A game of VPPs

The game of ‘Monopoly’ has an interesting history.

Its precursor, ‘The Landlord’s Game’, was invented, patented and self-published by one Lizzie Magie in 1903. Magie was a vocal opponent of profiteeering landlords, and indeed of the likes of Standard Oil and American Tobacco.

But the version of Magie’s game we play today, licensed by Parker Bros in 1935 for the princely sum of $500, omits her simulation of the fin de siècle legislation which curbed the powers of the tycoons… and thus inverts her intended meaning. Instead of teaching mutual enrichment through cooperation, ‘Monopoly’ encourages us to behave like nineteenth century robber barons.

How well does the game model the conditions of the Victorian era? The boards sold by Parkers famously include utilities as well as property, but fail to give mechanized ‘new money’ its due weighting.

Most of the great monopolies of the time were technologically mediated. The details of that mediation are now mostly forgotten. Few of us are conscious of the fierce rivalries that saw differing mains voltages rolled out across different US cities, or brought into existence a slew of track widths (“gauges”) as developers fought to dominate Europe’s emerging railway networks.

Instead, we are left with the mutually incompatible impressions that interoperability is a good thing and that history is written by the victors. The history of technology is amenable to either reading.

 

Natural and inevitable?

Concerns about monopolies have always re-emerged at times of technological change, of course, and they’ve tended to die down in the years and decades that follow. It’s tempting to describe this process as ‘natural’ and ‘inevitable’.

But these are the optimistic expectations of the Internet era, which has popularized the idea of open standards in computing to such an extent that concerns over proprietary software architectures and data formats may now seem quaint.

It’s worth reminding ourselves that, barely 20 years ago, a US court used nineteenth century antitrust legislation – the Sherman Act of 1890 – to rule that Microsoft’s dominance of the x86-based computer market constituted a monopoly and to demand a breakup of the company.

The first generation of PC magnates were enabled by combination of proprietary software with semi-proprietary hardware. The same conditions are now re-emerging in the renewable energy field.

Fans of solar photovoltaics – solar PV for short – will be aware that the DC installations on their roofs can be connected to the local power network via a so-called grid-tie inverter, enabling them to act as ‘microgenerators’ and sell energy to the utility.

While such contracts can be managed individually, it’s better all round for householders to group together and sell energy collectively. These virtual power plants (VPPs) are increasingly common, and are generally expected to make a large contribution to the operation of a decentralized grid.

 

Monopolist tech

The monopolist tendencies built into the technology have been less obvious.

An effective VPP requires co-ordination between households, enabling them to release energy from their local storage batteries to the grid at advantageous times, a consideration which inevitably reduces the appeal of UK-style ‘energy switching’ arrangements.

Well, if renewables drive householders into the arms of their local utilities, what of it?

The kicker is the VPP’s inbuilt tendency towards platform specificity. Most VPPs have been built using bog-standard solar PV installations from a single supplier. A householder who wishes to sell energy may find that their options for doing so are limited to a single buyer… with predictable consequences.

While one Australian energy company has demonstrated its ability to incorporate solar PV installations from two different suppliers into a single VPP, we shouldn’t take such interoperability for granted. Consumer awareness – and appropriate legislation – are needed.