University of Bath
Owning to rapidly decreasing cost of low carbon technologies (such as PVs, electric vehicles), their increasing deployments will pose significant risks to the security of supply. This is because these low carbon technologies are largely deployed at customers’ premises, operated and controlled entirely for individuals’ needs. If not properly coordinated, i.e. energy storage charges at the peak times, energy generated by PV is not used locally, these low carbon technologies will add further pressure to the already stressed supply system.
It is critical to have a decentralised philosophy in the supply industry so that individual’s decision making will not only meet their needs but collectively will improve the security and affordability of the supply system.
My approach to this challenge is to introduce sharing economy through developing distributed energy markets. Essentially, I advocate a horizontal energy supply, providing the right market environment for local communities to trade energy horizonally among themselves. The market environment is to increase demand for renewable energy, increase value for renewable generators, and reduce uncertainties.
I have developed a number of distributed markets, closely reflecting generation, demand and uncertainty conditions that are typical for urban, rural and suburban systems. The key challenge in these market development is to determine the right energy products to buy and sell, where energy products will change with time, location and weather conditions to dynamically tracking local supply and demand flexibility.
Our initial results indicated that if the UK has wide-spread distributed energy markets that truly reflect local conditions, then for a typical high demand half-hour period (67GWh), the wholesale energy price can reduce from £151/MWh down to £68/MWh, energy cost from £10m to £4m.
In the future, dynamic supply and demand curves will be developed for achieving multiple supply and demand equilibria.