By Ilias Tsagas
April 7, 2017
Amigo Solar, a Chilean microgrid provider, announced yesterday its collaboration with a digitized billing system that will help it to alter the utility landscape in the Latin American country. The case shows how solar and IT change the electricity market structures.
Amigo Solar will typically sign a contract with a customer to install microgrid infrastructure, including PV solar panels, smart meters, energy harvesting equipment and energy storage batteries, at the customer’s premises (this can be a household, business, a shopping mall, a cinema etc). A second contract will then be signed off where the customer allows Amigo Solar to operate the microgrid system.Amigo Solar will typically sign a contract with a customer to install microgrid infrastructure, including PV solar panels, smart meters, energy harvesting equipment and energy storage batteries, at the customer’s premises (this can be a household, business, a shopping mall, a cinema etc). A second contract will then be signed off where the customer allows Amigo Solar to operate the microgrid system.
How the system works
Following the signing of the contracts, Amigo Solar will install smart meters at both generation and consumption points at the customer’s premises. This allows Amigo Solar to aggregate the demand so that the company can buy electricity at the B2B regulated rate from the incumbent electricity supplier and resell the electricity to the customer at the regulated B2C rate over the microgrid.
Amigo Solar will also install rooftop PV and energy storage systems at the customer’s premises. The characteristics of the solar-plus-storage system change according to the customer’s electricity consumption profile, so that the installed system together with the digitized platform offered by Amigo Solar can optimize the margins of the customer’s investment.
Specifically, Amigo Solar’s chief business development officer Yuri Sylvester told pv magazine that in Northern Chile, where the solar radiation is very high, “some microgrids will be more profitable by oversizing a rooftop PV system to inject excess energy back in to the grid.” In other cases, Sylvester added, “due to difference in self-consumption vs injected energy prices, [customers] would benefit more from having all the energy generated by the rooftop PV system be consumed locally in the microgrid. Still, other microgrids, due to their high peak-demand and low consumption curves, may not benefit at all from a rooftop PV system and instead shaving the peak-demand with a storage system would create better margins to our investors.”
Amigo Solar’s digitized platform utilizes real-time data to calculate how much energy can be supplied from the rooftop PV systems and how much energy needs to be purchased from the incumbent electricity supplier. For large installation, Amigo Solar says that its microgrid system solution can be 99% independent from the incumbent electricity providers’ grid. For any gaps, Amigo Solar buys and resells regulated power generally at night time rates.
Overall, consumption meters are billing to the customers, energy generation meters are remunerated to the infrastructure investor (this can be the customer or a bank for instance) and the utility meters are billed by the incumbent electricity supplier to Amigo Solar.
Chile is an ideal market to launch the Amigo Solar micro-grid solution, said Sylvester, for a number of reasons. The country is a leader is the solar energy revolution, is a stable country, and is a gateway to the rest of South America.
Furthermore, “residential consumers in Chile are fed up with the historical lack of competitive prices in the B2C market,” argued Sylvester. “They see the low prices achieved in the latest public tender ($0.021 US cents/kWh) and cannot fathom why they have to pay an average of $0.14 US cents/kWh (monomic) in Santiago. And in other remote regions of the country, prices can even reach up to $0.21 US cents/kWh. Due to regulation, consumers are only able to buy electricity from a single distribution operator at the flat B2C rate.”
It is true though that Chile’s government has begun a two year-long plan to introduce electricity market legislation that will eventually liberalize the B2C market. For Amigo Solar, the operation of the microgrid solution in Chile can serve as an opportunity to acquire experience and become an established competitive retailer for when the B2C market becomes liberalized.
Currently, policy regulations do now allow Amigo Solar to violate the right-of-use that a distribution operator has over public easements in their areas of service concessions, and therefore the its microgrid solution needs to be strictly applied in buildings where only private infrastructure is used.
IT as game changer
Amigo Solar’s digitized microgrid system is an excellent example of how IT changes the electricity markets beyond the control of the policy-makers and the traditional utilities, which often rely on outdated systems.
In fact, Sylvester put this very clearly to pv magazine: “We are fortunate that all our competitors are large incumbents who are relying on outdated legacy IT systems.”
Amigo Solar decided to use this for its benefit, so “we took the strategic decision to create fully digitized back office processes. To support this and strengthen our competitive advantages, we implemented the MaxBill solution from LogNet Billing,” a U.K.-based firm. “With MaxBill, our back office today is more robust, flexible and scalable than any of our competitors,” claimed Sylvester.