Power generation, distribution, and control are critical anywhere in the world. Interestingly, the more we improve at anything, the more work we have to do. Catherine Pulsifer once made a quote on implied consequences – Life presents many choices, and the choices we make will determine our future. Therefore, as many as choose to solve the problems of energy sustainability must plan to take responsibility for the coordination it requires, even at the communities level.
The Problems LIC (Energy Communities) Solves
One particular sustainable energy source that is very reliable is the use of solar photovoltaic systems. The power supplied by the sun is more than any other source. However, various problems arise from solar power generation using photovoltaic systems.
- Operational challenges – the nature of solar production can be random. This is due to changing intensities of radiation from the sun. The photovoltaic cell produces the appropriate electrical energy each time, but the nonlinear state gives technical issues.
- Overloading of grid components – the produced voltage may not be consumed at the normal rate. This may cause overvoltage in the grids.
- High cost of self-generation – attempting to get power for independent use is expensive. Not only is it expensive, but it also is not profitable for distribution companies and operators.
Most of these problems are solved with the use of smart grids. Smart grids may be complex, but they allow for more efficient energy systems. They make use of technology to improve the communication, automation, and connectivity of power networks. The regulation is also very useful – when less power is consumed, production is reduced.
Also, when power production approaches its peak, there is an automatic regulation. The automation of the distribution process makes it easier to control and maximize the power generated. We minimize losses as a result.
How LIC works
To solve these issues in the public grid for the village of Lugaggia, LIC was set up. The Lugaggia Innovation Community (LIC) by the University of Applied Sciences and Arts of Southern Switzerland (SUPSI) is an excellent step in the right direction. It is a community set-up that aims at onboarding house owners and the kindergarten around them to a smart grid.
Objectives of this project include:
- checking how acceptable the self-consumption communities would be to the community stakeholders
- making use of blockchain to decentralize the management of bills
- evaluating the needs and requirements of the practical LIC
- accessing the potential for local flexibility
- technically observing the effect of flexibility and how it can be exploited.
In order to reduce grid issues, in terms of unbalances encountered in the distribution grid and the accompanying tariffs and taxes, grids have been handled by this LIC. Starting from creating the self-consumption community (SCC), LIC meets the entire community’s pertinent energy needs. It is in line with all the energy ordinances and laws guiding SCCs. It is not enough to produce power; there is more need to get it to where it is needed and for it to be cost-effective.
The Approach LIC Takes
LIC’s resources consist of homes powered by solar panels and their installations (heat pumps and heaters). They are all first centralized using the OptiFlex-Innosuisse (a product by Optimatik, a Swiss Smart Grid solution provider) solution. This is by integrating all outlets in one grid and making use of a district battery. Once this is done, Hive Power comes in to play a vital role.
Decentralized energy management in LIC is done by implementing our community manager module on the Hive Platform. LIC requires this module to achieve a more flexible control. By the use of blockchain technology, the entire process is secured. These processes include sensing, actuation, synchronization, and even payments.
Major Contribution by Hive Power
Grid managers can easily assess all details and overview of the generation and consumption of power in the LIC project using the Hive Power Core Module. Appropriate measurement of energy and monetization is as well performed adequately with the Hive Platform. Once the value is known, it is sent to the blockchain.
The community got operational on October 1st, 2019, and had been experimented on. Some major milestones have been met, but overall, the LIC project has reached the halfway milestone.
Some of the blockchain activities have been set off. LIC has already gotten a second-layer solution using sidechain technology. This solution was developed, implemented, and tested in the LIC in 2020.
Also, the capability to preserve the prosumers’ privacy has been seen to be useful. A dedicated technology (Auditable Tariff – AT) runs at intervals and stores data about the production and consumption of energy on the sidechain.
The goals of the halfway longitudinal study were majorly to examine pilot activities from the users’ point of view and to evaluate attitudinal changes during the activities. In the end, it was seen that there were no major changes when a survey was taken. This survey was taken twice, at the beginning of October 2019 and recently in December 2020. More particularly, the observed effect of the Lugaggia SCC remained stable.
Current Activities on LIC
Tests on electrical water heaters defined as Domestic Hot Water (DHW) and Heat Pumps are currently ongoing. This is to follow up on the actuation tests on the flexibility done in the last part of 2020.
Also, the current work in the LIC is focused on the adaptation of the industrial version of the OptiFlex solution. It is ongoing and will continue till July.
Considering that this is the last year for the LIC project, the plan has been to focus on the industrialized version of the solution given by OptiFlex. That is, the device to be used for centralization. From August till the end of the year, we will be testing an improved version of the algorithm of decentralization. Further tests on the DHWs would also be conducted with more controlled devices.
The LIC is also participating in the PARITY H2020 project, whose trials would begin in 2022. The project would address issues in existing distribution grids. The efficiency promises to be improved.
The approach provided by Hive Power’s solution (decentralized control) would also be extended and utilized in various business and regulatory environments.
Let’s start with a defining statement for microgrid systems; they are self-sufficient energy systems that cater to energy needs for a small geographical area, they can have one or more kinds of energy sources such as solar panels, heat sources or wind turbines and even contain an energy storage solution, for example, batteries.
Their primary purpose is to produce sustainable power for an allocated area. These areas can be hospitals, campuses, business centres and small neighbourhoods. Microgrid systems are discussed in association with renewable energy, mainly because that is the type of energy being developed in recent years. They happen to do better than large scale grids that cater to larger populations from fossil fuel sources and are becoming increasingly accepted.
Microgrids work in an interconnected way, providing energy to buildings in the form of electricity, cooling and heating through software and digital control systems. Its major characteristics include:
- being local, which means it provides its services to nearby customers
- being independent, which means it can be disconnected from its central grid yet still function at 100%, this comes in handy in times of central outages and lastly
- being intelligent, which is a result of advanced software and management systems.
With the efficiency of microgrids, there is a pertinent need to measure their energy demand and supply, which is where Demand-Side Management comes in.
What is Demand-Side Management (DSM)?
Demand-Side Management can be explained as the “group of actions designed to efficiently manage a site’s energy consumption to cut costs incurred for the supply of electrical energy, from grid charges and general system charges, including taxes” according to Enel X. These actions are necessary for optimising energy use and saving costs on electricity charges by understanding the overall consumption costs, the amount of time this consumption occurs, and the supply and connection parameters.
Demand-Side Management is enshrined in the instability of grid systems around the world since renewable energy sources are highly penetrable including the decentralisation of their production, these cause innumerable disruptions on the microgrids and grid management services, a balance is therefore needed.
The demand and supply balance is a significant worry; the amount of energy created and fed into the grids has to match the consumption habits. Grid managers can now create energy management systems to offer grid services that are paid for, which in turn increase the costs for the electrical system.
In-depth on-site analysis has to be carried out on individual microgrid sites to properly engage in Demand-Side Management to ascertain the generation and consumption habits of customers.
All the measures used under Demand-Side Management are implemented on the generation side of the energy meter to modify consumption patterns and enable efficiency in using and managing energy loads. The measures don’t only involve energy efficiency but also something else called Demand Response (DR).
Demand Response is a technique that microgrid managers use to balance out sudden surges or plummets in consumers’ consumption of energy. DSM program participation, for now, can be voluntary or mandatory for consumers, for those that decide to volunteer, there are attractive incentives to encourage more participation. Some regulations have been introduced by most energy (electricity specifically) regulators that have encouraged the integration of Demand-Side Management at their facilities, an attempt at a level playing field for DSM.
What are the Advantages of DSM?
As referenced earlier, the major advantage of Demand-Side Management is saving and reducing unnecessary energy losses. These are the direct benefits. The indirect benefits include reducing the frequency of blackouts and the mitigation of emergencies that have to do with the energy systems.
To understand the advantages and disadvantages of DSM, it is imperative to compare it to other alternatives (Supply-Side Alternatives) such as energy generated via renewable energy, the power generated via fossil fuels, load shedding and peak power plants. It is imperative to note that Supply-Side Management deals with energy management on the other side of the meter regarding supply, the polar opposite of DSM.
|Energy via Renewable Sources||
|Energy via Fossil fuels||
|Peak Power Plants||
Advantages and disadvantages of DSM, in comparison to other alternatives. Source: Science direct
Here is a comparison of DSM’s advantages from the consumers’ perspective (customers and society) and power utilities. Source: Science Direct
|Reduced cost of operations||Energy bills are reduced due to energy-efficient equipment.||Greenhouse gasses reduction because fossil fuel power plant constructions aren’t needed|
|Reduced expenses on building power plants, costs of transmission and distribution||Power cuts are reduced, and the power supply is more reliable and stable.||Power distribution is equitable due to less disruption of power|
|Operations run efficiently||Customer satisfaction and reduced maintenance costs for energy-efficient appliances||The promotion and development of sustainable energy and efficiency in the conversion of renewable energy sources|
Demand-Side Management with Microgrids allows grid managers to observe how both systems perform in the transformation of conventional microgrids to those that run on renewable energy and how the Management of demand-side can help with the instability of renewable energy sources; how they can work with renewable energy storage systems and how they can be improved on for efficient utilisation and consumption by customers. Our Community Manager module is integrated with blockchain technology that can enable you to utilise DMS effectively and efficiently.
Solar power leads the way as the most popular form of renewable energy in the European Market. With a 36% increase in installations from 2017 to 2018, the adoption of solar technology is on the rise. This trend can be attributed to the drive to meet the EU 2020 targets.
EU 2020 Renewable Energy Directive
In 2009, the EU states set targets to generate at least 20% of their energy from renewable energy by 2020. In this move, the EU defined various support schemes for member countries to cooperate in achieving their targets.
The Cooperation Mechanism is one of the EU 2020 support schemes. It employs three approaches to help members meet the Renewable Energy targets. These include;
- Joint Projects
- Joint Support Schemes
- Statistical Transfers
- The Joint Projects mechanism allows two or more EU countries to co-fund a renewable energy project. They can then share the power generated.
- The Joint Support Scheme mechanism involves the development of schemes such as a common feed-in-tariff. The programme would promote the production of renewables in two or more EU countries.
- Statistical Transfers were designed to level the playing field. Naturally, renewable energy resources are not equally distributed across Europe. As such, member states can buy shares of a renewable project from a resource-rich country. The energy shares are deducted from the producing country and added to the supporting country’s energy portfolio.
These cooperation mechanisms are deployed on a macro level. They involve major policymakers, national energy regulation, transmission companies and energy producers. The concept of working together to meet renewable energy targets has trickled down to the community level. Here, Energy Communities have been formed to help regular citizens to own a share of a solar energy project.
Regulatory Victory for Energy Communities
Following the Paris Agreement, the EU began reviewing its energy policy framework. This framework would facilitate Europe’s transition to low-carbon clean energy. Between 2016 and 2019, the EU developed and refined the Clean Energy for all Europeans Package.
The Clean Energy Package contains specific elements that promote the rights of energy consumers. The new regulations support the generation, storage and sale of energy by individuals. They are especially beneficial for the growth of energy communities in Europe.
What is A Solar Energy Community?
Energy communities are societies that come together and pool resources for the co-ownership of solar energy projects. They can be made up of individuals, small businesses, companies, municipalities and cooperatives, among others. They allow average people to own a share of a solar energy plant.
People mainly join energy communities to reduce their utility bills. They are also interested in participating in the renewable energy revolution. As individuals, most energy community members face several limitations to build solar projects. These include lack of capital, space and property.
Many participants of energy communities live in rental homes. As such, they cannot install home solar panels or benefit from the incentives of solar affords homeowners.
How Do Energy Communities Work?
Energy communities can be structured in various ways depending on the region’s regulatory landscape. In some cases, the community members live near the project site. These members can consume the energy generated directly, which is the typical setup in off-grid locations characterized by mini-grids.
However, in most parts of Europe and North America, an extensive grid network is already established. Here, energy communities can finance new grid-connected solar power plants. Members then earn net metering or solar credits, and they can use these credits to reduce their monthly utility bills based on the amount of electricity generated and the member’s share in the energy community.
Solar is attractive for energy communities because it is a low-cost solution that is scalable and readily available. The communities calculate their solar credits through a Virtual Net Metering (VNM) system. The VNM enables you to earn Net Metering Credits from a solar energy system that you didn’t connect to. As long as your grid provider buys the energy generated by the solar plant, you can earn Net Metering Credits.
Are Energy Communities Good For Solar Projects?
Energy communities create an avenue for new players to participate in the transition to clean energy. The European housing statistics indicate that approximately 42% of Europeans lived in apartment blocks in 2017. Meaning that, regardless of financial capacity, almost half the population don’t own roofs to install rooftop solar projects.
Through energy communities, people who were conventionally left out can now acquire solar energy assets. Here are various ways in which the energy communities can lead to higher solar sales.
Faster Transition to Clean Energy
Unlike the conventional solar home system format, energy communities support a more active uptake of solar energy. Energy communities connect multiple customers per project. While the power generated may not be for direct self-consumption, each member of the community has a share in it.
As you approach utility-scale, solar energy community projects have the advantage of quick adoption. These systems acquire land rights and social acceptance much faster than typical utility-scale solar projects. This pattern is because most of the decision-makers in the community have a stake in the project. The energy community members are usually well informed about the project, allowing the developers to focus on the implementation of the project rather than gaining social acceptance.
Overcomes Grid Limitations
In remote or rural settings, the national grid may not reach every potential customer. The cost of grid expansion is also high. Also, the challenges of upgrading weak networks for demand-side management can limit the connectivity of new projects.
Energy communities can employ smart mini-grids to connect consumers. This step avoids straining the existing grid system. The mini-grids can also connect and feed solar power to the grid directly. High-quality mini-grids with adequate net metering infrastructure reduce losses and maximize the revenue for grid-connected solar projects.
Improved Energy Storage Management
It is challenging to ensure the uninterrupted supply of electricity on the national grid. Energy communities can facilitate Community Energy Storage (CES) solutions. Collective energy storage solutions are easier to manage and maintain than in individual homes.
Energy storage is a vital component of solar energy systems, and they reduce the load and reliance on the grid at night while community solar plants with integrated energy storage provide well-balanced uninterrupted power supply options.
Cost-Effective Solar Solutions
Energy communities enable more people to overcome the investment barriers involved with solar energy projects. The high initial investment costs are among the most significant obstacles to the integration of solar projects.
Energy communities allow members to share the cost of developing a solar project. This action lowers the entry cost for each individual and makes the project more attractive.
Development of Smart Grid Technology Markets
The new EU energy policy encourages the development of decentralized energy generation. In the past, independent power producers were either small individual homes or utility-scale solar projects. Energy communities create a demand for innovative smart technologies in the solar energy space.
Energy communities need dynamic digitized solutions to monitor their solar power systems. These solutions are necessary for data analysis, system optimization and report generation for the energy community members. Advanced analytical solutions are also required for net-metered systems that generate solar credits for the community’s shareholders.
The deployment of energy communities creates an opportunity for unmatched growth of solar energy in Europe. Enabling people who live in flats to participate and co-own solar projects almost doubles the potential solar investors in the EU. Integration of energy communities can accelerate the efficient development of solar projects across Europe.