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Energy
Peer-to-peer (P2P) energy trading creates an online marketplace where energy can be traded with low barriers. This makes local renewable energy more accessible.
Affordable And Clean Energy
Description
The goal of peer-to-peer (P2P) energy trading is to make renewable energy more accessible, while at the same time empowering consumers to make better use of their energy resources. It works by creating an online marketplace where prosumers who produce their own electricity through distributed energy resources (also called self-consumers) can trade electricity at an agreed-upon price with consumers.
P2P trading helps the grid by lowering reserve requirements, providing ancillary services, and reducing peak demand, while also saving citizens money on their electric bills. Trading power locally eliminates most transmission costs and allows prosumers to sell energy at a greater profit than if it were sold back to the grid, as is currently the standard. By limiting utility involvement in transactions, P2P models enable buyers to save costs and sellers to make a greater profit. They also empower customers to choose where their electricity is sourced from.
Problems to be solved
Growing energy consumption
High cost of energy
High transmission and infrastructure costs
Rising demand for renewables
Limited energy access
Benefits
Benefits show tangibly how implementation of a Solution can improve the city or place.
The main goal of P2P Energy Trading is to increase the use of local renewable energy by enabling prosumers to trade energy easily. Additionally, it can also decrease transmission losses and energy costs while stabilising the grid. Whereas some benefits are likely to be fulfilled with a basic implementation of the solution, the fulfillment of the full scope of potential benefits depends on the functions implemented in a specific project.
Main benefits
Reducing energy bills
Reducing use of fossils
Increasing share of renewables
Potential benefits
Enhances grid stability
Improving energy supply efficiency
Reducing GHG emissions
Promoting sustainable behavior
Increasing energy efficiency of appliances
Functions
Functions help you to understand what the products can do for you and which ones will help you achieve your goals.
Each solution has at least one mandatory function, which is needed to achieve the basic purpose of the solution, and several additional functions, which are features that can be added to provide additional benefits.
Mandatory functions
Enable energy to be traded at a local scale
P2P Energy Trading enables the trading of energy at a local scale
Potential functions
Informing prosumers
Services that allow the user to get information about how to become a prosumer and where their energy is consumed/generated
Supporting the installation of renewable energy sources in the district
Services that support prosumers in the implementation of PVs or other sources of renewable energy
Facilitate transactions using blockchain
Services that enable to use blockchain for transactions
Variants
A variant is generally something that is slightly different from other similar things. In the context of Solutions, variants are different options or possibly sub-fields/branches by which the Solution may be implemented, e.g. different technological options.
There are various options for implementing P2P energy trading – the differences are mainly based on the level of independence of the established grid.
Description
Participating peers independently and directly negotiate with each other to buy and sell electric energy. Blockchain-based smart contracts may be used to facilitate trading, but P2P markets are also possible without such contracts.
Microgrid setup that includes a subgroup of prosumers (e.g. houses with PV systems).
Description
Each member trades energy within the community or energy collective through a community manager. The community manager can also manage trades with external systems.
This can be applied to microgrids or to a group of neighbouring prosumers. Members with common green energy sharing goals must to be able to form a community.
Description
A combination of fully decentralised and community-based markets in that prosumers can individually engage in P2P trading with managed energy collectives in a more nested market design.
Which relevant standards, data models and software are relevant to or required for this Solution?
Required hardware:
Smart meters and grids
ICT network and EMS
Required software:
Platform for P2P electricity trading
Advanced power demand and supply forecasting analysis
Robust data analytics tool
Algorithms/blockchain for automated execution of P2P transactions and reduced transaction costs
City Context
What supporting factors and characteristics of a city is this Solution fit for? What factors would ease implementation?
Legal frameworks remain the primary obstacle in most countries around the world as direct P2P energy exchanges are commonly prohibited. This is not the case in the European Union, but some member states have more supportive regulatory regimes than others.
Microgrids are important enablers of P2P markets as they bring technologies and infrastructure in the critical areas of communication, monitoring and control.
Cost Structure
Required Infrastructure and Costs of a P2P Energy Trading System (BABLE, 2021)
Market Potential
How big is the potential market for this Solution? Are there EU goals supporting the implementation? How has the market developed over time and more recently?
The market for P2P Energy Trading is in its early stages of development and faces regulatory obstacles in most countries. Nevertheless, in the last decade, several R&D projects have been carried out, with numerous start-ups emerging. These include companies that allow P2P exchange of surplus energy- LO3 Energy, SonnenCommunity, Hive Power, OneUp, Power Ledger- and companies that allow prosumers to directly choose local renewables- Vandebron, Electron, Picl5, Dajie, Powerpeers.
One can only speculate on market or customer growth forecasts for P2P trading at this early stage of the potentially disruptive industry. However, there are data for two industries that are critical to enabling the formation of P2P markets – distributed generation and smart grids. The global distributed generation market size is expected to grow from USD 58,904.20 Million in 2019 to USD 118,898.35 Million by 2025 at a Compound Annual Growth Rate (CAGR) of 12.41% during the forecast period. The smart grid market size is expected to grow from USD 23.8 billion in 2018 to USD 61.3 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 20.9% until 2023. (markets&markets; prnewswire)
Supporting Factors
The key supporting factors of P2P energy trading are:
Reliable platform
Good customer service
Conducive regulatory framework
Reliable grid
Government Initiatives
What efforts and policies are local/national public administrations undertaking to help further and support this Solution?
Policies supporting the implementation of such solutions (EU-level or national level):
EU Directive 2018/2001
“‘Peer-to-peer trading’ of renewable energy means the sale of renewable energy between market participants by means of a contract with pre-determined conditions governing the automated execution and settlement of the transaction, either directly between market participants or indirectly through a certified third-party market participant, such as an aggregator. The right to conduct peer-to-peer trading shall be without prejudice to the rights and obligations of the parties involved as final customers, producers, suppliers or aggregators.”
Article 21: Member States shall ensure that consumers are entitled to become renewables self-consumers, subject to this Article.
Self-consumers are entitled to… sell their excess production of renewable electricity, including through… peer-to-peer trading arrangements, without being subject to:
In relation to the electricity that they consume from or feed into the grid, to discriminatory or disproportionate procedures and charges, and to network charges that are not cost-reflective.
In relation to their self-generated electricity from renewable sources remaining within their premises, to discriminatory or disproportionate procedures, and to any charges or fees.
Stakeholder Mapping
Which stakeholders need to be considered (and how) regarding the planning and implementation of this Solution?
The following graphic shows the goals, the relations as well as possible pain points of the key stakeholders of P2P energy trading.
Stakeholder Map of a P2P Energy Trading System (BABLE, 2021)
The creation of this solution has been supported by EU funding
Use Cases
Explore real-life examples of implementations of this Solution.
Energy
Building
Mobility
Sustainable Energy Management Service (SEMS)
This measure involves the development of an advanced, data-rich, management system which gains maximum benefits from the retrofitted buildings. Energy data is shared through the open platform, enabling energy services to be provided that reduce energy use and bills.
A Virtual Power Plant energy management platform, providing the capability to city stakeholders to actively manage Distributed Energy Resource (generation, storage and load) from a single platform.
The NRGcoin mechanism replaces traditional high-risk renewable support policies with a novel blockchain-based Smart Contract, which better rewards green energy. For every 1kWh of green energy, consumers pay 1 NRGcoin directly to the Smart Contract, protecting prosumers from policy changes.
Energy Communities with Agro-Photovoltaic Projects
Citizens are involved in the definition of the actual needs and the most appropriate solutions for the energy community. They also participate in the design of the energy community as an entity (legal form, structure, organisation, rules of operation and governance), and management of decisions.
Approximately one-quarter of the energy price is owed by the transportation of the energy. The implementation of a local energy system can shift the energy production from a centralised system to a decentralised system.
According to the Energy Performance of Buildings Directive (EPBD), buildings are responsible for approximately 40% of energy consumption and 36% of CO2 emissions in the EU.
Energy storage systems are used to store available energy that is not immediately needed for later use. With storage, energy can be used when needed. The goal is to create a reliable and environmentally friendly system. As the share of renewable energies increases, so does the need for storage.
Microgrids are emerging as an attractive, viable solution for cities, utilities, and firms to meet the energy needs of communities by leveraging more sustainable resources, while increasing resilience, reducing emissions, and achieving broader policy or corporate goals.
The supply of energy to households, public buildings and services accounts for the majority of GHG emissions in the majority of municipalities. Municipal Energy Saving Systems represent punctual solutions to optimise energy consumption.