Power right from the producer

Simply order eco-friendly electricity from the neighbour's photovoltaic system, or from the local farmer's biogas plant, or from the local windmill operator: Axpo is putting this vision into practice under the name Elblox together with a power utility in Germany.

In the regional food retailing business it is already customary for consumers to buy fresh vegetables from the farmer around the corner to cover daily and weekly needs. What is possible with potatoes, carrots and salad ought to be possible for power generated from renewable sources – so to speak "power right from the producer". That is exactly what four Axpo colleagues from different areas in the company thought, and went ahead to set up the Elblox platform under a group-wide project. A prime example of the way innovation is lived at Axpo.

Yves Schönenberger, who leads the Axpo Trading team for market analysis, explains: "In my function at Axpo Trading, I see daily how international trading functions, how it is influenced, what developments are being initiated, and what will be possible in the future. It has become apparent that increasing digitalisation and decentralisation already have an enormous influence that will accentuate further in upcoming years."

Power trading soon to be disrupted?

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Alexander Gifon, Senior Manager Mergers & Acquisitions at Axpo, points out how far this could some day go: “Our project team came to the conclusion that today's value chain with several business and process steps between the power producer and the consumer could become obsolete. Such a development would be absolutely disruptive for energy trading and would likely fundamentally transform the entire industry. Producers and consumers will be linked with each other in a new way."

It is clear that as the largest producer of renewable energies in Switzerland and a leading European power trader, Axpo is at the forefront in actively shaping the change. Ivo Müller, Head of Grid Operations at Axpo, talks about the motivation of the Elblox team. "It was immediately clear to me that this development would have great impacts not only on trading, but on grid stability as well. The processes with the players in the power market must be redesigned without breaching regulatory framework conditions. It would be fatal if Axpo, as a leading energy company, were to watch and wait. We much prefer shaping the future ourselves. So in the project team we told ourselves: Let's tackle and drive this forward together."

Blockchain makes it possible

But how will it be possible for a power consumer to put together an individualised power mix and decide where and how many kilowatt-hours to procure?

The fourth in the Elblox project team, Mario Zoppe, Head of Controlling at CKW explains: "Above all, it is the blockchain technology that will soon enable the purchase of power directly from the producer. Elblox is focusing on the trend toward digitalisation and automation along the value chain in power trading; we see a great deal of potential from production to invoicing. In the future, customers will talk directly with the producers – and systems will carry out the processes."

Elblox operates a blockchain-based peer-to-peer platform for the personalised sale of electricity between decentralised renewable energy producers and potential consumers on a local basis. The platform stores all the information concerning production, consumption and the contractual relationships between the platform participants. The blockchain ensures that the data on production and marketing is recorded for each plant. This makes it possible to clearly assign every produced kWh to a consumer – and in turn, the certificate of origin is guaranteed for the green electricity.

Launch in Wuppertal

To launch Elblox on the market, the project team looked for a partner: Wuppertaler Stadtwerke (WSW) was chosen because it had already done pioneering work in this area, and because the German market is well suited for this type of project owing to power market liberalisation.

WSW now offers an Internet platform under www.wsw-talmarkt.de. Operators of solar, wind and other renewable plants can offer their power to the market, and environmentally conscience consumers can buy it on the platform. “The special feature of our offering is that energy trading is locally restricted," explains WSW Sales Manager Andreas Brinkmann. "The power comes from Wuppertal or selected regional plants and can only be bought by residents of Wuppertal."

The advantages for the consumers are obvious: They have the certainty of getting eco-friendly power from 100 per cent renewable energies, and they can also decide for themselves from which plant they wish to procure. Tal.Markt is also attractive for producers that can profitably market their power on the platform. The significance of these types of sales channels will increase among plant operators because eventually fixed feed-in remuneration for green electricity will be dropped. In WSW's view, as a communal energy supplier, the idea is to reinforce local, decentralised renewable energy production with digital offerings like Tal.Markt.

The starting shot for direct power trading via blockchain has been fired. What’s next?

The four Axpo experts from the Elblox team laugh and cannot conceal that they are aiming high: "We begin the journey with the current Elblox platform. We are continuously developing our marketplace, addressing new trends, and creating added value for our customers. The findings from the collaboration with WSW will definitely help us move forward. In the long term, the Elblox platform strives to become a leading online marketplace for personalised renewable energy in Europe."