AGILE - Aggregators as diGital Intermediaries in Local Electricity markets: EPSRC/ESC Follow on Funding

There has been a huge investment in micro generation from both customers and small scale providers, particularly in residential PV. Individual participation of these assets (offers to buy/sell/store energy) by micro/domestic scale agents in local, distributed electricity markets is currently a significant business and technological challenge in the UK's large-scale energy systems. A solution to enable energy trading between small scale generators and consumers that provides a compelling business case for storage and further penetration of embedded renewables is essential.

New aggregators, that is, new market players who are highly adaptable in terms of dynamically organising Distributed Energy Resources (DERs), are emerging to provide a retail service to distributed groups of customers who could not manage to act in the energy market on their own. These aggregators would deal with requirements of the wider energy system by utilising diverse and multiple low carbon and renewable technologies for generation and storage to provide local/micro-grid solutions. However, there are significant barriers to the emergence of such entities which can be overcome by adoption of contemporary digital technologies.

Our AGILE proposal sets out an integrated digital solution which can deliver suitable mechanisms to allow aggregators to offer the wider energy market bundled DER services of particular duration and value. To allow this, the preferences and descriptions of DERs, which form smart, micro contracts, will be articulated using an agent based model. Bids and offers will be enabled through integration with Distributed Ledger Technologies (DLTs) which will provide a trustworthy implementation of the scheme through a distributed database trusted by all agents. AGILE will examine the synergies between several permissioned, public, and hybrid DLTs as there are key questions about which type of ledger and related services is best for this elastic aggregator approach.

An optimisation model will recommend particular configurations of DERs satisfying several portfolio optimisation strategies (financial, environmental and social welfare). The validation of preferred configurations of DERs is an essential step to ensure the feasibility of DER incorporation and a digitised, stylised IEEE network will be integrated into the digital solution to achieve this. Validation using a range of realistic network topologies will be performed to evaluate the effect on aggregator business models.

AGILE deliverables, findings and activities will have broad ranging direct and indirect impacts across social, environmental and economic domains. The importance of aggregators in the presence of high renewables penetration in a distributed energy network will directly aid the delivery of smart technologies and processes. Peer-to-peer systems, supported by emerging technological enablers (e.g. Blockchain, Smart Metering), offer new ways of conducting business. In the energy distribution field, they offer the potential for prosumers and consumers to trade directly locally, spurring investment in renewables and energy storage, therefore driving down costs.

Key beneficiaries from the AGILE research include innovators in energy retail and, through these, consumers will benefit through potential savings in unit energy costs with higher resolution measurement and settlement, providing the trust and transparency that many consumer champions believe is missing from the existing energy business model. ESCos (energy service companies) who facilitate groups of customer demand or energy prosumers who provide demand response services will equally have new shared information of the technical considerations to support novel energy delivery practices.

Additional beneficiaries will include Distribution Network Operators (DNO), small generation providers and rural communities served by networks with minimal capacity who will see benefits such as deferred infrastructure investment costs, increased return on investment and improved system resilience. The work will also validate the architecting of the envisaged Distribution System Operator (DSO) role, where closer management and operation of distributed areas of networks will be established at the lower voltage levels.
Our impact areas include:

Flexibility and environmental: This new form of aggregator presents an opportunity for consumers to offer flexibility to the system while reducing the amount of fossil fuel required to meet their electricity demands, resulting in less GHG emissions and aiding grid decarbonisation. This of direct benefit for the environment and society. The digital aggregator presents a further opportunity for demand side response (DSR) and enabling Distributed Energy Resources (DERs) to participate in meeting and levelling demand, domestic consumers, through smart contracts and locally available information. The aggregate of many micro pro-active participants in the energy system creates flexibility of a scale not previously envisaged, to enable widespread balancing of generation and supply, reducing dependence on imports, and reliance on fossil fuels and improving efficiency.
Competition and equity: Market participation of digital aggregators will also improve competitive pricing of energy services to consumer markets, particularly when multiple aggregators can operate with alternative business models, attracting customers to those aggregators who can best meet their priorities. Improved competition and equity through transparency helps regulation of the domestic energy market.

Resilience and Security: The ability to offer variable DERs which will be digitally and optimally balanced through resources across the network, strengthens energy system resilience and security of supply, minimising risk of blackouts on the grid to end customers, which are disruptive on a social level as well as effecting productivity at an industry/economic level.

Economic: Economic activities related to smart energy demand, data management and providing smartness to the network will create significant job opportunities over the next two decades, with likely continued expansion thereafter. These positions would result from: the adoption of smart grid technology; energy efficiency and DSR programs; integration of renewable energy resources; electricity storage; and electric vehicle charging support and optimisation. AGILE aligns with the UK Government's digital strategy.