AGL has developed an online platform which allows users to trade solar energy, with the aim of giving its customers more control over their energy use and reduce the cost of their power bills.

Currently 220 AGL customers in Victoria are participating in the AGL Solar Exchange trial, which started in August, by trading solar tokens that represent solar energy through an online trading account.

AGL’s marketplace means household generating solar power can participate in trading energy beyond receiving compensation for returning excess solar to the grid known as a feed-in tariff (FiT).

“In addition to exporting surplus energy to the grid at their feed-in tariff, households that use less solar energy than they produce can sell tokens to family, friends and members of the community who don’t have solar panels,” said Nick Ruddock, AGL general manager energy management.

It also means those who don’t have solar panels can buy the Solar Tokens, possibly for less than they would from the grid.

“In this trial, currently the largest of its kind in Australia, buyers and sellers choose personalised settings for trading tokens on the AGL Solar Exchange platform, which matches buyers with sellers to complete compatible trades,” Ruddock explained.

“Under the right conditions, a buyer could buy tokens at a lower price than buying energy from the grid, while a household with solar could sell excess solar tokens at a higher price than the solar FiT, and these trades would ultimately be reflected in the customer’s electricity bill.”

Ruddock said creating the online marketplace was part of AGL’s commitment to making energy more affordable, giving customers more control and flexibility, and developing energy solutions for the smart home of the future including maximising the value of rooftop solar and battery systems.

Start-ups such as Greensync and Power Ledger have also developed their own energy trading platforms.

Rise of the Prosumer   

For AGL the move is an example of the strategies incumbent energy providers are exploring to capitalise on a new market force known as ‘prosumers’ which is challenging existing business models.

“For the customer, historically there’s only one way to procure energy and that was through the grid. Now we have innovation at the edge of the grid, a phenomena called ‘prosumers’ — consumers who at the same time are producers,” Zarko Sumic, Distinguished Analyst at Gartner told Which-50 during a recent interview.

“They have the ability to self generate, store energy or sell energy back to the utility company.”

This trend could potentially force incumbents into a “death spiral”, Sumic argues. As prosumers increase the amount of energy that they self generate, utility companies are selling less energy through the grid, while the fixed cost of maintaining the grid remain.

In turn kilowatt hours are become expensive to the customer, which encourages other people to look for alternative solutions.

To avoid this position incumbents must explore new business models, Sumic said.

“The existing business model which has been historically widely accepted as the best way of provisioning energy to the customer is being challenged because it is not sustainable,” Sumic said.

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