Switzerland’s first local electricity market has successfully completed field testing in January 2020. For one year, 37 households in Walenstadt traded locally produced solar power within their own neighborhood. Participants could directly buy and sell solar power via a portal on which they were able to set their own purchase and sales price limits for solar power. The resulting transactions were processed automatically via a blockchain.

After a year in the field, project participants from research and industry give a positive appraisal. The 37 households covered 33% of their electricity demand with solar power produced in the neighborhood – twice as much as beforehand. The local electricity supplier, Water and Electricity Works Walenstadt (WEW), not only provided access to its distribution grid but also purchased surplus solar power and supplied the community with “normal” power when the supply of solar power was insufficient. This innovative project, which is supported by the Swiss Federal Office of Energy (SFOE) as a flagship project, aimed not only to verify technical feasibility in the field but also to study user behavior.

Almost no one wants to pay more

One new feature of the system was that participants could use a portal to set a minimum sales price for their solar power and a maximum purchase price to buy solar power from their neighbors. “The participants frequently adjusted the price limits, especially at the beginning. But the price limit they set for buying local solar power was rarely higher than for normal power from the grid,” says Verena Tiefenbeck, leader of the Bits to Energy Lab at ETH Zurich. For their part, the households with solar power systems also sought to make a profit.

In order to compare different market models, the researchers deactivated the feature allowing individual pricing for a period of one month and replaced it with an automatic pricing system. The price varied automatically depending on whether the solar power was in relatively scarce supply or in surplus. In surveys, a little over half of households stated that they preferred automatic pricing.

Effectively raising awareness

The function of monitoring the production and consumption of electric power, as well as their purchases and sales, in real time, contributed to raising awareness of the users. Indeed, many participants said that they now use electrical appliances more when the sun is shining. They saw the peak and off-peak tariff system that still applies today as outdated when applied to renewable energies.

The pilot phase of the local electricity market as part of the SFOE flagship project has now come to an end. However, a follow-up project has been launched to ensure a seamless transition, albeit in modified form. The user portal has been redesigned and streamlined slightly, and prices are now set automatically. In the coming months, the hardware will gradually be replaced with series-produced equipment, and there are also plans to develop the trading platform into a marketable product. This aim is being pursued by the spin-off “Exnaton”, which was founded by members of the development team at ETH Zurich. (SP)

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Positive appraisal: For one year, 37 households in Walenstadt have sold solar power in a local blockchain-based electricity market.