Pylon Network’s journey in collective self-consumption — the past and the future

4 min readOct 29, 2019

A short story of collective self-consumption in Spain and the EU

Pylon Network was born out of the necessity to accelerate the energy transition and the deployment of Distributed Energy Resources (DER) to democratize the ownership, generation and management of our energy systems.

Since the idea was born our only mission has been the empowerment of cooperation in the energy sector; and the embodiment of this, was found in energy communities and energy cooperatives.

Energy cooperatives is not a new concept — at all! However, their governance and operation is becoming more and more relevant as the European Commission is pushing for a more active participation and engagement of consumers in the energy market (aka. customer-centered market design).

Spain is one of the first EU members that adopted the European directive by implementing one of the most ambitious regulations: The Royal Decree RD 244/2019, essentially allows for the formation of energy communities, by allowing consumers to “hook-up” to a common Renewable Energy (RE) installation at a local level.

Earlier this year, we organized a webinar, in which we discussed the opportunities and challenges of the regulation together with other energy experts. The full webinar is available here (in Spanish).

The first self-consumption pilot in Spain — powered by Pylon Network!

At the beginning of the month, we announced Pylon Network’s participation in the first scheme of collective self-consumption in Spain. The project was featured in the Valencian TV channel APunto and you can see it here (English subtitles available).

What does Pylon Network’s blockchain technology have to offer?

Pylon Network is a neutral energy data hub, which facilitates data exchange between energy communities (collective self-consumption schemes), its individual members (self-consumers) and their electricity retailers for billing and customer engagement purposes; in a simple, transparent and secure way.

The application of blockchain technology on this use case makes a lot of sense. The ability to trace and monitor complex energy flows among multiple actors, combined with the need for data privacy- and transparency-by-design, make the fit ideal.

We are working on a more extensive article to deep-dive in the benefits of this marriage, which we will release in the near future -so stay tuned!

We are on the correct path; we just need to plan our next steps

Pylon team has been continuously working closely with Spanish energy stakeholders, to follow the regulatory developments as the legislation evolves and at the same time, consult & educate the stakeholders / public on the changes that are necessary to squeeze every bit out of the new regulations for the benefits of consumers and the energy sector, as a whole.

Last week we released an opinion article, which was also featured in the two most prominent energy-specialized media outlets in Spain (Energías Renovables & El Periodico de la Energía).

One of the critical elements of the current regulation, which we see as a catalyst for the improvement of collective self-consumption, is the ability to dynamically adjust the consumption coefficient of the consumers that are associated to the installation (aka. “dynamic coefficients”).

In our desire to demonstrate the potential benefits to the energy sector and the regulators, we carried out simulations based on real hourly data and the results were even better as expected! Some indicatory outcomes from our first simulations are shown below.

Dynamic coefficients improve the share of the electricity consumed by the energy community, bringing multiple improvements, in terms of:

the profitability (payback time and ROI) of the installation
the energy efficiency of the individual consumers and the community
the operation and congestion of the grid
the empowerment and energy independence of local communities
the engagement of consumers in the energy market

At the end of the road: Peer-to-peer energy trading!

Besides the aforementioned benefits, the reason why we focus so much on the introduction of dynamic coefficients is because we see it as the precursor of the (very hyped) peer-to-peer (P2P) trading and the creation of local energy systems and markets.

However, there is still a considerable distance (and time) to be covered. At Pylon Network, we are continuously pushing, advocating and cooperating to/with energy stakeholders of the Spanish market to carry out the necessary changes and evolve the collective self-consumption in a shape that will truly benefit the market operation, the end consumers and the acceleration of the energy transition.

Together with our experienced, tireless advisors we are dedicated to making this attractive energy future, a reality!

Let’s work on that together!