Researchers Develop Local Electricity Trading System to Cut Costs

As energy prices continue to rise, researchers at Washington State University (WSU) have made significant strides in developing a local electricity trading system that could potentially lower costs for communities and enhance grid reliability. In collaboration with Avista Utilities and its Energy Innovation Lab, WSU conducted a simulation of an electricity trading system utilizing solar power and battery storage within a neighborhood.

During a proof-of-concept test spanning five days, the researchers discovered potential energy cost savings of approximately 12% for the area involved. The findings were documented in the IEEE Transactions on Industry Applications, highlighting the importance of innovative solutions in an evolving energy landscape.

Optimizing Local Energy Resources

John Theisen, a PhD candidate in the School of Electrical Engineering and Computer Science, served as the lead author on the paper. He emphasized the need for coordinated operations at the distribution level, stating, “If you can coordinate and move electricity around in a way that is optimal, you can increase efficiency, offer better utilization, and save a lot of money for the people operating the assets, the utility companies, and for the consumers.”

The current energy grid differs significantly from its centralized past. Power increasingly comes from distributed sources such as rooftop solar panels and community wind projects. With rising electricity demand and the lengthy process of building new transmission lines, local resource coordination has become essential for enhancing grid efficiency and reducing costs over time.

WSU’s system facilitates the trading and sharing of energy from assets like solar panels and batteries at the local level. Historically, utilities have traded electricity at the large-scale transmission level for decades. Grid operators purchase energy when prices are low and sell when they have a surplus, with prices fluctuating throughout the day and year. In contrast, the WSU system focuses on the local distribution level, where electricity is transformed into safe, usable voltages for homes and businesses.

Implementation and Results of the Study

The research tested battery assets and electricity feeders located in Spokane’s Catalyst Building and South Landing Eco-District. The team developed a cloud-based platform that analyzed energy prices and solar forecasts, enabling asset owners to trade energy locally or tap into the larger grid. The test project represented a section of a distribution feeder, accounting for about one-eighth of the region’s substation.

The system allowed for responsive trading, enabling asset owners to adjust to changes in energy prices throughout the day. Theisen noted the process was “pretty seamless.” Under the simulated conditions over the five-day period, potential savings were estimated at around $1,000 for the selected assets.

Theisen pointed out that if such assets were available throughout the distribution system with similar participation rates, significant savings could accumulate, potentially amounting to hundreds of thousands of dollars annually.

While current energy prices reflect necessary infrastructure upgrades and clean energy mandates, projects like this aim to mitigate future costs and enhance efficiency. The savings generated from smarter energy systems could enable utilities to reinvest in grid improvements and resilience measures.

“The only way you can get around rising electricity prices is by being more energy efficient and figuring out these smarter ways to coordinate electricity,” Theisen concluded, underscoring the urgency of innovative solutions in the current energy market.