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World’s largest solar battery maker joins Australian blockchain virtual power plant

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It's like laying out a red carpet leading into the Power Ledger virtual power plant.

Power Ledger has expanded into a series of trials in sites around the world recently, including Japan, India, Malaysia and others. After successful results, these trials are now moving on to live commitments.

One is in South Australia, where last month Power Ledger partnered with Australian energy retailer Powerclub in the first large scale commercial rollout of its blockchain energy trading system.

That project has now been joined by sonnen, the world's largest manufacturer of solar batteries, and Natural Solar, the largest Australian solar installation company.

Eligible South Australian households can tap into the state's $4,500 battery subsidy scheme by joining this project, while the first 20 Powerclub customers to get on it can also get a further $500 discount.

What does Power Ledger do?

In simple terms, the current energy system works kind of like this:

Electricity retailers buy electricity from producers at wholesale prices, and then re-sell it to consumers at a mark-up. When someone installs solar panels on their home, they can use the electricity themselves or sell any surplus back into the grid at a price determined primarily by their electricity retailer through a system of feed-in tariffs.

The following are some features of this system:

  • Higher energy costs as consumers typically pay a margin on top of the actual production price and have to pay retailer prices.
  • Less incentive to install home solar as feed-in tariffs often aren't great.
  • Wasted energy and money because the conditions that create excess energy (e.g. consecutive sunny days or it's not so warm you need to run air conditioning) tend to impact entire areas, so everyone's selling unwanted energy back into the grid at the same time.
  • Some incentives to oppose the development of home solar as it cuts into energy retailer margins, who are then forced to raise prices to compensate. There are even allegations of energy retailers "punishing" solar panel installation.

On the whole, there's some room for improvement. That's where Power Ledger comes in.

In simple terms, Power Ledger — an Australian blockchain technology startup — works kind of like this:

Individuals join a local energy market and can directly trade energy with each other. Blockchain magic holds it all together. This network of different households, businesses and all their home solar panels is known as a Virtual Power Plant (VPP).

By having access to their own energy market, people can store their homemade energy in low-demand (and therefore low-price) periods, and then sell it on in peak periods at higher prices, with the effect of reducing peak energy prices and giving home solar users better value for money.

"Power Ledger's VPP technology enables participants to export stored solar energy at peak periods of demand, giving them the highest value for their exports while alleviating pressure on the grid and reducing Australia’s carbon footprint from fossil fuels," explains Power Ledger co-founder and executive chairman Dr Jemma Green.

"Traditionally, energy companies may offer standard payments or incentives ahead of time when they foresee a spike in demand, but these don't take into account the actual energy contribution customers are making or likely to make."

"We anticipate the VPP will deliver thousands in annual electricity savings for participating South Australians," said Powerclub CEO Stuart McPherson.

The addition of sonnen and Natural Solar to the mix helps get the ball rolling there and helps open the door to the VPP to all suitable households rather than just those who already have solar panels, while also helping onboard people via the SA solar incentive schemes.

"Power Ledger's technology, combined with Powerclub's no-profit processes are a perfect example of this as it allows individual households to effectively trade electricity like a stock market," says Natural Solar CEO Chris Williams. "It's these significant advances in technology that are furthering the home battery storage market and swiftly setting the standard for households in Australia."

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Note: Solar service not available in the Northern Territory, Tasmania and Western Australia.

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