Dairy farmers to trade energy with blockchain microgrid

Dairy farmers could soon be trading renewable energy using blockchain technology in the Latrobe Valley.

The Australian Renewable Energy Agency (ARENA) announced $370,000 in funding for a feasibility study into a virtual microgrid for Victoria’s Latrobe Valley.

The $775,000 project will be led by Brooklyn-based energy company LO3 Energy and will focus on the feasibility of creating a ‘virtual microgrid’ across up to 200 dairy farms, more than 100 household consumers and around 20 other commercial and industrial customers in the Gippsland region

LO3 built and managed the Brooklyn Microgrid, which was the first local energy marketplace to use blockchain.

“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,” LO3 founder and CEO Lawrence Orsini said.

“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.

“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.

“Engaging with farms is a key part of the project as they have 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 virtual microgrid will incorporate solar PV, battery storage, smart appliances and enabling technologies combined with the LO3’s Exergy peer-to-peer energy trading platform which uses blockchain technology to allow participants to securely buy and sell locally produced renewable energy.

ARENA CEO Ivor Frischknecht said the feasibility study would be the first step in transitioning one of Victoria’s primary agricultural regions towards renewables, and 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.

“The virtual microgrid concept brings an alternative approach to these solutions 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.

“A large focus of LO3’s project is capturing the benefits from avoided network investments combined with optimising energy consumption to significantly improve the economic outcomes and increase the generation sourced from renewable energy for the Latrobe Valley region.”

This marketplace would allow Gippsland farmers to take greater control of their energy use, providing the opportunity to sell their solar power back to the grid, delivering savings on their energy bills.

Farms are estimated to support up to 80kW solar and 250 kWh of battery storage – giving a potential total of 16MW for the project – the typical energy consumption profile of a dairy farm allows excess energy to be sold in the daytime.

Participants would be linked in an internet-of-things-based marketplace while using AusNet’s distribution network.

Farmers would be able to participate at no upfront cost through loans provided by the Sustainable Melbourne Fund, repaid through council rates.

The study is expected to be completed by end of 2018, and if successful, the pilot microgrid could be rolled out in Gippsland in 2019.

The project involves a consortium of partners including AusNet Services, Sustainable Melbourne Fund, Dairy Australia and Siemens.