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Connected Homes July 2017 Viewpoints

Technology Analyst: Michael Gold

Peer-to-Peer Electricity Sales: Households as Power Brokers

Why is this topic significant?

In Bangladesh, Germany, the Netherlands, the state of Western Australia, and the state of New York, some households with solar panels or batteries or both are selling electricity to other households through a new breed of intermediary companies.

Description

In Bangladesh, home solar systems are somewhat common, and emerging interconnected off-grid systems provide naturally hyperlocal peer-to-peer (P2P) energy trading. Start-up Solshare supplies off-grid rural villages with DC connections, connected DC power meters, and mobile-friendly systems for payments and credits.

Elsewhere, systems that enable P2P electricity sales are grid-connected. Battery maker and energy-services company Sonnenbatterie has reportedly established a network of 8,000 customers who are scattered across Germany and equipped with behind-the-meter batteries, some with and some without home solar systems. In limited trials, households with excess solar electricity production have sold power to neighbors in Western Australia via start-up Power Ledger and in Brooklyn, New York, via LO3 Energy (which also has its sights set on starting service in Western Australia).

Another start-up in New York, Drift, serves as an alternative electricity provider to households with and without solar panels or batteries, and allows electricity buyers to fine-tune use of local sources, renewable-only sources, and least-cost sources statewide. Drift reportedly goes beyond other start-ups in efforts to rein in rates, tapping virtual power from demand-response networks and investing in speculative hedges on energy markets with help from artificial intelligence algorithms, which search for signs of potential rapid changes in demand by analyzing social media messages.

Implications

Typically, customers and intermediaries engaged in P2P electricity transactions are arbitraging electricity rates, feed-in tariffs, and the financing costs for technologies. Some enthusiasts might frequently tweak settings on mobile apps to optimize payback and select the cleanest available sources for a given budget. Most users of P2P electricity marketplaces will likely automate decisions about prices and energy sources. To that end, Power Ledger and LO3 use smart contracts that automatically execute transactions based on how individual users configure their services. The smart contracts are embedded in blockchains, which are highly tamper resistant shared digital ledgers that record detailed production and consumption data.

Impacts/Disruptions

Some of the new services could be stepping-stones toward reorganizing electric-power industries for an era of distributed generation by prosumers (producer consumers). Greatly increased use of home solar systems and other forms of customer-scale distributed energy supplies would greatly disrupt status quo utility services.

The new services might also foster increased use of real-time pricing. In that event, homes would need increased automation to make loads sensitive to actual electricity prices, in contrast to the existing practice of simply deferring loads to night time, when many electricity customers see lower rates.

If P2P intermediaries become large, watch for them to take on increased costs of managing grids and to become targets of customer resentment as costs shift to the new players. Marketing literature and news stories about P2P electricity trading are packed with hype about energy independence and cutting out utility-company intermediaries. But neighborhoods (especially in high-density urban areas) typically need far more electricity than local solar generation resources can supply. And even small groups of homes that engage in P2P energy trades would tend to rely on a grid's local distribution cables. Moreover, watch for disputes about who receives power and who is denied power during an outage.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: 10 Years to 15 Years

Opportunities in the following industry areas:

Energy utilities, photovoltaic panels, batteries, electric vehicle charging, smartphone application development, machine learning, cryptocurrencies, advanced cryptography

Relevant to the following Explorer Technology Areas:

Automated Package Delivery

Why is this topic significant?

Robots and drones for delivering food and packages are delivering goods to homes in limited commercial trials and could see increased use.

Description

In five provinces of China, e-commerce vendor JD.com operates "dozens of drones" that have made "thousands of deliveries," according to Vox.com. The vendor reportedly developed its own aircraft. In France's Département du Var, where the world's first regularly scheduled drone delivery service is in operation, drones land on pedestals that serve as pickup and delivery points and contain robotic equipment that automatically loads and unloads packages. France's postal service jointly developed the hardware with drone supplier Atechsys.

Global brands are also testing drones. Amazon.com has developed several drone designs and is using some of them in a small ongoing trial in Cambridgeshire, England. Wal-Mart Stores has applied for several patents related to drone delivery and is conducting research and development using drones from DJI. And 7-Eleven tested a drone from start-up Flirtey that delivered goods to a dozen households in Reno, Nevada, during 2016.

Wheeled robots also see limited delivery duties in trials; commonly, human wranglers accompany the robots, at least for now. During May 2017, Domino's Pizza started limited pizza deliveries in Hamburg using robots from Starship Technologies, and indicated it may expand such service elsewhere in Germany and the Netherlands. Starship Technologies has tested its robots in 16 countries and conducts additional limited commercial trials in London, England; Washington, DC; and Redwood City, California.

Practical limits to range and payload mean that mounting drones and robots on delivery trucks might make sense. UPS has demonstrated a vehicle with a roof-mounted drone supplied by Workhorse Group. Mercedes Benz has demonstrated its Vision Van concept vehicle, which is equipped with dual roof-mounted drones from Matternet and (at least in video demonstrations) robotic automation for loading the drones. Mercedes Benz also demonstrated its concept Robovan, which serves as a "mothership" for eight Starship Technologies robots.

Implications

Automated delivery could erode or rein in needs for human labor for delivery. Aviation traffic to and from homes seems to be mainly for households that have a safe place for a drone to land; thus, customers and merchants may use the aircraft mainly for suburban and rural deliveries. In contrast, delivery by wheeled robot involves a recipient stepping out onto a sidewalk and unlocking a compartment with help from a smartphone. A need to be present to receive the robot's package means that customers and merchants may use the robots mainly for urgent deliveries such as hot meals.

Impacts/Disruptions

Imaginably, drones and robots could help many brick-and-mortar retailers that are now struggling to compete against Amazon and other e-commerce players. Because of the range limits of battery-operated vehicles, delivery drones and robots will likely see the most use for short hops of a few kilometers or less. They could therefore benefit businesses that have establishments near their customers.

Drones and robots could become victims of their own popularity. Aviation regulators are cautious because potentially large numbers of flights over populated areas could pose hazards, and city governments are cautious about ground robots because crowds already congest sidewalks and crosswalks. Also, drones and robots might not be ideal choices for delivering high-value goods that come in small packages, which could tempt criminals or casual thieves. And not all neighborhoods will welcome drones and robots, which could become targets for vandalism.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: 5 Years to 10 Years

Opportunities in the following industry areas:

Parcel delivery, air traffic control, mechatronics design and manufacturing, retailing, distribution, food service

Relevant to the following Explorer Technology Areas: