Dairy farmers in the heart of Victorian coal country will soon be able to trade solar power using blockchain processes.
A virtual microgrid will be created in the the Latrobe Valley, exchanging energy generated from 200 Gippsland dairy farmers, 20 businesses and 150 households, powered by a decentralised, peer-to-peer blockchain energy trading platform called Exergy.
Ivor Frischknecht, the Australian Renewable Energy Agency's chief executive, said the trial was the first step in transitioning the agricultural region - near the state’s coal-fired power stations - to renewable power. It would be the first major trial of a blockchain-based virtual microgrid in Australia.
“The ‘virtual microgrid’ concept brings an alternative approach to energy where the control remains with the customers, rather than retailers, who can choose to opt in depending on the current prices and energy types, or their willingness to provide demand response,” Mr Frischknecht said.
The project will be built by LO3 Energy, a New York-based company that created the world’s first local energy marketplace, in Brooklyn, which allowed participants to trade energy using blockchain technology.
Blockchain is a decentralised record of transactions made between a number of parties, shown chronologically and publicly to ensure all are valid and correct. The transactions can happen in seconds and can't be manipulated.
This is not the first major blockchain energy development in Australia. Earlier this month, a deal was announced to develop a blockchain centre inside the Redbank coal-fired power station, in the NSW Hunter Valley, to provide cheap electricity for blockchain applications.
The Victorian virtual microgrid will comprise solar installations, battery storage, and demand response and enabling technologies combined with LO3’s Exergy peer-to-peer trading mechanism, which uses blockchain processes to allow those within the market to buy and sell locally generated renewable energy.
“With the energy-hungry farming industry still recovering from the 2016 milk crisis, it promises a cost-effective and resilient solution for farmers to create and manage their own energy and profit from trading their excess generation,” LO3 Energy founder Lawrence Orsini said.
“Engaging with farms is a key part of the project as they have the capacity to install large solar generation and storage. Exergy makes it possible for them to become mini-power plants and gain revenue for energy they don’t use.”
The farms will be given loans to build solar installations by the Sustainable Melbourne Fund, which will be repaid through council fees.
ARENA will also provide $370,000 in funding for the $775,000 project.
“The local Latrobe Valley marketplace would allow Gippsland farmers to take greater control of their energy use, providing the opportunity to sell their power back to the grid,” the Australian Renewable Energy Agency (ARENA) said, “consumers will also be paid for choosing to conserve energy at peak times.”
The study will run to the end of the year, with plans to roll out a pilot microgrid in Gippsland in 2019.