Peer to peer Energy Trading: The power of Blockchain-enabled Energy platforms

Peer-to-peer(P2P) energy trading is the buying and selling of energy between two or more interconnected parties[1]. Often in the form of solar energy, any excess energy can be transferred and sold to other users through a secure platform. Peer-to-peer energy trading allows consumers the choice to decide on whom they purchase electricity from, and who they sell it to, and hence take the monopoly away from utility companies and also help increasing access to cheaper and renewable energy[2].

Currently, excess solar energy is exported back to the grid for a small feed-in tariff rate[3]. However, this method is becoming obsolete as the advantage this system provides to energy generating consumers(prosumers) is minimal. Also, more people are looking for flexibility and control in managing how their resources are distributed.

The trading of energy is done using Blockchain(if you want to know more about blockchain, click here). Blockchain processes and stores information, such as transactions of assets. These assets can be in the form of renewable energy credits, which can be traded through the database. Peer-to-peer energy trading platforms such as blockchain allow consumers to share their excess energy amongst one another and control how it’s distributed through microgrids. Users who both sell and consume energy are called ‘prosumers’. Even if you don’t have solar panels, you can still purchase energy from others!

Fig 1: Blockchain enabled P2P uses smart contracts and shared ledgers
Fig 1: Blockchain enabled P2P uses smart contracts and shared ledgers

Benefits of Peer-to-Peer Trading:

Peer-to-peer Energy trading has several wide-ranging benefits[2][4]:

  • Using blockchain, all transactions are public and once on the blockchain cannot be altered in any way creating full transparency.
  • Those without solar panels are still able to access renewable energy at a reasonable price from their neighbours, and those that sell their excess energy can do so at a price that is more than they’d receive as a feed-in tariff from their retailer.
  • Energy does not have to be transported from centrally located power plants, reducing electricity transportation costs.
  • Energy generation can be created from renewables, which has several benefits alone. 
  • Energy can be bought from a known source (which allows you to choose where your energy comes from, e.g. from a specific community project you might like to support).
  • Providing a choice for dealing with other consumers and cutting out the middleman (electricity retailers), hence making the process more democratic.
  • These systems are very flexible. A new member can be added to an existing trading network with ease, without causing a disturbance in the load balance.

Can this system be implemented?

The answer is a resounding yes! In fact, there are a handful of projects where these systems are currently being used! Here are a few examples:

LO3

LO3 uses a platform called Exergy, using which households and businesses trade electricity on an auction market. The first recorded peer-to-peer energy trade occurred in Brooklyn, New York, in 2016[5] when a resident with solar panels sold a few kilowatt hours to his neighbour via the Ethereum blockchain. Following a huge success in New York with the Brooklyn Microgrid, LO3 is now working on a closed-market project in South Australia, partnering with Yates Electrical Service.

Power Ledger

Power Ledger is an Australian technology company that has developed a blockchain-enabled peer-to-peer renewable energy trading platform[6]. The platform facilitates the buying and selling of renewable-generated electricity in real time, enabling users with solar panels to trade their excess solar energy with their neighbours. Power Ledger’s technology won Sir Richard Branson’s global Extreme Tech Challenge award in 2018.

SonnenFlat

SonnenCommunity is an exclusive network made up of SonnenBatterie customers[7]. Acting similar to a P2P trading platform, sonnenCommunity members are able share their excess solar energy to others through a program called sonnenFlat.

To participate, SonnenFlat customers must have a solar PV system of at least 5kW and a sonnenBatterie eco 8.8 or above. The benefit of sonnenFlat is that users can avoid unexpected price hikes and increased rates, and instead just pay a flat fee, with any excess energy charged accordingly.

Suncontract

Suncontract launched the world’s first trading platform on April 13th, 2018 in Slovenia. The company has partnered with European nations and many energy sectors and blockchain partnerships to provide an energy trading platform to households. Via an app, users can enter into deals with each other, set prices and share energy amongst one another. While the project is currently being implemented in Slovenia, it will shortly begin in the European Union where they have received support from the government and reputable EU commissioners.

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Source: All references are brought in the website article.

Photo:@ we mention sources of photos here

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References

[1] https://www.infiniteenergy.com.au/peer-to-peer-energy-trading/

[2] Andoni M., Robu V., Flynn D., Abram S., Geach D., Jenkins D., MacCallum P., Peacock A. “Blockchain technology in the energy sector: A systematic review of challenges and opportunities”. Renewable and Sustainable Energy Reviews. 2019

[3] https://balkangreenenergynews.com/feed-premiums-auctions-seen-replacing-obsolete-feed-tariff-model/

[4] Tushar, Wayes & Yuen, Chau & Mohsenian-Rad, Hamed & Saha, Tapan & Poor, H. Vincent & Wood, Kristin. (2018). Transforming Energy Networks via Peer to Peer Energy Trading: Potential of Game Theoretic Approaches. IEEE Signal Processing Magazine. 35. 10.1109/MSP.2018.2818327. 

[5]. lo3energy.com

[6] www.powerledger.io

[7] sonnengroup.com/sonnencommunity/

[8] suncontract.org