When we think of concepts like peer-to-peer networks and disintermediation, we usually think of industries that are very Internet-centric. But these concepts can, should, and will apply in electric power networks too: smart grid technology enables peer-to-peer power.
The study referenced in that BBC article analyzes the potential for microgrids, and argues that the real potential from applying smart grid technology to create microgrids is in the ability to create a neighborhood peer-to-peer network in which neighboring customers can buy and sell from each other:
“A microgrid is a collection of small generators for a collection of users in close proximity,” explained Dr Markvart, whose research appears in the Royal Academy of Engineering’s Ingenia magazine.
“It supplies heat through the household, but you already have cables in the ground, so it is easy to construct an electricity network. Then you create some sort of control network.”
That network could be made into a smart grid using more sophisticated software and grid computing technologies.
As an analogy, the microgrids could work like peer-to-peer file-sharing technologies, such as BitTorrents, where demand is split up and shared around the network of “users”.
As distributed generation and plug-in hybrid vehicles proliferate in the market, more numbers and types of electricity consumers will have the resources to be both buyers and sellers in such a peer-to-peer network. Look, for example, at the picture of a P2P network at the Wikipedia peer-to-peer entry.
Now imagine that instead of computers, each of the entities depicted on this network is a home or small business in a microgrid network. Power, and commercial transactions, can flow in both directions between pairs on the network, and they can flow between any pairs of agents who have agreed to participate. Just think of what that can do to reliability, especially if you pair it up with transactive, price-responsive end-use technologies that have the type of behavior I described in this post on smart grid and complexity and this post on how intelligent end-use devices make a transactive smart grid valuable.
If you are interested in learning more about a microgrid project, here’s a report on the Galvin Electricity Initiative prototype microgrid project at the Illinois Institute of Technology. It focuses on the technical details and capabilities of a microgrid to provide reliable, high-quality electric power service, not on the microgrid’s transactive capabilities, but it’s a good introduction.
The technology exists for P2P power networks. The institutional structure, though, does not allow for such a decentralized, transactive network — the regulatory environment typically does not allow microgrids for a variety of reasons, including the monopoly granted to the local utility on the construction of distribution wires that cross public rights-of-way.