The current electricity market situation is a problem. One that every day appears with a new record number with electricity prices in Spain kW / hour never seen before. Tax cuts, attempts to reduce the profits of electricity companies or a public electricity company remain at the center of the debate as mechanisms to reduce the pressure posed by the price of electricity in Spain. A problem that, with an infinity of readings and analyzes, is far from solved. On the horizon, the 203rd Agenda for the consumption of 100% renewable energy in Spain. A whole mix that will still give something to talk about in the next 9 years and that is already importing peer to peer models like Lumio’s.
Lumio, born from the hand of Alexis Las Hera, came up with an idea similar to that of other projects in different sectors. The democratization of a product or service in the hands of major players in the market. In fact, Lumio refers to itself as the Airbnb of renewable electric power.
And they are not very misguided. The startup dedicated to the electricity sector is part of the peer to peer energy business, defended by many as heirs of the most purist models of democratization. Uber, in its origins, or Airbnb itself would be some of those platforms; the future, and a long list of regulations, has changed its initial conception. In the case of electric power, they want to avoid large power generators and traders.
In summary, the defense of this business model proposes the self-production of renewable electric energy –Solar in most cases– to later share it with third parties. The most idealistic models, defended by platforms such as Greenpeace, point to a free transfer. The reality is that selling to third parties, at lower prices than the regulated market, is positioning itself as the best option.
‘Peer to Peer’, but before solar panels
Lumio was born in Denmark, by the hand of Las Heras. Not surprising, in any case. The development of the Danish country in terms of renewable energy is far above any European competitor. It is indeed, leader in offshore wind power with some of the most developed facilities on the continent. They also work, for a few years, with peer to peer businesses.
A model that, despite the current trend due to the energy crisis, has already been suspected for a little over 10 years. The growth of the IoT, as well as blockchain technologies capable of creating smart contracts and more sophisticated electrical consumption traces, has cemented the impulse of varieties of electrical energy consumption of alternative origins. Also, of course, a certain democratization of private solar panels as a result of a reduction in prices and technological improvements.
Lumio was born, therefore, fueled by the development of these Danish business models. Also because there was nothing similar in Spain at the time of its foundation, according to its founder to Kirkwood student media:
“My parents are very innovative people, so I helped them with the issue of saving energy with their own solar panels. Also, my parents have a store near where they live. If what I saw in Denmark was possible, too It could be in Spain that the surplus energy they had at home could be taken to the store. And we saw that nothing existed. And that’s how Lumio was born. ”
Alexis Las Heras
There is no peer to peer ecosystem without a foundation
Lumio was born as the heir to the models imported from Denmark. A peer to peer system in which customers could pass on surplus energy to whoever needed it. Problem? The penetration of self-consumption solar panels in Spain it is not enough. With figures from 2020 and according to the Sustainability Observatory report, in Spain there were only about 10,000 solar roofs, compared to 1.5 million in Germany. Lumio started, and continues to do so, by installing solar panels. Then came the peer to peer business.
Between 4,000 and 7,000 euros in an estimated price for a solar panel installation, this service would only be available for single-family homes
Right now they are in a pilot test, but They want February to be the launch month. At the moment they work under the system of giving away electricity between two chosen users. Later they will take advantage of a model similar to the BlaBlaCar with their travels. The company estimates a recommended price for the journey, in this case for kW / hour, but it is the seller who decides. The buyer will only have to accept the proposal. Lumio would work, in this case, like any marketer in which if the consumption of solar energy is not enough, it would use the energy network common electric. With that, users would have to pay the tolls and costs of a normal invoice. Lumio would only charge for energy obtained from the electrical grid.
They know, however, that at the moment this system is limited to a very specific group of users. Elitist in some cases. Between 4,000 and 7,000 euros in an estimated price, this service would only be available for single-family homes. With a population residing mainly in large cities and in multi-dwelling flats, the system is limited to a small group of users.
In other words, Lumio needs at least one solar energy producer for every two consumers. With 300 current users and a goal of 6,000 for next year, peer to peer systems still have a long way to go to be efficient and away from high purchasing power profiles.
The other Lumios of the world’s electric power
Lumio, as we said, is by no means the first experience of a direct energy sales system in the world. It is heir to a long list of experiences that, despite coming from a debate with many years, are still just that: tests and drivers.
Many of them, in fact, are in Latin America. Medellín tested a system to share electricity under a blockchain system with 23 residents of a residential area using solar energy. The inhabitants of the region became, therefore, what is called prosumers: producers, consumers and sellers and their own energy. Beyond the pilot and the objective of promoting renewable electricity, the objective of this system was to demonstrate the viability of a decentralized system and the promotion of zonal economies. Useful for regions disconnected from large cities and allowing a reduction in prices by dispensing with transport. As well as alleviating the tension on the central network in times of high demand.
In the case of Medellín, as in so many others, it is the regulatory pressure as well as the high infrastructure costs that prevents much greater development.
Together with Medellín, the University of Bristol is also trying to create its own peer to peer renewable energy system. HoSEM, a pilot test that seeks to redefine the rules of a highly stressed electrical energy market. And also very little valued. Researchers George Papanikolaou and Vasilis Kostakis published an essay in which they precisely positioned the power of the internet as a solution to a situation in which the population has practically no control over a primary good.
“We feel robbed and erased from the decisions of the energy sector”
Greenpeace goes a bit further with its assessment of the energy system. “We feel robbed and erased from the decisions of the energy sector,” they point out in a report on the future of peer to peer models. As an example of good practice, the organization lists Vandebron, a Dutch startup founded in 2013, as a milestone in the peer-to-peer electric power sector.
It is, in short, a system similar to Lumio with almost 80,000 connected households to your network. Same as the Brooklyn Microgrid project. In this case, with no company involved, it was the residents of various areas of the popular New York neighborhood who came together to generate electricity and sustainable consumption in which everyone generates energy, consumes what they need and share what is left over. The but, however, is always the same: to be able to generate enough energy to be able to share it and to be able to make the necessary investment to enter the game.