Researchers Develop Local Electricity Trading System to Cut Costs

As energy prices continue to climb across the globe, researchers at Washington State University (WSU) have developed a local electricity trading system that holds promise for reducing costs for residents and enhancing grid reliability. In collaboration with Avista Utilities and its Energy Innovation Lab, WSU’s team conducted a simulation of this trading approach for solar energy and battery storage within a neighborhood context. The five-day proof-of-concept demonstrated potential energy cost savings of approximately 12% for participating households.

The findings, published in the IEEE Transactions on Industry Applications, address a pressing need as the electricity industry undergoes significant transformations. According to John Theisen, lead author of the study and a PhD candidate in the School of Electrical Engineering and Computer Science, “The changing landscape of the electricity industry necessitates practical solutions for coordinated operation at the distribution level.” He emphasized that optimizing electricity distribution can lead to increased efficiency and significant financial savings for utility companies and consumers alike.

The traditional energy grid is evolving from a centralized model to one that incorporates numerous distributed energy sources, such as rooftop solar panels and small community wind farms. With growing electricity demand and the lengthy process of constructing new transmission lines, local coordination of resources offers a viable solution for improving grid efficiency and reducing costs over time.

WSU’s innovative system enables the trading and sharing of energy produced by local assets, including solar panels and batteries, at the distribution level. Historically, electricity trading has operated at a large-scale transmission level where grid operators buy and sell electricity based on fluctuating prices. The WSU approach aims to replicate this model within local communities, optimizing the use of underutilized assets.

For instance, a hospital or university with a backup battery could contribute to the local energy market, providing power when demand peaks. Theisen noted, “When you can utilize an underutilized asset, you can gain a lot more value from it.”

This testing phase utilized battery assets and electricity feeders located in Spokane’s Catalyst Building and South Landing Eco-District. Researchers implemented a cloud-based system that analyzed energy prices and solar forecasts, facilitating local energy trading or connection to the larger grid. The test represented one section of a distribution feeder, accounting for roughly one-eighth of the region’s substation.

The results were notable. The system allowed asset owners to respond to real-time energy price fluctuations. “It was pretty seamless,” Theisen stated. Over the five-day testing period, the simulations indicated potential savings of about $1,000 for the energy utilized by the selected assets.

Theisen also highlighted the broader implications of this research. “If those kinds of assets existed everywhere in the distribution system at that level of participation, you can save hundreds of thousands of dollars a year on costs.” Avista Utilities supported the study, recognizing that while current energy prices reflect the need for infrastructure upgrades and clean energy initiatives, projects like this one aim to mitigate future expenses while enhancing efficiency.

Theisen added, “Everyone’s worried that the price of electricity is rising, and it will. The only way you can get around that is by being more energy efficient and figuring out these smarter ways to coordinate electricity.” This research presents a forward-looking approach that could reshape local energy markets and provide significant savings for consumers in the years to come.