What’s mine is yours: the rise of alternative-energy retail

Dr George Koutitas was working on smart grids as a post-doctorate scholar in Greece when an idea came to him.

“I was watching the TV news in my hometown in Greece and I saw a family that was living in cold and dark homes because they couldn’t afford to pay for electricity, so the utility cut off their supply. I really wanted to help this family, and I realised that there is no easy way for me to donate energy and give energy to a family of my choice.”

The fact it’s not easy to trade energy privately is a challenge waiting to be solved. It’s pretty easy to generate power in 2015. You no longer need a massive utility company to keep your own lights on. Wind turbines, solar panels and even hydroelectric systems are now within reach of homeowners. A problem not quite solved yet is what to do with an individual’s extra power, which is likely to become more of an issue as the technology improves.

Koutitas announced Gridmates in 2014. It’s a software platform for people to donate energy to those who can’t afford to pay their power bills

Traditionally, extra energy generated is sold back into the grid and the owner receives a subsidy for their contribution. Rates and regulations vary greatly from country to country, but you can at least guarantee some kind of discount – even if it is quite small. This is no longer the only option.

The first, and perhaps most obvious, solution is home storage. Giant batteries to store the extra power have been springing up from retailers recently. The Tesla Powerwall is probably the most aesthetically pleasing one announced, but it is hardly alone in the market. Bosch and Samsung are among some of the many companies currently selling this early wave of home batteries. They are available in a range of capacities, although their usefulness and value will vary depending on the local price of energy, how much you can generate, and your power consumption.

This is where Koutitas saw a missing link in the grid. People are more energy conscious today than ever before. Companies like Nest give people tremendous control over their power usage, and now people can create their power too.

“So imagine that every home can produce, manage and store electricity. What is missing? The ability to transact. The ability to give energy to someone else, either a friend or family member, or a person in need. That is exactly what we are focusing on.”

Koutitas announced Gridmates in 2014. It’s a software platform for people to donate energy to those who can’t afford to pay their power bills.

“Utilities and energy retailers already collaborate and share existing programs, but they are not designed to engage young people, they are not transparent, they are not dynamic. So there is a lack of a platform to connect givers of energy with people in need. That’s why we created Gridmates. You click, and give energy to someone else.”

It’s partnered with another charity, Mobile Loaves and Fishes, on its first big project. The Community First! Village is just outside of Austin, Texas. The village was designed by Mobile Loaves and Fishes to house 240 chronically homeless people in virtually at-cost accommodation. Electricity is now one less bill for them to worry about, as anyone who signs up to Gridmates gets partnered with the Community First! Village as their first grid-mate.

Charity isn’t the only use for new energy transaction platforms. The Netherlands is home to online start-up Vandebron, an online peer-to-peer energy marketplace that directly connects small-scale producers to energy buyers. The retailers are mostly farmers who have invested in solar or wind power to run their properties, but are producing more than they can use. Owners set a price, and sell their power on to others. The website looks a little like a dating site, with each producer given space on their page to post photos explain a little about who they are and how they generate energy. It’s very personal and friendly, which is surprising given that the concept of energy production is usually treated as quite an abstract idea by retailers. This isn’t an isolated programme. Piclo was launched by Open Utility in partnership with Good Energy to test the viability of a similar platform in the UK. Both are very early in development, but the prevalence of smart meters tracking an individual’s power usage allows virtually anyone to sign up as an energy retailer.

Koutitas said that he sees energy trading platforms becoming bigger in the future.

“The technology exists, but it’s an emerging business model. It currently works in areas and countries where the market is deregulated, so it’s a free energy market, and you can connect directly with producers of energy.”

Programmes like Vandebron are illegal where the energy market isn’t deregulated, so laws may have to change in some regions for plans like this to become possible. Another barrier is that power generation isn’t quite at the point where people can be self-sufficient in terms of generation; however the technology is improving quickly. Potentially investments in solar could be seen as a small source of income for households, like the few dollars a month a small savings account might generate in interest. Currently Gridmates provides a calculator on its website that gives an estimation of power generated, so users can elect to donate a percentage of the money saved from regular bills.

The sector is still young, but Koutitas is confident that it has a future in tandem with the grid.

“It’s a small asset, but what we see with Gridmates is that the orchestration, in order for this model to be more efficient, would be made by utilities, not by the individuals. So what we do with Gridmates is we build the platform in order to enable people, individuals or even commercial units, to find Gridmates to send power to friends, family or people in need.”

We will not see widespread usage and adoption of alternative-energy retail soon. While the platforms are useful for people who privately own a small solar or wind plant, the average home installation is not yet efficient enough for people to be running a DIY power plant. However this may not be the case for much longer and private solar panels could soon become a viable investment. It may be an answer to a problem that doesn’t exist yet, but people already see the potential in alternative-energy retail.