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Switzerland Completes Field Test of Blockchain-Based Local Electricity Market

February 7, 2020
James Hall


Switzerland Completes Field Test of Blockchain-Based Local Electricity Market

A flagship project called Quartierstrom for selling solar power in a local blockchain-based electricity market supported by the Swiss Federal Office of Energy (SFOE) recently concluded a one year trial. Thirty-seven households in Walenstadt traded locally produced solar power generated from their neighborhood. The local power company, Water and Electricity Works Walenstadt (WEW), “not only provided access to its distribution grid but also purchased surplus solar power and supplied the community with ‘normal’ power when the supply of solar power was insufficient.”

The aim of this project was to not only test the technical aspects of a blockchain-based trading market but also to study user behavior. Ultimately, they found that “37 households covered 33% of their electricity demand with solar power produced in the neighborhood – twice as much as beforehand.” They also found that participants were more likely to use appliances at solar peaks. 

Additionally, they found a little more than half of the households preferred an automatic pricing system versus individual pricing. The researchers found that automatic algorithmic trading was much more effective – “Based on our experiences, we don’t consider individual pricing to be decisive for a local electricity market in the future.”

While many had said they were more willing to pay for locally produced solar power, they found that on average, “the participants were willing to pay just under 19 centimes per kilowatt hour – less than the cost of mains power, which stands at 20.75 centimes. Fewer than 10% of offers were above this rate.”

They found that while the software proved “highly reliable,” there was a struggle to maintain functional hardware. Ultimately, they found that a certified and stable smart meter with an integrated application processor capable of running different software tools was needed. 

The Quartierstrom blockchain, unlike bitcoin or ethereum, is private. While this has the benefit of low power requirements to process trades, it also remains a centralized system and database; which blockchain is intended to remove. While people should be free to choose their own digital ecosystem of choice, it would be interesting to see a decentralized iteration of this. 

View the press release at–field-test-of-switzerlands-first-local-electricity-market-successfully-completed-301000337.html