consortium of Electron, Community Energy Scotland, CGI, EDF, Elexon, Energy Systems Catapult, Kaluza (an OVO Group company) and Scottish and Southern Electricity Networks. The project will now focus on bringing more parties into the LEM.

Research suggests that improving the grid infrastructure in the Orkney Islands could increase revenue from existing wind developments by £2.7m a year.

Additionally, a new ComRes Poll shows that the overwhelming majority of Orkney residents back the developments of renewable energy projects in the local region. The survey, commissioned by the Orkney Renewable Energy Forum (OREF), noted that almost nine in 10 residents support renewables growth on the islands.

The news comes after the Government reversed its stance last November on a long-term agreement to deliver investment in low-carbon technologies in Orkney, preventing these projects from competing in upcoming Contracts for Difference (CfD) rounds. 

LEM growth

Other LEMs have been trialled across the UK. Centrica, for example, launched trials to examine how blockchain technology can assist with multi-party peer-to-peer energy trading for 200 businesses and residential participants in Cornwall.

Centrica’s LEM has been operating since 2017 and has seen solar and battery systems installed into 100 homes across Cornwall, while more than 125 local businesses have been fitted with similar technologies and monitoring equipment.

Centrica revealed that the local DSO, Western Power Distribution, and the Transmission System Operator, the National Grid’s Electricity System Operator, have simultaneously procured flexible energy from the system via a third-party platform.

Matt Mace



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