You are energy.

The Ultimate Introductory Guide to Becoming a Prosumer

“There (are) two forms of energy — You have the electrical energy and you have the human energy… It can go around the problem, like water” - Agamemnon Otero, We the Power, 2021

Decarbonising our lifestyles is a huge, but necessary undertaking. Producing your own energy and forming energy communities with your neighbours is one of the coolest and most effective ways for a small group of people (or even just an individual) to make a difference. But what does this mean? How can I actually go about doing this? In this article we provide a whistle-stop tour of why and how anyone and everyone should become a prosumer. Shifting power back to citizens, strengthening communities and boosting local economies; what’s not to love?

Energy 101: Key Terms

Energy and electricity are often used interchangeably, though they aren’t the same thing. You’ll find it hard to come across an explanation of energy that doesn’t quote the law of conservation of energy, which states that “energy can neither be created nor destroyed — only converted from one form of energy to another.” While energy describes the substance transported by energy carriers, from the point of supply to consumption, electricity is one of these carriers. The main energy carriers supplying the world today are fossil fuels, biofuels, nuclear fuels, the wind and solar radiation. All electricity is energy, but not all energy is electricity.

Then when we talk about how fast energy is moved from one point to another, by electricity for example, we’re talking about power. The faster electricity can move energy, the more powerful it is.

A prosumer is someone who both produces and consumes (mainly their own) electricity. Anyone can be a prosumer — your neighbour, your family, YOU!

Communities are equal partnerships, built on relationships of trust, where all parties take risks, and share gains and losses. Add energy to it and we get energy communities. These are groups of citizens that voluntarily organise themselves to collectively take action on renewable energy, energy efficiency or other energy-related activities. A closer look at existing energy communities reveals that they are incredibly diverse when it comes to ownership, governance, organisational structure, scale of activities, type of activities, energy sources used, financing mix, etc.

What is the grid? It is the infrastructure of electricity production, transmission, storage, and consumption. It was originally designed to provide a one-directional source of constant electricity, supplied by fossil fuels, moving from a centralised source of power to individual consumers and businesses, illustrated in the image below

Unfortunately, the traditional grid system is very rigid, limiting the role of renewables and prosumers. To make their integration possible, we need grid flexibility. This is the extent to which the grid facilitates electricity variability, decentralisation and the integration of renewable technologies. Renewables are intermittent. We cannot demand the sun to shine and the wind to blow whenever we want, unlike the current system which simply burns more fossil fuels whenever the grid demands it — and so, the grid must become more flexible. To do this well, we need to make use of energy storage assets, readily dispatchable renewables (like hydropower) and demand-side flexibility, meaning adjustments in consumer behaviour and using smart assets, such as a hot water tank programmed to heat up when the sun is shining.

In summary: grid flexibility = important.

As the grid is currently centralised, almost all of the control is held on this one side of the system. For consumers to be in control of their own energy, we need decentralisation. This is all about putting households in the driver’s seat and enabling individuals to take charge of their own energy and become more self-sufficient, unlocking new degrees of freedom.

When we say self-sufficiency, we are talking about the amount of electricity you consume that you produce yourself to satisfy your electricity demand (or your local community), i.e. how able you are to support your own electricity needs. The more your total electricity consumption is supplied by your own production, and not from the grid, the more self-sufficient you are. This is achieved when producers, consumers and prosumers come together and form local energy markets, where they trade energy with each other (peer-to-peer energy trading); this reduces individual grid dependence and supports the grid infrastructure by reducing congestion (energy traffic jams).

Now, let’s talk about the technologies making this transition possible.

We refer to the different elements of an energy system as energy assets. These include consumption load profiles, storage batteries and generation assets such as solar panels or wind turbines.

Consumption load profiles (a.k.a loads or plugs) simply refer to the total amount of electricity consumed or demanded within a household, such as a student flatshare or a retired couple’s home over a certain period of time. Here is a graph of a typical residential load profile:

We all know that batteries play an important role in powering the various gadgets and appliances we own, but did you know that they can be used to store electricity? This makes batteries incredibly useful assets for prosumers. Batteries can also be used by businesses to enhance energy efficiency. An example is Greener Power Solutions, a company that transports their fleet of batteries around the world to relieve grid congestion with their portable batteries, helping festivals, construction sites, and everything in between to become more sustainable.

Now that you know the lingo, let’s start putting the pieces together…

It’s exciting to prosume!

The main motivations for people to start producing their own electricity are to reduce their electricity bill and carbon footprint, become less reliant on the centralised grid and gain autonomy over their own energy use.

Lucilla Parisi, mayor of Roseto Valfortore in Italy, has vocalised her support for the local energy community:

Energy communities will be protagonists of a new energy regime: no longer centralised and hierarchical but distributed and collaborative. This is a way towards a more equitable and sustainable future, where every citizen will be able to produce and share green energy with others, combining environmental benefits with economic and social ones”

We’ve broken down the main benefits for you below:

1.Strengthens communities — When members of a community gain control over their energy production and use, new bonds are formed. Sharing energy and asset ownership enhances strength and spirit within a community.

2. Collective action — It’s easy to feel like you don’t have the necessary knowledge or financial resources, or that you don’t have the time to start prosuming. These barriers can be overcome when members of a community come together and share their knowledge and resources. Collective action changes this energy journey from one that seems daunting and overwhelming to one that is enjoyable and can be tackled as a team.

3. Economically empowering — Money that normally flows out of a community stays local, boosting the local economy and employment. Better again, once the initial cost of installing the energy assets is paid off, prosumers and other community members can start profiting from their energy production and use the profits towards their own and community benefit.

4. Tackling energy poverty — Energy poverty is a major societal challenge, which local energy markets and energy communities can address by improving accessibility and reliability. Recent Greek legislation helps vulnerable households start prosuming and gain access to clean energy based on a principle of solidarity, by including special clauses promoting energy self-sufficiency and security in island municipalities. Energy communities are also an important solution in other parts of the world that struggle with energy access, and one example is the work of SOLshare in Bangladesh with home solar systems.

5. Reduces CO2 emissions — By prosuming, individuals and communities have the ability to accelerate energy decarbonisation by shifting their energy consumption from fossil fuel — based sources to sustainable, local renewable energy. A prime example of a local action making a significant global impact.

6. Promotes sustainability — Once people get a taste of how gratifying sustainability can be, they want more… Usually this takes the form of reinvesting the earnings generated by the energy production into other local sustainable initiatives, such as installing electric bike charging stations or insulation in public buildings, a practice many energy communities follow.

7. New degrees of freedom — Energy is a crucial element to our lives, yet for many of us it’s something we don’t even think about. By default, we let other people take care of it for us. Prosuming and forming energy communities allows ordinary people to unlock degrees of freedom previously unimagined, such as choosing one’s trading partner, giving power back to the people (literally).

“Focus on building an ecosystem — it’s not the network connections that matter, but the human connections” Ewald Hesse, Grid Singularity, CEO.

Take action!

1.Start building your community by running simulations at gridsingularity.com!

Grid Singularity allows people from all over the world to connect with their peers and create personalised energy exchanges for their community. If you played Sims as a kid or still enjoy Minecraft, then you’ll enjoy the Grid Singularity Exchange. You can build houses and create communities (in free simulations), only we want to take you to the next level and help you make those simulations reality.

The purpose of creating simulations is to mimic what your energy community might look like, figuring out the details of what assets best suit your needs so you know what to buy when you’re ready to start prosuming. The simulations digitally represent household and community assets, such as consumption profile, solar panels and batteries. So, for example, if you’re a young couple interested in buying a solar panel and consuming its energy, you can choose your location on the map, add a young couple household profile, add a solar panel and play around with the capacity settings, add the consumption load profile and voila, let the magic begin. By changing asset profiles and analysing different scenarios (e.g. add more solar panels or storage capacity), you can optimise the configuration of your energy community, seeing the savings you can make on your energy bill and checking out other cool results such as your self-sufficiency levels. Have fun and test out alternative scenarios with different houses and assets and make sure to create an account so your progress can be saved. To support you, we have prepared a tutorial video:

2. Once the simulation helps you design the best set up for your energy community, you can move one step closer to reality by connecting your digital energy community (live data streams from real energy assets) to the Grid Singularity Test Network.

For this step you will need the support of your local aggregator or energy service provider, which absorbs any excess complexity, such as energy asset management, while maintaining the autonomy of the community. Grid Singularity collaborates with aggregators to allow prosumers and energy communities to take this next step. If your aggregator is not involved yet, let them know they can be!

Participants in local energy markets enabled by Grid Singularity enjoy enhanced degrees of freedom, which allow them to consume and trade energy based on who and where it comes from. Energy preferences are converted into trading strategies, carried out by digital smart agents that represent energy assets in your household. Grid operators can in turn access local flexibility by implementing advanced price signals (dynamic grid fees) to alleviate the pressure on the wider grid, avoiding blackouts and safeguarding valuable resources.

3. In the next stage of your energy journey there are some questions you need to consider. You should be able to install energy assets and start consuming your own energy without too much hassle, but when it comes to trading energy with your neighbours or selling surplus energy back to the grid, it’s not so simple. Governments say they want to support prosumers but the reforms are not always fast. We advise checking your country’s regulations to be aware of what is possible where you live. The REScoop toolbox has some fantastic country-specific guides which can help you learn more about your local energy laws, as well as the resource list at the end of their practical guide to setting up an energy community.

If it’s not possible to add assets to your house, some communities work around this problem by installing solar panels on the roofs of community buildings in their area, with the energy generated then going back into the community. For example, a group of citizens in Križevci, Croatia, crowdfunded the installation of solar panels on the roof of a local administrative building in their municipality in 2018. Making this journey as a group can also lower financial barriers, with grants and tax incentives available for solar panel purchasing in many municipalities. Groups such as INFORSE, REScoop and Somenergia, or local energy advisors, provide more localised and specific guides to help individuals work through the different stages of their energy journeys, including this financing guide from REScoop.

In addition to providing you with tools to design, evaluate and enjoy the benefits of creating an energy community, Grid Singularity also shares insights on the energy market transformation on this Medium channel, wiki pages, and other social media.

The final step after reading this guide is to launch your energy community, so start the countdown… 3… 2… 1… 🚀 to gridsingularity.com/singularity-map!

This article was authored by the Grid Singularity team with leading contributions by Grace Mullin and Natalija Bytniewski.

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Grid Singularity

Grid Singularity

Engineering open source software that simulates and operates grid-aware energy exchanges, creating local marketplaces that interconnect to form a smart grid