Opinion Piece: P.K. Agarwal, Former Director & CISO, POSOCO Ltd
Commercial and Industrial (C&I) customers are distinctly dependent on a reliable supply of electric energy for their productions or services. Any interruption in the electric supply leads to the loss of production and, consequently, revenue loss. Traditionally they have only the option to put up their captive power supply to fill in the gaps due to electricity interruptions. However, captive supply is costly, generally 2-3 times the cost of the grid supply.
For over a century, the electricity grid has been a top-down business with utilities and big power generators sending electricity to the customers. But with the proliferation of roof-top solar and distributed solar (D-Solar), C&I customers are finding a viable alternative to meet their energy demand and have extra earnings by peer-to-peer trading surplus energy. In India’s present regulatory regime, consumers putting roof-top solar and having surplus electric energy have two options. One is to put back surplus electricity in the grid and either adjust it to their annual consumption or get a preset cost that is generally much lower than grid energy. Another option is to sell the surplus in OTC (Over the Counter) market or power exchange. But access to both has overheads and is difficult for small customers.
Though large scale installations account for 87% of solar power generation, today the adoption rate of solar rooftop panels is accelerating. The installed capacity of solar rooftop augmented from 117 MW to 1922 MW from the period between 2013 to March’ 2020.
Taking this immense growth into consideration, the Ministry of New and Renewable Energy through its National Solar Mission Of India has set a target of 40 GW power through rooftop solar by 2022. Though this target may seem ambitious, it is still achievable.
With the increasing penetration of roof-top solar or distributed solar plants, the grid is transforming to a fast-acting transactive grid at the grid edge. The transactive grid is where you can pay somebody to inject energy into the grid by turning things off or discharging a battery, paying somebody to start up generation at the right time, and sending the economic signals to get people to do desired actions.
Peer-to-peer trading is an integral part of the transactive grid earning money to the owner whenever they have economic signals or low consumption and procuring electricity from the other consumers, which is generally cheaper than the cost of grid supply time when they require more.
The beneficial impact of household PVs in reducing network losses and effectively augmenting capacity by pushing electricity back into the grid in the opposite direction to the predominant flows is significant. It will further fuel the proliferation of distributed solar.
The peer-to-peer initiative in Uttar Pradesh state in northern India and India Smart Grid Forum (ISGF) has launched blockchain-based peer-to-peer trading with its first 12 participants, nine customers with roof-top solar PV, and three other customers without who will be the net buyers.
“This pilot project will demonstrate the feasibility of roof-top solar energy trading through smart contracts on the blockchain platform between prosumers with their neighbouring households”, says ISGF President, Reji Kumar Pillai.
The pilot project’s results and recommendations will be submitted to UPPCL and the Uttar Pradesh Electricity Regulatory Commission for consideration for framing regulations to promote P2P trading of roof-top solar power amongst prosumers and consumers in the state.
The learning from the pilot will pave the way for the enabling regulations for peer-to-peer trading in India. And will further pave the way for distributed roof-top solar creating a win-win situation for all: the owner of the plant, C&I customers, utility (by way of reduction in network loss and efficient imbalance handling.