In my previous post on premium electrons I touched on the challenges of innovating in the electricity sector, using Tesla’s products as an example. Another critical aspect of achieving the clean distributed energy vision is collaboration. The delivery of energy units to consumers requires companies of all varieties, supported by individuals across the full spectrum of skills. It stands to reason, then, that the delivery of innovative energy products and services will be accelerated through collaboration — across sectors and timezones.
In their vision of Shared Value, leading competition theorists Michael Porter and Mark Kramer point to the idea of “co-opetition,” or collaboration on pre-competitive factors, as a key way to develop and deliver value. Open source technology is a great example of this at work, with much of the infrastructure of the web built by people across sectors and business realms. The antilog to this is the sorts of technology wars which have ended in poor customer outcomes (think VHS and betamax, Windows and Mac OS) so wherever possible let’s learn from these mistakes and collaborate our way to better products and services.
This ethos is in part what makes us excited to be a project partner on the deX platform, launched last week in Melbourne. The deX (decentralised energy exchange) is a platform operated by demand response and distributed energy veterans, Greensync. In short, the deX is a marketplace which streamlines the process of connecting distributed energy resources (DER) such as batteries and controllable loads (like smart air conditioners) with those who seek to mobilise those resources to reduce costs and improve resilience.
Whaa? How?
The team behind the deX describe it thus:
“Conceptually, deX is an open exchange where energy capacity can be transacted between businesses, households, communities and utilities.
Practically, deX is a software platform that helps to drive coordinated development implementation of distributed energy resources (DERs) like solar panels and batteries into electricity markets.
Functionally, deX brings DERs online to deX participants, making them visible in the network and dispatchable when required. Agreements can be formed and capacity from DERs can be aggregated.”
Resource aggregation increases the value of DER that can be offered via the deX. This allows many disparate resources on the grid to be visible to the deX and orchestrated as one large, flexible resource. For an explanation of how this works check out our series on aggregation which explains that these aggregated resources are worth more than the sum of their parts, since they are of great value to networks (poles and wires businesses), and energy retailers who seek alternative solutions protect themselves from volatility in wholesale energy markets. The deX allows those utilities to access DERs whilst delivering value, in the form of financial returns, back to the owners of those resources. This could be your neighbour’s rooftop solar+battery system, or an industrial business using energy intensive processes, both of which can reduce consumption in the height of summer to relieve the stress on the system.
It’s a vision of a more economically efficient and effective energy system but to get there we need many industry players to work together. In addition to supportive regulation, we need:
- a marketplace for exchanging value (the deX)
- individuals with DERs to offer
- utilities who are willing to try innovative approaches
- operational processes for participating in the exchange
- aggregators to orchestrate DERs
- data, data, and more data
Two projects have already commenced to put this collaboration into practice. One is in the ACT and another is on the Mornington Peninsula, a popular summer holiday location near Melbourne which sees very high summer time demand, placing stress on the network.
The beauty in the deX project is the collaboration of many parties who fill these required roles. Representing at the launch of the project last week were some of the largest energy companies in Australia, as well as some of the smallest. The collaboration has network businesses, retailers, integrators such as our business—Nexergy, hardware and software vendors, as well as regulatory and research bodies. This is the sort of project that can facilitate standards and interoperability which are imperative for reaching the energy goals we need to.
Together, we’ll set the bar for how DERs can be integrated into the system, which will inform other jurisdictions and offer solutions to the “energy trilemma” of affordability, reliability and sustainability.
Posted by Darius Salgo, CEO of Nexergy.
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