Latrobe Valley dairy farms to share energy via blockchain micro-grid

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First blockchain virtual micro-grid in Australia will use solar and storage to allow 200 dairy farms, 100 households and 20 businesses to share energy.

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One Step Off the Grid


Up to 200 dairy farms, more than 100 households and 20 local businesses in the Latrobe Valley could share the output of solar energy as part of a “virtual micro-grid” being put together by Brooklyn-based company LO3 Energy.

The project has received funding from Australian Renewable Energy Agency, and will look to use locally generated solar, battery storage, smart appliances and blockchain technology to buy and sell locally produced renewable energy.

LO3, which developed the famous Brooklyn micro-grid in New York, and set up shop in Australia nearly two years ago, has developed a peer-to-peer trading platform known as Exergy which can be used to share the solar generated and stored by consumers.

On its website, LO3 says Exergy encourages the “democratisation of energy”, allowing consumers to be the new energy “producers”. It is significant that this is happening in the heart of Victoria’s brown coal province, and its massive centralised generators.

“This is a landmark project for us and the Australian energy industry as it combines a number of our innovative technologies to optimise the use of renewable energy,” said Lawrence Orsini, the founder and CEO of LO3.

“As the economy decarbonises and coal generation continues to be retired, wind and solar will increasingly enter the market – but their intermittent generation has created a need for new ways to store and manage energy,” he said.

“This microgrid will showcase solutions for this including battery storage to make greater use of solar energy and demand response in which consumers will be paid for choosing to conserve energy at peak times.”

The study is yet to be done, but initial estimates suggest that each dairy farm could, on average, support around 80kW of solar an 25kWh of battery storage, making a 16MW micro-grid from the dairy farms alone – one of Australia’s biggest.

Households are also expected to have solar and storage, as well as smart devices to help manage their usage, and an “internet of things” based marketplace.

The 200 or so dairy farms will be able participate at no upfront cost through loans provided by the Sustainable Melbourne Fund, and repaid through council rates. Other partners include local network operator Ausnet, Dairy Australia and Siemens.

The use of peer-to-peer trading in a micro-grid is a new but welcome development in Australia, where restrictions have limited the ability of consumers to sell excess output from the rooftop solar, or other behind the meter installations, to neighbours.

It normally has to be sold back to the retailer, who then on-sells it to other users at a significantly higher price. However, the use of blockchain technology enables clear visibility over the details of such transactions, and big utilities now understand that virtual micro-grids are an inevitability.

ARENA CEO Ivor Frischknecht said the feasibility study would be the first trial of a blockchain-based virtual microgrid in Australia.

“With significant increases in distributed energy resources across the network, there is an emerging opportunity to optimise these systems through orchestration,” he said in a statement.

He said the ‘virtual microgrid’ concept leaves control with the customers, rather than retailers, and they can choose to opt in depending on the current prices and energy types, or their willingness to provide demand response.

A large focus of LO3’s project will be on the ability to capture the benefits from avoided network investments combined and optimising energy consumption.

This article was originally published on RenewEconomy’s sister site, One Step Off The Grid, which focuses on customer experience with distributed generation. To sign up to One Step’s free weekly newsletter, please click here.

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8 Comments
  1. Chris Drongers 7 months ago

    Great project. Most interesting will be reaction of the gentailers if this type of project gains teaction.
    Lots of farmers have ‘lumpy’ incomes; great for a coyple of years, lousy for others. Building $100-500k solar plants in good years gives them a depreciable use for the money in goid years and an income in off years.

    • palmz 7 months ago

      Hopefully they included some dumb forms of storage.

      Dairy’s normally use quite a bit of hot water, and a lot of power to cool down milk so thermal storage would be king for self usage.

      • Peter F 7 months ago

        On a dairy farm you have a big milk vat which you can use as an ice-bank energy storage and hot water the same

        • Alastair Leith 7 months ago

          They can freeze the milk, i doubt that would be allowed! All they need is water to freeze and then use the coolth for chilling the milk. I wonder when their cows’ methane emissions will be priced in?

          • Peter F 7 months ago

            The don’t freeze the milk, the hollow walls of the milk vat are an ice bank,

          • palmz 7 months ago

            I was more or less thinking of this type of a system
            https://www.ice-energy.com/technology/

            So pretty much use a liquid or some other median as a heat sink (cold sink) so they can use stored energy to cool the milk.

            I don’t know what would be the most practical new VATs or using old ones and installing pipes internally to cool the milk, or externally to cool the VAT witch would cool the milk inside it. (easy to keep clean)

          • Peter F 7 months ago

            standard technology already available for many years at least 45 years ago when I worked on a dairy farm
            see http://dairytechrefrig.com.au/?page_id=171

          • palmz 7 months ago

            Was not aware it was a product… I don’t work in the dairy industry but work in a related one. Looks like a brilliant system and could work excellent with solar.

            Thanks for the link.

            Regards

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