Taking a Hybrid Approach to Local Energy Markets

In an article for Smart Energy International, Guidehouse Insights examines how transactive energy can align the needs of utilities, the grid, and electricity consumers

The penetration of distributed energy resources (DER) is rapidly increasing, and the shift from a centralized, unidirectional grid to one that is distributed, dynamic, and interconnected presents challenges for utilities and DER owners alike.

In an article for Smart Energy International, Johnathon de Villier, research analyst at Guidehouse Insights, says the next-generation concept of local energy markets, which rely on transactive energy, could provide a solution aligning the needs of utilities, the grid, and electricity consumers.

In the article, de Villier compared two pilot programs with different implementation models: the UK’s Cornwall Local Energy Market, which keeps utilities front and center, and Switzerland’s Quartierstrom Local Energy Market, which gives consumers and prosumers a more active role in the grid system. According to de Villier, the best approach is a combination of both.

“For future transactive energy pilots, the key challenge is finding a way to meet in the middle and unify these two visions for local energy markets,” he said. “Both projects show the value of collaboration between academic institutions, technology startups, and utility incumbents.” 

De Villier added that the lessons learned from these pilots are helping to accelerate the development of the 70-plus transactive energy experiments now underway around the world.

Read the Smart Energy International Article
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