Centrica to join London blockchain trial for alternative billing

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Energy service company Centrica will join a residential PV pilot project in London that will trial billing methods using a blockchain platform provided by Verv.

The project, in the Hackney area, is set to go live at a 13-block social housing community which has been equipped with PV systems and blockchain energy trading. The aim is to determine which billing methods are most suitable for customers and prosumers alike.

Using the blockchain technology, Centrica seeks to explore flexible tariffs to reduce energy bills while also ensuring remuneration for PV system owners. The project will be launched under the auspices of a “sandbox” – an exemption from the usual regulations that is permitted by U.K. electricity and gas regulator Ofgem, to explore disruptive technologies.

The Hackney homes have been equipped with solar roofs to power communal areas and feed excess energy into the grid. The second stage of the scheme, in April, saw Verv apply its blockchain energy trading platform to the Banister House complex. According to the company, April 11, at Banister House, marked the U.K.’s first physical trading of electricity using blockchain.

With support from Ofgem and an Innovate UK grant, the system is now looking to optimize use of solar energy and electricity purchased through the grid. The aim is to establish a transparent and flexible billing method that allows customers to see how much energy they are consuming and where from, and to charge them accordingly.

Blockchain could fill export payment void

Peter Davies, CEO and founder of Verv, said: “Bill consolidation is a significant component of peer-to-peer energy trading; we need to ensure that consumers get a clear bill which breaks down where their energy has come from, and charges them accordingly. I’m looking forward to this phase, as we explore more in-depth logistics of real-world implementation, and edge closer and closer to it. We’re thrilled to have British Gas on board to help discover how we can offer customers seamless energy consumption options that include cheaper, locally sourced green energy.”

The project could fill the remuneration gap that would be left open by the government’s proposed removal of export tariff payments and feed-in-tariffs for small-scale solar systems. That unpopular proposal has been likened to theft, as system owners are required to connect PV systems to the grid, but would not receive any payment for excess electricity.

A Verv spokesperson told pv magazine the new trial could result in “offering domestic solar owners an ROI [return on investment] on their renewables, which is particularly prominent with the potential removal of the feed-in tariff. The current feed-in tariff earns prosumers [around] 5p/kWh, while the current average price for energy is [around] 13.4 p/kWh. Verv, using the blockchain platform, can match supply and demand of energy and automate trades in advance in order to get the prosumer – and consumer – the best price for their energy. Higher than the FiT and lower than average energy prices, respectively.”

All-time low for UK solar

The U.K. solar industry responded to the government’s proposal to end FITs and export tariffs with a letter to Energy Minister Claire Perry, asking her to confirm their continuation from April. The letter was initiated by the Solar Trade Association and signed by more than 200 organizations across the industry, representing smart technologies, innovative suppliers, academics, major NGOs, farmers, landlords, and homeowners.

However, Mrs Perry told the recent Energy Live Expo conference in London – on the controversial topic of fracking – the government bases policy on scientific evidence, rather than “who shouts loudest”.

While the blockchain trial could motivate self-consumption and peer-to-peer energy trading, the trajectory of solar development in the U.K. has contrasted starkly with continental Europe recently. The proposal to remove tariffs comes amid an eight-year low in PV deployment, as installations in the U.K. dropped 95% in 2018, compared to 2015 levels.

Since the government introduced solar PV feed-in tariffs in 2010, the installed capacity of renewables has gone from 9.3 GW at the end of 2010, to 38.9 GW by the end of last year, the majority of it installed before 2015. Of that figure, solar accounts for around 12.9 GW.