Last week, Illinois utility Ameren unveiled the latest utility project to explore how distributed energy resources can be coordinated to serve as grid and energy market players, using the blockchain and distributed ledger technology. Like many pilots of its kind, it will run via software simulation at first ― but it also has Ameren’s state-of-the-art microgrid to eventually test it out under real-world conditions. 

The broad vision of Ameren's new project with startup Opus One Solutions is to test the viability of a transactive energy marketplace. The idea is to allow distributed energy resources (DERs) like rooftop solar systems, behind-the-meter batteries, plug-in electric vehicles, smart building energy controls, and backup generators to communicate and make decisions autonomously, as well as collectively, to meet a variety of needs, from optimizing their own energy mix, to serving as active participants in grid services or energy markets.  

As we’ve covered over the years, transactive energy is an aspiration rather than a reality at present. The biggest transactive energy pilot project in the U.S., which ran for about two years in the Pacific Northwest and concluded in 2015, provided a comprehensive overview of the key challenges in enabling such a concept at the regional scale. 

But Ameren, like many of its fellow utilities experimenting with blockchain, is starting at a smaller scale ― specifically, modeling the interactions of the DERs that make up its $5 million microgrid at its Technology Applications Center near the campus of the University of Illinois at Urbana-Champaign. 

The microgrid, which went live in 2016, features 1 megawatt of natural-gas generation, 250 kilowatts of battery storage, 125 kilowatts of solar PV and a 100-kilowatt wind turbine. It’s also one of the few in the world that can actually serve live customers on the distribution circuit it’s connected to, rather than just the microgrid site itself, according to Ameren. 

That makes it an ideal test bed for Ameren’s overarching plan to explore the business, operational and technical challenges and capabilities of serving a “future distribution-domain energy market, should one develop in its service territory,” Alex Rojas, Ameren’s director of distributed technologies, explained in an interview last week. 

“As a primary goal, this project will inform Ameren about the applicability of technologies and operational models in a future transactive energy platform in the medium-voltage electric distribution domain,” he said.

While that’s not something that Illinois lawmakers or regulators are mandating right now, it is one of the long-range concepts uniting efforts in many states to bring their regulatory structures up to speed with the rise in rooftop solar, behind-the-meter batteries, plug-in electric vehicles, and other potentially disruptive DERs on their systems.  

Testing a distribution grid-level energy market

The project with Opus One will roll out in two phases: a computer simulation stage and a testing phase that will include the microgrid’s actual component systems and controls. 

Ameren will first create the simulations to model the microgrid’s wind and solar systems, natural-gas turbine and battery banks, which range in terms of control and dispatchability, Rojas said ― very little control of solar and wind, some flexibility with the turbine, and batteries that can charge and discharge to serve a variety of needs.

The next step is to create what Rojas called a “gaming environment” ― a simulated market, featuring the real-world day-ahead, hour-ahead and 15-minute-ahead prices for energy provided at the microgrid’s locational marginal pricing (LMP) hub from the transmission system managed by grid operator MISO. 

While this LMP price is for wholesale electricity, Ameren will be slightly modifying that market signal by adding data of importance to the distribution grid operator as well, or as Rojas called it, a “D-LMP” value. Just how this additional value of “D” will be calculated is still under development, but will include key data like limitations on distribution circuit carrying capacity, he said. 

The idea of a distribution grid-level energy market is one that’s part of New York’s Reforming the Energy Vision initiative, and the concept also informs efforts in states like California, Hawaii, Nevada and Minnesota to integrate DERs into utilities’ distribution grid investment plans. But Illinois lawmakers and regulators are also pushing the state’s investor-owned utilities to integrate DERs into their grid plans, with the microgrid as a key focus of those efforts. 

Last year, for example, Illinois regulators approved ComEd’s plan to spend $25 million to build a microgrid that’s integrated with an existing microgrid at the Illinois Institute of Technology, after the utility revamped the plan to open it to third-party DER developers and seek as much solar, energy storage and other alternatives to standby diesel-fueled generators as possible. The regulator's decision also asked ComEd to begin to design a “microgrid services tariff,” one that could enable its customers to band together and request the utility’s help in integrating their DER capabilities across its existing grid infrastructure. 

Blockchain's role

Ameren's project will evaluate blockchain “at the middle level” of the simulation, as a distributed ledger system, Rojas said. This is one of the most common ways in which blockchain is being envisioned for use by utilities, since it can offer a much easier and cheaper way to track all kinds of data across automated devices, including auditable proof of how much energy they generated or consumed from second to second, and whether or not their behavior met the terms of whatever services they may be seeking payment for performing. 

We've been been tracking the fast-growing number of utility pilot projects testing blockchain’s distributed ledger capabilities across multiple use cases, from tracking distributed solar, battery and EV charging in a Silicon Valley six-story parking garage, to certifying corporate clean energy deliveries in Spain, to enabling the trading of rooftop solar credits in Japan

Rojas declined to name the blockchain technology provider that Ameren and Opus One are working with to implement this part of the project. Greentech Media’s ongoing coverage has highlighted several companies in the space that are winning significant contracts with utilities around the globe, including Australia-based Power Ledger and LO3 Energy.

“To be mindful of legacy systems, I made sure the scope also involves central ledger systems,” Rojas added ― not just as a backup, but to see whether certain parts of the process Ameren is testing are in fact better served by a centralized, versus distributed, IT infrastructure. As he pointed out, “it is still undetermined if blockchain is the solution to all problems” ― a statement that echoes broader concerns from parts of the energy industry that blockchain’s hype may be outrunning its technical capabilities. 

As for how the generators and batteries at Ameren’s microgrid will react to those signals, that’s where Opus One’s GridOS platform steps in. The Ontario, Canada-based startup has technology that provides real-time, two-way power flow modeling of distribution circuits for projects including National Grid’s distributed system platform pilot in Buffalo, New York, transactive microgrids in Nova Scotia, and most recently, a collaboration with Hawaiian Electric to apply its data to the utility’s integrated distribution planning needs. Ameren is one of 14 utility members of Energy Impact Partners, a private investment fund that has invested in Opus One as well as 20 other startups.

Hari Suthan, Opus One’s chief strategic growth and policy officer, noted that the Ameren project was the company’s first to evaluate blockchain technology, as well as the most varied to date in terms of the types of DERs it incorporates. “It gives us the ability to engage a variety of prosumers in the market,” he said, referring to utility customers that are producing as well as consuming energy, from the simplest solar-equipped households to the most complex microgrids. 

In terms of evaluating the use of blockchain for Ameren’s microgrid-transactive energy pilot, “we will be looking for, does blockchain [apply] in certain areas?” Suthan said. “Does it have the solution offering for Ameren, and also for the customer base?” 

While Opus One is “not a blockchain company,” it and its partners are keenly interested in the technology's capabilities, he noted. Last year, New York state’s four biggest utilities, including Opus One partner National Grid, wrote a joint op-ed describing the “transformative” potential of blockchain in the industry, and laying out the key use cases including distributed ledgers and smart contracts for energy efficiency and demand-response measurement and verification, DER interconnection, EV charging across multiple utilities, and eventually, transactive energy.