Defining Peer-to-Peer Energy Trading, Community Self-Consumption and Transactive Energy Models.
As energy end-users take on a more active role in the energy system, new energy business models are developing to tackle a key challenge: how can we integrate decentralised energy assets into the grid and incentivise prosumers to provide flexibility services? One solution lies in models such as peer-to-peer energy trading (P2P), transactive energy (TE) and community/collective self-consumption (CSC). These models create markets for small-scale prosumers to trade electricity with one another and other actors.
The Global Observatory on Peer-to-Peer, Community Self-Consumption and Transactive Energy Models (GO-P2P) is a Task of the Users TCP, providing a forum for international collaboration to understand the policy, regulatory, social, and technological conditions necessary to support the wider deployment of P2P, TE, and CSC models. Terms referring to these new energy models are being used interchangeably and inconsistently across different contexts and disciplines. This creates challenges for the regulating, as well as for the research and practical implementation of these models. GO-P2P’s latest output addresses this issue in a new paper which aims to find out: What are the key defining characteristics of the class of models known as P2P, TE and CSC – and what distinguishes these models from each other?
Findings are based on five group interviews with experts across 13 countries, each with a different disciplinary focus: power systems integration; ICT/data; transactions and markets; social/economic value; and policy and regulation. Additionally, a literature review of 137 academic, policy, and industry outputs was carried out to answer this question.
Across both analyses, several features emerged that distinguish P2P/TE/CSC models from traditional energy systems. These models:
- Are sub-markets that operate within or alongside traditional energy markets.
- Involve a form of energy trading or sharing, with or without intermediaries.
- Rely on some form of automation of transactions.
- Promote and support local energy generation and consumption.
- Encompass both geographically-bounded trading and non-geographically bounded trading.
- Feature price negotiation mechanisms that reflect the aims of the market.
However, there were some features that were unique to each individual model (as set out in the diagram below):
- Peer-to-peer energy trading models typically use economic incentives but also appeal to social, energy democratisation, and environmental benefits. Participants are typically small scale and equal in size and can trade within a community or across longer distances.
- Characteristics of transactive energy models focus more on system benefits such as grid optimisation, with economic incentives for participants. Active participation is defined in terms of allowing prosumers to set preferences and have more control over their energy management.
- Community/collective self-consumption is the least well-defined model. Unlike P2P and TE, these are typically bound at the local scale or small geographic region. They are community-orientated in terms of their ownership structures and they aim to deliver shared benefits for local communities.Overall, key differences between P2P, TE, and CSC stem from the problems they are designed to tackle. As these models scale and interact with new market layers, it is likely they will become more similar and their differences will come down to local contexts and constraints.These findings provide a starting point for developing a shared understanding of this class ofmodels, across international borders and sectors. They form the basis upon which GO-P2P will select the P2P/TE/CSC pilots to include in its international comparison of factors enabling or inhibiting the rollout of these new energy models.The full paper is available for download at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4207445For further information, please contact the lead authors of the paper:
Nicole Watson (firstname.lastname@example.org) and Anna Gorbatcheva (email@example.com)For more information about GO-P2P, please see: https://userstcp.org/task/peer-to-peer-energy-trading/