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Podcast S04E05

Collective self-consumption: localisation of the electricity system

Collective self-consumption: localisation of the electricity system

As penetration of photovoltaics grows, so does interest in using the electricity generated locally. In France, there is growing interest and activity in this concept, known as collective self-consumption. Jon Slowe is joined this week by Victoria Tan from Enedis, the main French distribution system operator; Remi Bastien from Enogrid, which providees support and software for collective self-consumption; and Delta-EE expert Rita Desmyter.

Episode transcript

Jon Slowe, Director, Delta-EE

Victoria Trans, Enedis

Rémi Bastien, Enogrid

Rita Desmyter, Delta-EE

 

[00:00:04.550] - Jon Slowe

Welcome to Talking to Energy, a podcast from Delta-EE, the new energy experts. We will be talking about how the energy transition is developing across Europe, with guests who are working at the leading edge of this transition. Hello and welcome to the episode.

[00:00:58.240]

Some of you, like me, might have photovoltaic panels on your roof. And there's an emergence of companies across Europe that are developing businesses built around exactly this concept. And regulators and policy makers in many countries are now looking at how they can adapt rules and regulations to enable this. The topic in many cases is referred to as collective self-consumption.

[00:01:21.550]

Now, of course there's another very important angle to this, apart from feeling good about selling electricity to your neighbour or buying electricity from your neighbour. And that's their local distribution system operator, the network company. Now if lots of customers in a particular neighbourhood export electricity to the grid at the same time then this can cause headaches for the local distribution company.

[00:01:44.530]

From their perspective, and I'm generalising here, it would be much easier to manage the network if there was as much self-consumption as possible. And in the absence of self-consumption the more local balancing of generation and demand the better. So well done for bearing it with me so far; that's a longer introduction than normal. But today it's a slightly more complex topic than normal so a more complex scene to set. And it's a really important topic because this concept of collective self-consumption is being encouraged by the European Commission's Clean Energy Package and is gaining momentum in a number of countries.

[00:02:24.400]

And one of these countries in particular is France. So I'm delighted to be joined today by a company enabling collective self-consumption, and the main French distribution system operator. Plus of course one of our experts here at Delta-EE.

[00:02:38.910]

So let's do a quick introduction. First up is Enogrid, a start up that is enabling communities to develop self-consumption, collective self-consumption. Rémi Bastien is co-founder and CEO of Enogrid. Hello Rémi.

[00:02:55.840] - Rémi Bastien

Hello Jon.

[00:02:56.050] - Jon Slowe

Thanks very much for joining us. And I'll come back to you very shortly and you can tell us a bit more about Enogrid.

[00:03:02.500]

Second up, we have, well moving from a startup to a large distribution system operator in itis responsible for much of the network across France. Victoria Chan is a project manager at Enedis, focusing on this exact topic. Hello Victoria

[00:03:18.460] - Victoria Tan

Hello Jon.

[00:03:21.310] - Jon Slowe

And last but not least our resident expert on the topic here at Delta-EE, Rita Desmyter.

[00:03:33.240] - Rita Desmyter

Hello Jon.

[00:03:33.590] - Jon Slowe

So let's come back Rémi to you first and start with a grid. Now I'm imagining I'm in France, i', A homeowner. I've got Pv on my roof already. I self-consume some, I export the rest. Can you walk us through how Enogrid can help me or what Enogrid can do for me.

[00:03:54.810] - Rémi Bastien

Yes of course. So Enogrid it basically will help you to share your accrued electricity with your neighbour rather than selling it back to the grid. So this is a concept of collective self-consumption that local energy community where you have several consumer group together with one or more bodies who help to trade electricity. So to achieve this Enogrid we support you and guide you every step of the way.

[00:04:22.470]

First we will create the community as a community and its walls. Then we will deal with or set you of the DSO so Enedis. And then once the project is we have an online platform which is here to manage the projects very easily for the participants.

[00:04:42.120] - Jon Slowe

So Remy how big might these communities be. Are we talking 10 people, 100 people, a thousand people or  could it be any number?

[00:04:54.840] - Rémi Bastien

Basically it could be any number.

[00:04:58.190]

So far the number we let's say we are between between four or five people and maximum possible amount. I think it's a hundred people.

[00:05:06.750] - Jon Slowe

Okay. Okay. So and quite the local? Would those people have to be in the same area, on the same street,in the same village for example?

[00:05:14.930] - Rémi Bastien

So rule have changed in France. And as a matter of fact it's changed quite recently. Now the perimeter is two kilometers between the two parties in a maximum of two kilometers between two participant of the collective self-consumption.

[00:05:36.400] - Jon Slowe

Okay. So that's quite a small defined geographic area then?

[00:05:40.490] - Rémi Bastien

It depends on when you are in a city know you meters second of two kilometer diameter is quite big. Yeah. When you are in the country side. Yes it's quite small. Depends on the situation. Okay. But well that you watch we have to note the view is that it's important to note that today it's not that individual people would develop a project of self-consumption, it's more the local government and the social landlord.

[00:06:13.450] - Jon Slowe

Okay. So the initiative then would typically come from the municipality, the local governmental, the social housing provider, and they would then advertise that and they would recruit customers or would that be your job or would that be both of you working together?

[00:06:34.800] - Rémi Bastien

We we can work together yes. Usually one project starts when as the source is the production source is defined and then according to the production capacity we defined how many participants we can get and then if a municipality for example need some help to explain to the resident how it would work, why they should join the project, we can help them with a possible public meeting, communication support. all that they need to get the people on board.

[00:07:14.460] - Jon Slowe

  1. And then the platform or the place where the exported electricity or the matching of the export and the demand. That's Enogrid's job to help connect basically the producers and the users. Have I understood that right?

[00:07:33.910] - Rémi Bastien

Actually our platform is here as let's say managing tools for the collective self-consumption. That means  that we will get, once the project is running,  we are getting all the data from the DSO, from Enedis, and we make it available to the participants of the operation. So that's mean we know how much is produce, we know how much is consumed, and we allow people to assist with information and to use it as for example a technical point of view. Do I produce enough, when can you consume local energy, and also for administrative point of view, for example when you want to send some bills between producer and consumer or some as some as a means to achieve that's good.

[00:08:28.360] - Jon Slowe

So do you see yourself then as the enabler and the facilitator of of this?

[00:08:34.170] - Rémi Bastien

Yes more facilitator. Today in France we have we have a good playground let's say for collective self-consumption that says for example for the moment is a little bit complicated. First because it's new and also because you have to group a lot of people together and need it so you have some or some rural seats. Everything is a grid concept. It is a concept it is a bit complex.

[00:09:09.960]

So it's better to have somebody as somebody to which experts to explain and to say to make everybody comfortable with these concepts and to be there to be sure that everybody, everything would be working well. So that's what I'm trying to do try to make people more confident to develop the projects.

[00:09:30.800] - Jon Slowe

Okay. And can you give me a feel whether you're at the very beginning or do you have a few projects or many tens of projects at this stage?

[00:09:40.320] - Rémi Bastien

So far we we follow six projects in operation. We watched our first projects one year ago which was in west of France and we are we are helping so far let's say almost 20 projects to to start in the next six months.

[00:10:05.830] - Jon Slowe

Okay. An exciting and busy time and my last question for now or more before we move on to Rita and Victoria, your business model so how does Enogrid earn? How do you earn your money? Are you charging presumably some kind of fee for the facilitation that you provide?

[00:10:27.500] - Rémi Bastien

Yes we will have it. We would have first fees for the implementation of the project according what we need to do. How complex is a project. And then for the platform it's the SaaS, so software as a service, and so people we have annual annual fees platform according to the size of the budget.

[00:10:51.610] - Jon Slowe

Okay. Thanks Rita. I'd like to come to you next. You're looking at these markets across Europe and I'd like a sense of that. I'd like to talk to you about a sense of where these markets are at or how quickly this is happening. And let's start at the very top level with the European Commission and the Clean Energy Package I mentioned. What exactly is the European Commission encouraging here?

[00:11:25.490] - Rita Desmyter

The European Commission with the Clearn Energy package is promoting the principle of localt energy communities and this with two different terms: renewable energy committees and citizen energy communities. And in this sense collective self-consumption is one way of creative creating an energy community.

[00:11:47.450] - Jon Slowe

Okay. So it's defining the sense of an energy community and collective self-consumption. Now many of our listeners will know that a lot of European legislation has to be then translated into national law by each country. So can you give us a feel for whether most countries  are at the beginning of implementing this or have most countries implemented this already. So where are we at on this journey from this initial concept of legislation through to everything being ready on the ground?

[00:12:22.500] - Rita Desmyter

We are really in the beginning of the journey. So the transportation of the directive has to be translated by 2021.

[00:12:32.160]

At the moment in Europe they are eight countries that translated, that has collective self-consumption allowance. So we have France we have Belgium with one region, Germany, Slovenia, Spain, Austria and Greece and Switzerland which is not a Member State.

[00:12:52.580] - Jon Slowe

Okay so it's starting it's getting momentum. There's a few countries you've noted there but it's quite, the regulations can be quite complex. And is it a case that once a country has translated this the market is then ready to go? Everything's in place. Let's get started. Or from your experience, actually, even once it's implemented, can there still be a lot of detailed challenges to get right before this market can really start taking off.

[00:13:27.150] - Rita Desmyter

Absolutely. Because we have at the beginning off of translating those principles into reality. For example in France we we see that's become very very complex in terms of fragmentation. There's also pressure on around upfront costs of starting such a project, always question about around the local networks charge, the taxes. So it is not simple and we will need a few yes to learn from countries to countries.

[00:14:03.530] - Jon Slowe

Okay. So I think at all our listeners, I imagine, will think that the concept of generating your own electricity and then selling it to someone in your community or sharing that with the community, it's a great concept. We can see the direction the market's moving in but it's going to take a bit of time.

[00:14:20.490]

Now, Victoria, I'd like to come to you as the incumbent distribution system operator in France. First of all talking about photovoltaics in general, how do you see the growth the fault of attacks from a network perspective is it causing Enedis problems on the distribution network or is penetration still manageable or you're not seeing problems?

[00:14:48.910] - Victoria Tan

Yeah. Thank you for your question. I'd like to make a general statement regarding renewable energy as a whole.

[00:14:56.550]

And then detail more photovoltaic impact. So regarding renewable energy as a whole we can see that in France there is a trend this year that say that will enough to cover approximately 20 percent of the French consumption. So. And photovoltaic is a large part of this renewable energy. So this rate of renewable energy induce some investment both for DSO and TSO regarding hosting capacities. I can give you some figure for instance in 2019. Two hundred fifty a million has been invested in rebuilding distribution grid to facilitate the collection of renewable energy.

[00:15:55.660]

And we think that we would invest up to five hundred fifty million euros in two thousand thirty five. So it means huge investment but we anticipate this original number in France. So the region the local authorities will set some objectives in terms of renewable energy in the region and then we will anticipate with the TSO the hosting capacity and the investment that we need to implement so that we can prepare investment in renewable energy will be ready. And we need to connect them.

[00:16:43.530] - Jon Slowe

So Victoria sounds like well 20 percent is is a big number as you said for renewables in terms of overall demand. That number will grow. These are quite big numbers you're talking about investing so as in every country when renewables are connected to the network in some cases that needs reinforcement to increase the capacity. And how do you how do you then see the concept of collective self consumption from photovoltaics. Are you neutral about this. Do you see it as helping Enedis or maybe causing you other problems? How does Enedis see this topic?

[00:17:33.890]

According to how public our mission we are a regulated company so we have to facilitate and enable energy transition in general and collective self-consumption projects are part of this transition for sure. So we have the role of an enabler for this project related to the grid impact and the data management. First of all I can say the role of in this project. And then I can say how productive we have been to develop this project as well with the legislation.

[00:18:11.530] - Jon Slowe

That would be great.

[00:18:13.390] - Victoria Tan

  1. So Enedis will connect to every consumer and produce out to the grid. So every consumer and we saw that all part of this collective self-consumption project can be supplied even in the absence of local production. So they are guaranteed of the power supply quality. Moreover we will get equipped participants with smart meters. And we have developed an industrial solution that takes advantage of the data management infrastructure that is associated with the deployment of smart meters. So we will collect the electricity generation injected into the grid by [...] and the electricity consumption of each participant.

[00:19:05.690] - Jon Slowe

So Victoria can I just ask about that? You're collecting that on a 30 minute basis. So if you've got the smart meter installed then that's 30 minute data you're collecting on generation and on consumption.

[00:19:22.580] - Victoria Tan

Yes. That's what I was about to say.

[00:19:24.310] - Jon Slowe

Okay.

[00:19:24.810] - Victoria Tan

Yeah. About 30 minutes. Yeah. Yeah. And so then with the data we will calculate the share of production to be allocated to each participant according to the rule established by the project manager of collective self-consumption and we'll send the data in order to help the stakeholder to build the electricity turnkey for the network, to build the residual electricity supply, and to implement a balancing mechanism.

[00:20:00.550] - Jon Slowe

Okay.

[00:20:01.390] - Victoria Tan

So that's our position.

[00:20:04.850] - Jon Slowe

And at this point I just bring Rémi in so Rémi, Victoria described that data that they're collecting and they make available, presumably that data then plugs in some way and/or connects to your platform. Is that correct?

[00:20:21.740] - Rémi Bastien

When Victoria says she would send the data to the project manager of the collective self-consumption, we are, this is our clients, this project manager will the Enogrid platform,and the data that Enerdis are sending is it's a real data in our platform with our platform the data is almost automatically analysed with beautiful graphics, with beautiful analyses, and it can be used directly by the stakeholder

[00:21:00.660] - Jon Slowe

So yeah if anyone wants to see the beautiful analysis and graphics and can they go to your website Enogrid and see some examples of that, I assume Rémi?

[00:21:12.660] - Rémi Bastien

I think we didn't put example directly on our website but if you contact me I can make you some demo.

[00:21:20.370] - Jon Slowe

Yeah. Okay. The overall point I guess is that you're visualising and you're making it very engaging for customers and for the collective self consumption organisation you're making it very engaging and easy for them to see where their electricity is going.

[00:21:36.310] - Rémi Bastien

Yes because from our point of view it was important to share information to with all the participants because we are talking about collective self-consumption

[00:21:47.100]

So when we use the term collective that's meaning we we have to create this is this community and to create the community and the community where we can know the trust between each other I think the sharing information is as well important as the sharing of electricity.

[00:22:04.430] - Jon Slowe

Yeah okay. Thanks Rémi. Victoria, let's come back to you, so I interrupted you there. So we'd got to the point where you're collecting that staff hourly data for generation and demand, you're making that available to people like Rémi at Enogrid, please carry on.

[00:22:22.090] - Victoria Tan

Yeah. OK. And so we have very proactive regarding this industry and solution in 2017 when the first legal framework in France was set because this new concept had a particularity to involve the final consumer but also several stakeholders of the energy market such as Project Manager, supplier, producer, balancing entities. So in this context we suggested let's say a transitory package following the quick addition of the first project. So we proposed three documents: a contract between the legal entity, so the project manager, Enedis, and then a document explaining the different steps for a project manager to be implemented for his project. And the third document explaining the different calculations made by it is based on the datathat are from this smart meters. And so this document has been used from the first operation until nnow before the legal consultation with the different stakeholder. And so now recently it's in the mid 2019 Enedis opened a consultation so that different stakeholders could propose improvements to the document. After one year and a half of the first project in France. So we got that feedback. And we will try to implement some of the feedback.

[00:24:08.730]

For instance once the project was ready to begin a period of two months was required for the supplier and balancing. And you could prepare anticipate this project [...]

[00:24:31.870] - Rémi Bastien

I'm very happy about this.

[00:24:34.730] - Jon Slowe

Sure you are Rémi.

[00:24:37.670]

I think what you described there, Victoria, I find fascinating because you hinted at something we won't have time to really delve into today which is the balancing responsible parties. One of the cornerstones of the electricity market structures in Europe. And when I look back at Community Energy, Community Energy I would say was very much about a village building a wind turbine together and sharing some of the proceeds of profit for that amongst the village amongst people locally. What we're talking about now is really about customers, consumers, energy communities becoming a part of the electricity system and that is complex and it is difficult.

[00:25:26.320]

And to hear a a DSO such as Enedis facilitating that I think that's a really critical role because there's a lot of complexity.

[00:25:35.340]

Rémi, that that complexity, I guess that's in a way an opportunity for you to help to educate municipalities, local governments, organisations.

[00:25:50.950]

Can you just give me a feel as to what that's lik. Do some people come to you with an idea and you think wow this is going to be really hard work to educate them because they really don't understand this or do you find people are coming with some good concepts to you?

[00:26:12.270] - Rémi Bastien

I'm surprised because I'm walking on this field for one and half years and still I'm discovering new concepts not with every client but almost always during it.

[00:26:28.990]

I think at the beginning it was it was complicated but now the concept to get people are understanding and I think more and more the concept because a some pilot project some examples that we can show people are getting more and more experience about this one. But yes and sometimes when you have a question, but if my set up and then doesn't produce me I we're not having enough. Do do we still need to if I want to share electricity with my neighbor or do I need to pull a cable from mine to his house, basic questions like this.

[00:27:09.820]

So yeah we have to explain that idea to spend a lot of time on this but I think it's are getting better but it's also why for the moments the projects are developed not by individuals on people on the House on down but rather from an entity which are able to understand this concept and to explain and to build first the community. I like you. Maybe yeah I can.

[00:27:44.530] - Jon Slowe

I think on one hand I can imagine the time it takes to explain this to people but from what you said in just a year and a half you've seen already quite a lot of learning people being more educated. That's really encouraging because the market then if you know when you look for it do you see actually that in another year and a half time you'll be a lot further forward that the market would have matured a lot. Or do you think it will actually take a lot longer than that to mature?

[00:28:15.730] - Rémi Bastien

No I think it will be much broader. I think because collective self-consumption is very let's say complementary to the areas of consumption. If say if you live in a in a collective building and if you want to to have access to [...] the local energy electricity you cannot do individual self-consumption so your only choice would be then collective self-consumption by talking with your landlord or your municipality. So I think that's interesting because and a possibility to for people to access clean energy local clean energy that they didn't have before. You know I think that's interesting from this point of view and especially because now with the regulation on building construction we will have more and more positive energy building. So when we have energy building I think collective self-consumption will become a standard on these buildings.

[00:29:34.220] - Jon Slowe

Okay. Time is racing by so I see it's already time for the, to get the crystal ball out, the Talking New Energy crystal ball, and take a gaze into the future. So let's set it to the crystal ball this time to 2025 and I'd like to ask each of you how widespread do you think these collective self-consumption models will be in France in five years' time.

[00:30:01.960]

So Rita, let's start with you. And from where we are today which is from what may be described you know around a few tens of projects that sort of level but quite a lot of interest. Where would you say we'll be in in five years' time?

[00:30:22.550]

Right. That's that's right. There is a lot of factors to consider but I would say between 250 to 450. Considering that there is the regulatory barriers but in the same time lots of new business model emerging so it will balance itself out. And what we learn from the lesson.

[00:30:41.520] - Jon Slowe

Okay so from from 10 to 200 is in the next years. Victoria, how about from your perspective. ff you're in a way right at the middle of this you're seeing all the projects develop you're getting all the applications. How fast do you think this can move in the next year?

[00:31:03.430] - Victoria Tan

Well we don't have a crystal ball that is that at the moment. We have 19 operational projects running at the moment and more than 100 projects. So from what we know are there development at a different stage at the moment and other say that a lot of social landlord are very involved in this project and some social landlord will will involve more than 10000 consumers in that project. But I think maybe they will take the lead for the next year especially because the load with price to facilitate. The fact that the social landlord by itself could be a legal entity, a project manager for the project, because before they had it another entity. And I think this should you know we'll have them in that project. Yes.

[00:32:09.460] - Jon Slowe

So we'll see we'll see then. Yeah we'll see many more projects as some of them could actually well some may be small or some I think it's a really interesting point. Some of them may be very large. And yet last but not least...

[00:32:25.900]

Yeah. Okay. So they're small today but you see then while the the average size could go up considerably. Rémi, last but not least having started a business in this area. I imagine you're very optimistic about the future but do you want to just describe your your vision for 2025 or where you think the market will be in 2025.

[00:32:49.980] - Rémi Bastien

In 2025 we're seeing that in the general point of view self-consumption would have increased a lot for two for two reasons.

[00:33:01.260]

First the decrease of the TV costs so it would be actually built to produce your own electricity as increase of the electricity electricity price or in general self-consumption we will do it will be developed more and more and from a collective self-consumption. We can see two drivers for the representation of the energy issue from small and medium municipality or with the operation. And then as Victoria says as a social landlord which will be a very big driver because as you have all the keys to make a lot of projects we said with a building, with the new rules of construction and with the social interest to do so.

[00:33:58.710]

And the last point will be for the markets to let's say to generate or not will be to have a tax system which is dedicated to collective self-consumption as it is required on the European energy package.

[00:34:20.730]

And in France we don't have this. This is it is a tax system doesn't encourage creative consumption but still the concept interest as when we will have a dedicated taxes and that is economic interests will be there. We will have a lot really a lot of pressure.

[00:34:47.550] - Jon Slowe

Okay. So plenty to keep you busy over the next year and a nice opportunity for Enogrid. I think my my takeaway is that there's no doubt that there is a strong demand for this sort of concept, that there's a lot of interest, but a lot of the devil will be in the detail of the regulation, the taxes as you explained Rémi, and I think it's fantastic Victoria to hear how Enedis in facilitating this and the role you want to play in supporting these models. So my expectation is in France and other countries Rita mentioned Belgium and Spain etc. that we see a lot of growth in the next years. Bit hard to predict because it will be regulation dependent and details around taxes and so on, but there is a big appetite there for these types of models.

[00:35:41.090]

So. With that I want to say a big thank you Victoria for joining from Enedis, thank you very much. From Rémi, from sharing your experiences at Enogrid.

[00:35:59.140]

And not least to Rita for sharing your research and views on this market. And of course thank you to everyone listening. We hope you've enjoyed this podcast. If you've got PV on your roof or you know other people that have and you've heard some chat about a local energy community or collective self-consumption in your area maybe it will spur you to get involved. I'm going to go back to my home in Glasgow and see what I can find locally. So thank you for listening and see you next week. Goodbye.

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