A Permanent Local Electricity Market (PLEC)

Kevin Cox
4 min readDec 1, 2023

The article A Permanent Housing Market illustrates the dramatic cost reduction of moving house when the cost of money is removed. Traditional economics and accounting assume we monetise assets to move ownership from builder to owner. For all infrastructure, this is unnecessary, and the cost savings are the cost of interest and creating new money.

It is also common practice to create extra money and charge rent on the money when paying for the infrastructure or permanent assets — such as toll roads. This practice usually exceeds the cost of building the infrastructure.

As well as creating new money, charging to rent money to build infrastructure is unnecessary. Instead, investors can supply money to build it and get paid for its use plus a return on investment while transferring the asset incrementally with each payment. Eliminating these costs significantly boosts the economic productivity of a society and frees up existing capital to further enhance productivity and maintain infrastructure. For example, investors who save money through superannuation can direct their super to infrastructure instead of financial investments.

A Permanent Local Electricity Market

Imagine a group of houses behind the low-voltage transformer. Many homes have solar panels, and some have electronic metering and batteries. The owners of some of the houses work together to create a “virtual permanent market” where they generate, distribute, measure, consume and store electricity using each other’s resources. Owners can opt in and out of the Local Market and own the equipment on their land. The market is virtual, and everyone pays the same for electricity, no matter when they use it.

Homeowners, occupiers and investors all receive the same 5% per annum return, but they must sell a separate 5% to occupiers, and the transactions must happen at different times. Money never goes out of the Market, but people buy and sell shares, so the assets continually change ownership. Money comes in from people buying shares. The asset values are changed when the value of money changes.

Occupiers buy electricity and pay the external market price to the Market. The Market invests in further assets at a given cost. The asset is converted into shares, and the shares are distributed equally across all occupiers.

The Market integrates with retailers who integrate into the national energy market.

Distributors work with the Market to integrate the hardware into the overall grid.

Homeowners and other investors can invest directly in the Market by purchasing shares. However, consumers become the leading investors in the market as most of their payments for electricity are converted into new investments to supplement the existing investments.

Every occupier of a dwelling pays the market price for all electricity. All the money collected is invested in the market to buy assets and create more power to sell. The new shares are divided 50% to investors who sell shares of value 50% back to the market. The market gives 50% of the shares to the occupiers who pay the money. There is a charge of 10% to both the investors and occupiers who pay for it with shares. The 20% of shares are sold to other investors or used to pay for services. The 20% is used to pay for market operations and potentially make a profit that the cooperative can invest in services or new assets.

The Market can change these percentages.

Occupiers who want to pay less for electricity can sell their shares to investors. Investors who are not occupiers receive a 9% annuity for 20 years, and they can change their annuity at any time and as often as they like for no cost using the formula below, where shares are all valued at $1 each.

Shares * (1 + 4.5% * n) / n

The market annuity lasts about twice as long as an allocated pension from the average Australian Superannuation Fund.

The cooperative model offers additional savings, particularly in the transfer of asset ownership. The capital moves incrementally with reciprocal capital rather than in one large amount. The costs of selling, buying, and transferring an asset can be high but are eliminated with a Permanent Local Electricity Market.

There are several other advantages of all working together. But with too many people in some Markets, reaching an agreement on contentious issues becomes more difficult.

However, the approach works with any size group from two to 100,000. If a group is too small, it is easy to combine with another group; if a group is too large, it is easy to split.

Comparison Market

The Market is compared to the existing system where the hardware is owned by different entities — mostly homeowners or service providers like distributors, and each entity works independently.

The Modelling Results

The article Rewiring Australia uses a spreadsheet model. This can be done using NetLogo, an agent-based modelling tool. This will give similar results plus allow local communities and individuals to put in local conditions and see the benefits they will enjoy.



Kevin Cox

Kevin works on empowering individuals within local communities to rid the economy of unearned income.