Researchers Develop Local Electricity Trading System to Cut Costs

As energy prices continue to rise across the United States, researchers at Washington State University (WSU) have developed a local electricity trading system that could lead to significant cost savings for communities. Working in collaboration with Avista Utilities and its Energy Innovation Lab, WSU researchers tested a proof-of-concept model for electricity trading involving solar energy and battery storage within a neighborhood.

The simulation, conducted over a five-day period, demonstrated potential energy cost savings of approximately 12% for the area involved in the study. The findings, published in the IEEE Transactions on Industry Applications, present a promising solution to the challenges posed by rising energy prices.

Innovative Approach to Energy Distribution

According to John Theisen, lead author of the study and a PhD candidate in the School of Electrical Engineering and Computer Science at WSU, the evolving electricity industry requires practical strategies for coordinated operations at the distribution level. “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,” Theisen explained.

The traditional energy grid is shifting from a centralized model to one that incorporates numerous distributed sources. This includes renewable energy options such as rooftop solar panels and smaller community wind projects. As electricity demand increases, the construction of new transmission lines becomes increasingly time-consuming. By coordinating resources at a local level, the grid can become more efficient and cost-effective.

The WSU-developed system facilitates the trading and sharing of energy generated from assets like solar panels and batteries at the local distribution level. For instance, a hospital or university may possess a battery that is primarily used for backup power during emergencies. The research explores the potential for optimizing the use of these assets to enhance local electricity trading, akin to trading practices at the transmission level.

Potential Savings and Future Implications

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

The implementation of this system allowed asset owners to respond dynamically to fluctuations in energy prices throughout the day. “It was pretty seamless,” Theisen remarked. Under the conditions tested, the simulations indicated potential savings of around $1,000 for the selected assets over the period analyzed. “If those kinds of assets existed everywhere in the distribution system at that level of participation, you can save hundreds of thousands of dollars a year on costs,” he added.

Avista’s involvement in the study highlights the importance of such innovative projects in addressing rising energy prices, which reflect ongoing infrastructure upgrades and clean energy mandates. By enhancing efficiency through smarter systems, savings generated could be reinvested into grid improvements and resilience initiatives.

“The only way you can get around” rising electricity costs, Theisen concluded, “is by being more energy efficient and figuring out smarter ways to coordinate electricity.”