Electricity from and for the neighbour: Practice test for P2P energy trading
Energy communities are set to revolutionize the power supply: with local, decentralized solutions that strengthen the involvement of private households in the energy transition. The idea is very simple. If you produce your own energy, you can simply sell surpluses to your neighbours. Or, if necessary, buy more electricity from the neighbours.
Everyone is a producer and consumer at the same time – in a community of "prosumers" in a small peer-to-peer network.
Apart from regulatory issues and technical feasibility, the main question is: How is this form of energy trading received by the "prosumers"?
International projects gain practical experience
As simple as the concept sounds at first, the technical background and legal requirements are complex. With trading via peer-to-peer networks, neighbourhoods, districts or entire towns can join forces and trade their self-produced electricity.
There are projects all over the world that are investigating the possibilities of this approach in field trials. The practical experience is important to test the model for its suitability for everyday use.
The right technology and a suitable legal framework are only two aspects of P2P energy trading. A fundamental third issue is user acceptance. Only if the concept is reasonable, transparent and economically attractive for them, energy trading in the neighbourhood can play a decisive role in the electricity supply of the future.
Flexible power supply – but how?
The right business model is an important factor for decentralized P2P trading in energy communities. After all, the main advantage of the concept is that it can act much more flexible when buying and selling electricity. All participants should benefit financially – without any disadvantages for security of supply, grid stability and grid infrastructure.
Basically, two models have currently emerged, which are used as a basis in international projects:
-Market platforms are trying to integrate decentralised producers as providers at the distribution grid level. GOPACS in the Netherlands and Piclo Flex in England are two examples that have already been in operation since 2019.
-Aggregator platforms are more focused on a local energy market. Repsol Solmatch in Spain or Quartierstrom 1.0 in Switzerland work according to this concept.
Quartierstrom: A Swiss success story
In Walenstadt, Switzerland, residents are already looking ahead to the second round of their local electricity market. The first project, entitled "Quartierstrom 1.0", was successfully completed in January 2020.
For two years, 37 households and a retirement home took part in the field test. During this time, they were able to deal the solar power from their photovoltaic systems with the other participants in the neighbourhood.
The results are positive. Not only because the technical feasibility of peer-to-peer electricity trading using blockchain technology has been proven. But above all because of the committed participants who actively used the local energy market. With "Quartierstrom 2.0", a trading platform with new functions is now to be created.
The path to the local energy market
Technical equipment, a simple trading system and committed participants – these are the three essential secrets of the success achieved with "Quartierstrom 1.0". The project shows how the local energy transition can also work in other energy communities.
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Technical basics
The prerequisites for the "Quartierstrom 1.0" project were to equip the participating households with PV systems and a smart meter. In this way, the generation of electricity and its consumption could be measured continuously.
In order to record the transactions within the local energy market, blockchain technology has been successfully used. An automatic blockchain protocol served as the basis for trading. -
Easy trading
There was a simple principle behind the energy trading in the Walenstadt project: Anyone who wanted to sell their surplus solar power set a minimum price for it. Conversely, households that wanted to buy electricity could set a maximum price.
In fact, this possibility was not crucial to the success of the project. On the contrary, more than half of the participants wanted automatic pricing.
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Great commitment
The behaviour of the users during the course of the project was particularly gratifying. The local energy market was very well received and actively used. Not least because of the pricing the trade was perceived as fair: For local solar power, the suppliers determined prices that were roughly at the level of the usual grid electricity.
Another advantage mentioned by the participants was the possibility of always having a real-time overview of market activities, electricity generation and consumption via the digital portal that has been set up. This aspect is also important in terms of acceptance and understanding of the local energy market
Peer-to-Peer for Smart Village Networks
In Bangladesh, the P2P approach is being used for something bigger. After all, the "SOLshare" project has not simply created a peer-to-peer network for energy trading in Shariatpur.
The project gives many households access to electricity for the first time. In rural areas of Bangladesh, this affects 72 percent of households. The mini-grid includes domestic PV systems and can also supply households that cannot generate electricity themselves.
So-called SOLshare meters function as a bi-directional measurement unit that is used for payment, customer service and monitoring at the same time. If you need electricity, you simply top up your credit via cell phone and can then use the surplus solar power from the generators in the mini-grid.
Peer-to-Peer energy trading: Taking people along
Many factors are responsible for the success of the energy transition, but the most important one should not be forgotten: the people. This major project can be brought much closer to people with P2P energy trading – by becoming part of the change themselves and actively shaping it. Less abstract but can therefore be experienced directly in one's own household.
Through the peer-to-peer approach, people experience the value of clean, decentralized energy production. They become more independent, achieve financial benefits and can transparently track the impact of their consumption behavior. This makes the energy transition tangible.
Projects such as SOLshare in Bangladesh or GOPACS in the Netherlands show that the P2P concept has enormous potential on both a large and small scale. And they reveal that the energy transition can only succeed if it really reaches everyone. With decentralized, local electricity trading, people can be put at the center. This way, they have it in their own hands to get the best out of self-produced, renewable energies – for themselves, for their neighbours, for the environment and the climate.
