Alectra Utilities is powering a renewable energy breakthrough
The secret to Vikram Singh's popular renewable energy pilot? Blockchain.
Photo by Karsten Würth (@inf1783) on Unsplash
Vikram Singh figured his customers might respond positively to a new renewable energy pilot, but the unbridled enthusiasm he encountered when he introduced it to them caught him by surprise.
“Customers were literally showing off our interface at dinner parties: the system, the battery, how they could see the amount of energy consumption go up in their house if they turned on a washing machine,” said Singh, the director of advanced planning at the Canada-based Alectra Utilities, the second-largest municipal utility in North America. “We’re just not used to that level of engagement from customers.”
The pilot that ignited that passion is Power.House, an intelligent storage solar system for residential customers that includes rooftop PV panels and a lithium-ion battery installed behind the meter. The systems are autonomously controlled through software to simulate a larger power-generating facility. The pilot began with just 20 homes, but Singh said it could eventually expand to include up to 30,000 homes.
In addition to protecting against outages, Singh believes Power.House will help customers save money on their energy bills by making them both producers and suppliers in a distributed energy resources network. By generating their own energy, he said, customers can send surplus power back to the grid for additional credit.
These days, Singh said, customers want more choice and autonomy, and are “relying more on taking their energy generation and consumption into their own hands, especially with an increase in hazardous weather.”
But if thousands of residences, factories, farms, and businesses start producing and selling energy, things can get very complicated. To ensure the accurate and safe documentation of a growing number of energy transactions, forward-looking utilities like Alectra are beginning to look to an emerging digital technology: blockchain.
“The energy services market is in an ideal position to benefit from blockchain technology,” said Singh. “It’s this value chain that has a bunch of intermediaries and complex exchanges of information across a completely distributed network of market participants.”
In the Power.House pilot, blockchain technology provided by IBM allows each unit of electricity to be traced from the point of generation to the point of consumption using the local electricity distribution network. It combines a tracked energy transaction with a financial transaction, making the process simpler and safer. And it can remedy any challenges with an open, transparent, and timely exchange of energy for value.
“Trust, visibility, and transparency are fundamental for the efficient functioning of the market,” Singh said. “It also allows us to integrate energy systems with secondary systems like financial services systems.”
Blockchain’s arrival coincides with the shift of energy generation from large-scale power plants to a network of super-smart and super-clean energy sources. It also coincides with the rise of microgrids, which are smaller grid systems linked to localized power sources often called DERs. By 2021, experts estimate, off grid energy will reach cost and performance parity with grid-delivered energy.
Under the right conditions, an Alectra release notes, the energy generated by this virtual power plant could “result in the potential to defer energy infrastructure investments by at least two years in the late 2020s.”
“We will rely less on deploying hardware and capital in the field and move more toward a market-based approach for procuring energy services,” Singh said.
At a time when smaller startups are nibbling at the bottom line of larger utilities, Singh said, companies like Alectra have the potential to lead the way in the renewable energy sector due to their incumbent “trust” advantage.
“In a fractured renewable energy market, there are a lot of young startups that show up and then disappear,” Singh said. “Utilities are in a unique position to bring a lot of credibility to the renewable sector, especially as many customers still see it as a fringe concept. They’re seen as a trusted advisor and authority that is able to communicate to customers when other service providers or other technologies are equally trustworthy.”
Utilities should be flexible when catering to the evolving needs of their customers—even if that means investing in distributed solutions over traditional infrastructure. The success of the Power.House pilot has provided that important lesson for Alectra’s CEO Brian Bentz.
“As a utility, I should be as agnostic with a behind-the-meter, sustainable, customer-empowering solution as I am with poles and wires,” Bentz said. “In fact, I should probably favor the former more than the latter because it does empower consumers and it’s more sustainable, assuming economics are relatively close.”
In the Power.House pilot, technology provided by IBM Blockchain allows each unit of electricity to be traced from the point of generation to the point of consumption using the local electricity distribution network.