Researchers Develop Local Electricity Trading System to Cut Costs

As energy prices continue to rise, researchers at Washington State University (WSU) have developed and tested a local electricity trading system that could significantly reduce costs for communities. In collaboration with Avista Utilities and its Energy Innovation Lab, WSU’s innovative approach focuses on a trading system for solar and battery storage shared within neighborhoods, demonstrating potential savings of approximately 12% over a five-day simulation.

The findings of this research were published in the IEEE Transactions on Industry Applications. “The changing landscape of the electricity industry necessitates practical solutions for coordinated operation at the distribution level,” said John Theisen, the lead author and a PhD candidate in the School of Electrical Engineering and Computer Science at WSU. Theisen emphasized that by optimizing the coordination of electricity distribution, efficiency can be increased, benefiting utility companies and consumers alike.

The energy grid has evolved from a centralized system to one that increasingly relies on distributed sources, such as rooftop solar panels and small community wind projects. With growing electricity demand and lengthy timelines for constructing new transmission lines, local resource coordination is essential for enhancing grid efficiency and reducing costs.

WSU’s research introduces a mechanism for trading and sharing energy from local assets—like solar panels and batteries—within the distribution network. Traditionally, electricity trading occurs at a large scale, where utilities purchase power when prices are low and sell surplus energy. This study aims to replicate that trading dynamic at the local level, allowing assets to be utilized more effectively.

For instance, a hospital or university may have an idle battery on-site, originally intended for emergency backup. This research explores how such assets can be leveraged to optimize local electricity trading, mirroring established practices at the transmission level. “When you can utilize an underutilized asset, you can gain a lot more value from it,” Theisen noted.

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

The researchers successfully implemented a responsive system that allowed asset owners to react to fluctuations in energy pricing throughout the day. “It was pretty seamless,” Theisen remarked, highlighting the effectiveness of the system.

During the five-day testing period, simulations indicated potential savings of about $1,000 for the selected assets. Theisen pointed out that if similar assets were integrated throughout the distribution system at comparable participation levels, annual savings could reach hundreds of thousands of dollars.

This study received support from Avista Utilities. Current energy prices reflect ongoing infrastructure upgrades and the growing demand for clean energy solutions. Projects like this aim to alleviate future costs and enhance efficiency. By adopting smarter systems, utilities can reinvest in grid improvements and resilience.

“The rising cost of electricity is a concern for many,” Theisen stated. “The only way to address this issue is through increased energy efficiency and by identifying smarter ways to coordinate electricity distribution.”