The Australian Energy Market Operator (AEMO) has announced the architecture and technology partners for Project Energy Demand and Generation Exchange (EDGE), an off-market platform that will allow for trading of electricity and grid services from distributed energy resources (DER), such as rooftop solar and batteries, and can be expanded across the National Electricity Market (NEM).
The $28 million Project EDGE will deliver a prototype market for DER to be dispatched and traded as part of the NEM. Registered market participants, using customers’ DER, will submit bids to the market platform, and in turn will make these bids visible to distribution networks to increase the reliability and resilience of the whole system.
AEMO will partner with electricity network provider AusNet and retailer Mondo to design and test the “world-first”, two-way energy system that will allow eligible customers to trade electricity and grid services via an aggregator or Virtual Power Plant (VPP) operator from their DER, similar to large-scale participants in the NEM.
“Project EDGE aims to build understanding of and inform the most efficient and sustainable way to integrate DER into the electricity system and markets, allowing all consumers to benefit from a future with high levels of DER,” AEMO chief markets officer, member services, Violette Mouchaileh, said.
“There is no existing product that meets all high-level requirements for the DER marketplace, so Project EDGE is at the leading edge of product development in this space.”
The DER marketplace solution will be developed in partnership with technology providers PXiSE, which will provide market logic software, and Microsoft which will provide cloud services.
European-based technology provider Energy Web Foundation will deliver the open-source operating system for the marketplace with the decentralised technology designed to allow multiple parties to efficiently exchange and validate data in a secure environment.
Australia leads the world in adoption and deployment of DER with data provided by the Clean Energy Regulator (CER) revealing more than 2.89 million, or about 25% of Australian homes have a rooftop solar PV system installed.
Combined with the surge in energy storage, demand-side management, and utility-scale renewable generation, the NEM is rapidly transforming into a decentralized system in which consumer-owned DERs play a pivotal role.
AEMO said this has created challenges for distribution network operators in maintaining a reliable and stable supply of energy.
In response, AEMO has established a DER program in a bid to smooth the transition from one-way energy supply to a system that maximises the value of DER for all consumers through digitisation and integration of DER into Australia’s power systems and markets.
AEMO said Project EDGE will initially involve about 50 residential customers in Victoria’s Hume region, but then scale up to 1000 residential, commercial and industrial customers.
Mouchaileh said the three-year trial will provide AEMO, AusNet and Mondo visibility and active control of the DER, helping to reduce electricity costs for customers and managing challenges associated with a decentralised grid and increasing levels of DER participation.
“The trial forms part of AEMO’s DER program to enable a smooth transition from a one-way energy supply chain, to a world-leading system that maximises the value of DER for all consumers through effectively integrating DER into Australia’s power systems and electricity markets,” she said.
Energy Web chief executive Jesse Morris said Project EDGE could provide lessons for other nations.
“Australia is way ahead of the curve in the deployment of DERs,” he said. “AEMO’s vision and ambition in future-proofing its energy grid can be replicated as other countries pursue similar decarbonisation goals.”
AEMO expects to begin testing Project EDGE in April 2022, with project completion in March 2023.
The project was recently awarded almost $13 million in funding by the Australian Renewable Energy Agency (ARENA).
ARENA chief executive Darren Miller said at the time the trial would provide the blueprint for integrating DER into the grid.
“As the uptake of rooftop solar, home batteries, home energy management systems, electric vehicles and smart appliances is expected to grow, it is clear that these technologies are going to transform our electricity system,” he said.
“While these devices and technologies can make our grid more reliable, affordable and lower emission, rapid uptake is already impacting how the grid is managed and highlighting the limitations of our existing market frameworks.
“This trial will help to develop trading mechanisms to maximise the economic benefits to customers and the system and minimise the costs of supply to all energy customers.”
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