Unpacking Electricity Cost Structure

Blockchain enabled technology for microgrids

Presenter

Vinod Tiwari4 Sep 2017

WA Electricity Market

The Wholesale Electricity Market (WEM) for the South West Interconnected System of Western Australia (SWIS) commenced operation on 21

September 2006

The WEM aims to facilitate competition and private

investment

SWIS and WEM

Source: https://www.perthenergy.com.au/about-us/driving-electricity-market-reform/

SWIS Grid - SWIN

The South West Interconnected System

(SWIS) incorporates over 7,800 km of

transmission lines.

>$6 Billion was transacted in 2015-16.

There are more than one million customers

in the WEM.

5,798MW of registered generation capacity, including 513 MW of

non-scheduled generation

Energy Trading Mechanisms in WEM

2004

In order to implement the WEM in accordance with the Market Rules, the Independent Market Operator (IMO), a government body, was established in 2004

to oversee its administration and operation.

30 Nov. 2015

Following a government review, on the 30th November 2015, the Australian Energy Market

Operator (AEMO) assumed control of the operation of the WEM

Short Term Energy Market (STEM)

Electricity Cost Structure

Typical Example

Energy: approx. 25%

Network Charges: approx. 40%

AEMO Capacity charges: approx. 25%

Renewable Energy: approx. 8%

Others: approx. 2%

What is a microgrid

A microgrid is a localised grouping of distributed electricity sources, loads and storage mechanisms that can operate both as part of the central grid or independently as an island

A microgrid can be powered by distributed generators, batteries, and/or renewable resources like solar panels, wind, diesel etc. Depending on how it’s fueled and how its requirements are managed, a microgrid might run indefinitely

It is a locally

controlled system

it can function both

connected to the

traditional grid

(megagrid) or as an

electrical island

Smart Grid

Smart grid is a term given to the modernisation of

electricity networks. These grids allow utilities to access more information and provide better demand management.

By connecting communication, controls, computers and new

technologies together, a smart grid also makes electricity

supply more efficient, secure and environmentally friendly.

What is the blockchain

- A database (ledger) that no one is in control of but

is very secure

- It can be used to process transactions, act as a

hallmark or track provenance

- Information in the ledger is held in nodes

(computers) and to change an entry in the ledger,

majority agreement (consensus) of the nodes is

required

- Uses cryptography

Traditional vs blockchain databases

Microgrid -

Remote

Power

Systems

Customer

Microgrids

Virtual

Microgrids

Set up Microgrid as a Utility

• Embedded

network

arrangement

• Solar powered

apartments

• Behind the meter

billing, peer to

peer energy

trading

Peer to Peer Energy Trading

Billing and Trading

Consumer becomes Prosumer

Energy can be traded at Peer to Peer (P2P) or Village to

Village level

Blockchain will record flow of energy

Smart metering

Billing (pre – paid, pay as you go or post pay)

Microgrids for Africa With Africa’s push for rural electrification, microgrids — especially those that

use renewable energy rather than expensive, polluting diesel generators – are

fast becoming a cost-effective way to extend electrical service.

Small-scale options, commercialized by the private sector, may be the only

way forward where there are shortcomings in public policies or institutions,”

according to the International Energy Agency’s Africa Energy Outlook report.

“New business models, often involving pre-payment or pay-as-you-go for a

certain level of service, underpin some of these commercial efforts, but

expensive finance, regulatory barriers in some countries and limited capacity

among the poorest to pay for energy remain major constraints on scaling up

the provision of rural energy services,” the report states.

Thank You