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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 consumptionHigh cost of energyHigh transmission and infrastructure costsRising demand for renewablesLimited 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.

Fully Decentralised Market (Sousa, 2019)

Supporting City Context

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.

Community-based Market (Sousa, 2019)

Supporting City Context

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. 

Hybrid Market (Sousa, 2019)

Data and Standards

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:

  1. Reliable platform
  2. Good customer service
  3. Conducive regulatory framework
  4. 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.

Energy

Building

Smart Energy and Self-Sufficient Block

A plan to reduce electric consumption in tertiary buildings in Barcelona, through the installation and usage of photovoltaic solar panels. 

Energy

ICT

Smart City Central Energy Controller

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.

Energy

NRGCoin

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

Building

Other

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.

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Energy Storage Systems

Energy Storage Systems

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.

Smart Microgrids

Smart Microgrids

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.

Municipal Energy Saving Systems

Municipal Energy Saving Systems

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.

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