elDesign, Forest Energy and LO3 Energy launch first local solar energy trading market
- Cutting-edge tech creates App-based auctions for local electricity
- Fujimi residents to buy and sell energy within their community
- Local energy market pricing will help replace feed-in tariffs in Japan
One of Japan’s first marketplaces for local solar energy is being launched in Fujimi, Nagano, energy consulting and incubation service provider elDesign, energy retailer Forest Energy, and US technology innovator LO3 Energy confirmed today.
The innovative new marketplace will allow prosumers to sell surplus home solar energy to local residents and businesses and could eventually expand to a larger scale.
It will use LO3’s local energy marketplace platform, Pando, to log and aggregate energy supplies and match bidders with sellers using an online auction.
LO3 Energy CEO Lawrence Orsini said: “The liberalization of the energy industry and solar PVs starting to reach the end of their feed-in-tariff contract period in Japan has created one of the most progressive markets in the world and there are some exciting opportunities opening up.
“The growth of distributed renewable resources (DERs) is making local energy markets a critical part of energy delivery. Innovative new energy companies like elDesign can capitalize on that by being one of the first to market.
“Consumers are really starting to understand energy better and they are looking for better energy choice at better prices. That is exactly what we are going to give them.”
elDesign spokesperson Ariunsaikhan Munkhtulga added: “The energy industry in Japan is entering a whole new era. New technologies are creating major opportunities for firms like us and we are looking to use them to grow our business.
“We are always looking to help local communities, and have seen interest from the community that suggests accessing local energy is high on the list of consumer priorities. Innovative technologies like blockchain can support this. We are very pleased to be working with LO3 to bring these new
consumer opportunities to Japan, as we were impressed by the advanced level of their technology when we visited their site in Brooklyn.”
elDesign has been providing consulting and incubation services in the energy sector since 2014, and supports both large energy enterprises and startups to run sustainable businesses.
Its subsidiary community-based retailer, Forest Energy, began supplying energy in 2017. It offers local customers a reduced rate compared to the incumbent supplier and sends Tokyo customers special ‘made-in-Nagano’ gifts as incentives.
In this project, elDesign will be in charge of project management while Forest Energy provides its retail functionality. The Fujimi community has shown significant interest in locally generated energy and elDesign is targeting municipal and residential solar panel owners to get involved.
The aim of the project is to differentiate elDesign within the market and give customers greater choice of local clean energy, more financial control and better opportunities to help build community-based energy systems.
The initial pilot project is expected to involve 30 participants. If successful, the platform will then be developed in additional locations and municipalities, and potentially expanded across the country with a larger player .
DRIVEN BY CHANGE
Alongside the liberalization of the industry, Japan’s government has also mandated a near doubling of renewable energy generation by 2030, focusing on reducing emissions to meet global targets.
DERs will play a major part in this, but the feed-in tariff that encouraged their growth is coming to an end, opening up opportunities for new ways to compensate owners, with auction-based pricing a proven solution. Over half a million residential solar PV systems reached the end of their feed-in tariff contracts this year and an additional 200,000 per year are expected to similarly transition in coming years.
LO3 is already running projects on four continents and a recently concluded study in Australia based on a year of data clearly demonstrated the appetite for such markets as well as the feasibility of financial benefits for all participants, including prosumers, consumers, communities and retailers.
Plans for this project were initiated in New York at the end of 2018, when representatives from elDesign visited LO3’s office in Brooklyn.
elDesign is now recruiting participants for the local market and will then be able to rapidly deploy the platform by connecting LO3 interfaces to existing
systems without disrupting existing billing and customer information systems.
Consumers will be able to express a willingness to pay via a mobile app while prosumers are informed about what price they have received for their surplus generation.
It will initially be deployed as a ‘virtual’ marketplace, allowing participants to buy and sell local clean energy virtually while the two companies work with policymakers to enable commercial transactions.
Orsini added: “This is a very important step for LO3 in Japan. We already have two projects running with other firms, Marubeni and Kyocera, but this one is the first to take local energy markets right to real end users.
“The energy industry is moving fast and this new project will help accelerate that in Japan. Once regulators clarify conditions for commercial transactions, we believe the floodgates will open and LEMs will be everywhere.”
ABOUT LO3 ENERGY
LO3 Energy works with energy providers to create Local Energy Market (LEM) platforms, using our Pando product, that are reshaping the energy future, enabling local renewable Distributed Energy Resources (DERs) to be pooled, transacted and optimized at a community level. Founded in 2015, the company is headquartered in Portland, Oregon with regional offices around the world and employs a large team of energy, technology and trading professionals. It is backed by energy and technology companies including Siemens, Centrica and Shell and has more than 10 operational projects with leading energy service providers around the world.
ABOUT ELDESIGN / FOREST ENERGY
elDesign is an energy consulting and incubation service provider, focusing on regional revitalization and innovation for sustainable energy. elDesign was established in 2014 in Tokyo, Japan, with offices throughout Japan and ongoing collaborations with global players. Forest Energy is a subsidiary of elDesign conducting community-based electricity retail. Established in 2016, Forest Energy commenced energy retail and supplies in 2017. elDesign and Forest Energy maintain a strong focus on both technological innovation and local community involvement. For more information visit eldesign.jp/en/ OR www.mori-energy.com/