Open Utility: How a start-up plans to be the AirBnB for energy trading

London: In 2012, James Johnston watched a video where by Bob Metcalfe talks about the the rise of the ‘Enernet’. As a PhD student looking at microgrids, this provocative idea was a revelation.

“I realised the energy system, like the internet, would one day be a mere platform where customers and generators could upload their energy and have choice in what type of energy they consume.”

Despite seeing no regulatory path through, James imagined a piece of software which would allow this to take place. A peer-to-peer energy platform. The idea of Open Utility was born!

[Note: For a summary of the Meltcalfe’s idea read my previous post here]

 

Is this the world’s first real-time Peer-to-Peer energy platform?

Fast forward three years, Open Utility is 9 staff strong and conducting their first real-life trial of their software, dubbed Piclo. Partnering with Good Energy – a UK utility – 24 renewable energy generators and 14 large commercial customers are participating in the trial, which is possibly a world first for such a concept.

Via the Piclo website, a customer selects their generators in order of preference. Then, with matching based on 30 minute intervals, the customer can log-on to see exactly which generator is supplying them at any given moment. At the end of the month their electricity bill tells them exactly how much energy came from each generator. At the same time the generator can decide who to sell power to and whether to offer discounts or premiums to certain customers. Genius!

A Rollercoaster Start-up Journey

Whilst the idea seems on the surface pretty straightforward, James’s  journey with Open Utility was far from smooth. Knowing there was no way to simply buy and sell power without becoming a energy retailer, the team spent all of 2013 trying to find a utility partner. Whilst 16 electricity retailers agreed to meet, their risk aversion meant that none were willing to do a trial with no immediate financial reward.

In the meantime, with cash low, the small start-up team of four decided to pivot to attempt to keep the business afloat. They built a price comparison service for solar power purchase agreements – a serious detour in order to buy some time. Persevering, James held faith in his original concept and was finally rewarded with £310,000 (AU$620,000) in government grant funding, alongside £190,000 (AU$380,000) in matching investor funding. The money had rescued the idea at the 11th hour.

Armed with new confidence and the cash to build the software, Open Utility re-approached the energy retailers and found six who were keen. They chose Good Energy for the trial as they are mission driven, 100% renewable and have 100,000 customers who are likely to see lots of value in such a service.

Now with the trial underway, the momentum is clear; just last week, Open Utility was awarded Startup of the Year at European Utility Week in Vienna.

The founding Open Utility team: Nima Taba-tabai, James Johnston, Andy Kilner and Alice Tyler (Photo: Open Utility)

The Nuts and Bolts – how the trial works

The generators in the Piclo trial include 7 wind generators, 7 micro-hydro plants and 10 solar systems ranging from 25kW to 5MW. The generators were selected in order to roughly match the customer load profiles. This minimises reliance on Good Energy, who agreed to buy surplus electricity and sell in times of shortfall. All transactions are conducted via Good Energy.

A customer might be motivated by knowing exactly who and from where their power is coming from. Generators sign a fixed PPA with Good Energy, and are motivated to join the trial due to the free data visibility, local publicity and outreach with local customers.

The Potential Value and Applications

Piclo has the potential to grow into a vibrant, open marketplace where buyers and sellers meet and trade – like the eBay, or AirBnB for energy.

It’s no surprise that many of the customers favoured local generators in the trial. According to James, the next trial will hopefully incorporate the value to the grid from local energy trading to create more financial incentives for both generator and consumer to participate.

“The regulator signed off on the pilot so are clearly interested in the potential applications.”

Open Utility’s software is the first step towards making local energy trading not only possible, but also more economic than the alternatives.

Such software could have global application. In Australia, this software could easily feed into the ARENA-funded trials of local energy trading currently taking place led by the Institute for Sustainable Futures at UTS, who are leading researchersin this field globally.

In an environment where consumers want to buy local and put a face to their power, it’s super exciting. Australian utilities should take note – give the people choice and value, via services such as this, otherwise brace yourselves for defection!

This article was originally posted at Chris’s blog www.citizenpower.com.au and republished with permission. Click on the Citizen Power tag to view his other posts on RE. Chris Cooper is travelling the world meeting new energy start-ups and citizen energy movements as part of a Winston Churchill Fellowship.