Business Models: Innovation Landscape (collection)

usiness

odels

Business Models:

Innovation Landscape

• Aggregators

• Peer-to-peer tradi

• Energy-as-a-service

• Community ownership

• Pay-as-you-go models

AGGREGATORS

INNOVATION LANDSCAPE BRIEF

Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed and/or stored,

provided that appropriate acknowledgement is given of IRENA as the source and copyright holder. Material in this publication that

is attributed to third parties may be subject to separate terms of use and restrictions, and appropriate permissions from these third

parties may need to be secured before any use of such material.

ISBN 978-92-9260-114-0

Citation: IRENA (2019), Innovation landscape brief: Aggregators, International Renewable Energy Agency, Abu Dhabi.

About IRENA

The International Renewable Energy Agency (IRENA) is an intergovernmental organisation that supports

countries in their transition to a sustainable energy future, and serves as the principal platform for

international co-operation, a centre of excellence, and a repository of policy, technology, resource and

financial knowledge on renewable energy. IRENA promotes the widespread adoption and sustainable

use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and

wind energy in the pursuit of sustainable development, energy access, energy security and low-carbon

economic growth and prosperity. www.irena.org

Acknowledgements

This report was prepared by the Innovation team at IRENA’s Innovation and Technology Centre (IITC) and was authored

by Arina Anisie and Francisco Boshell with additional contributions and support by Harsh Kanani and Rajesh Singla

(KPMG India).

Valuable external review was provided by Jan Aengenvoort (Next Kraftwerke), Bud Vos (Enbala) and Varun Gaur (energy &

meteo systems).

Disclaimer

This publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA to verify the

reliability of the material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-party

content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or liability for

any consequence of use of the publication or material herein.

The information contained herein does not necessarily represent the views of all Members of IRENA. The mention of specific

companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in preference to

others of a similar nature that are not mentioned. The designations employed and the presentation of material herein do not imply

the expression of any opinion on the part of IRENA concerning the legal status of any region, country, territory, city or area or of

its authorities, or concerning the delimitation of frontiers or boundaries.

Photographs are from Shutterstock unless otherwise indicated.

This document does not represent the official position of IRENA on any particular topic. Rather, it is intended as a contribution

to technical discussions on the promotion of renewable energy.

Increased digitalisation and smart metering have created new business models.

Aggregators are a new market player that can optimise the use of

distributed energy resources.

WHAT ARE AGGREGATORS

AND DERs?

Distributed energy resources (DERs) are small and medium-sized power resources

connected to the distribution network.

Aggregators bundle DERs to engage as a single entity – a virtual power plant

(VPP) – in power or service markets.

AGGREGATORS

3 SNAPSHOT

Global market value of USD 762 million in 2016,

expected to reach USD 4 597 million in 2023

World’s Largest VPP is expected to connect

DERs in 50,000 homes to meet 20 % of South

Australia’s daily power demand.

Projects in Netherlands, Germany and Australia

are aggregating behind the meter batteries to

provide grid services.

BENEFITS

Aggregators use a centralised IT system to remotely control

the DERs and optimise their operation.

They can provide:

➜ Load shifting

➜ Balancing services to TSOs

➜ Local ﬂ exibility to DSOs

2 KEY ENABLING FACTORS

Smart meters &

Communication Infrastructure

Regulatory framework allowing participation of

new market players

Accurate data (weather forecast, load

projections, wholesale prices)

Utility Grid

Cloud Computing

Electric Vehicles

CommunicationsElectrical Infrastructure

Wind Power

Producers

Dispatchable Loads

Energy Storage Systems

PV Owners

Internet

VPP

www.irena.org

INNOVATION LANDSCAPE BRIEF

ENABLING TECHNOLOGIES SYSTEM OPERATION

BUSINESS MODELS

MARKET DESIGN

INNOVATION

DIMENSIONS

1 Utility scale batteries

2 Behind-the-meter

batteries

3 Electric-vehicle

smart charging

4 Renewable

power-to-heat

5 Renewable

power-to-hydrogen

6 Internet of Things

7 Artiﬁcial intelligence

and big data

8 Blockchain

9 Renewable mini-grids

10 Supergrids

11 Flexibility in conventional

power plants

12 Aggregators

13 Peer-to-peer electricity

trading

14 Energy-as-a-service

15 Community-ownership

models

16 Pay-as-you-go models

17 Increasing time

granularity in electricity

markets

18 Increasing space

granularity in electricity

markets

19 Innovative ancillary

services

20 Re-designing capacity

markets

21 Regional markets

23 Market integration

of distributed energy

resources

24 Net billing schemes

25 Future role of distribution

system operators

26 Co-operation between

transmission and

distribution system

operators

27 Advanced forecasting

of variable renewable

power generation

28 Innovative operation

of pumped hydropower

storage

29 Virtual power lines

30 Dynamic line rating

ABOUT THIS BRIEF

his brief forms part of the IRENA project

“Innovation landscape for a renewable-

powered future”, which maps the relevant

innovations, identiﬁes the synergies and

formulates solutions for integrating high shares

of variable renewable energy (VRE) into power

systems.

The synthesis report, Innovation landscape for a

renewable-powered future: Solutions to integrate

variable renewables (IRENA, 2019), illustrates the

need for synergies among dierent innovations

to create actual solutions. Solutions to drive the

uptake of solar and wind power span four broad

dimensions of innovation: enabling technologies,

business models, market design and system

operation.

Along with the main report, the project includes

a series of briefs, each covering one of 30 key

innovations identiﬁed across those four dimensions.

The 30 innovations are listed in the ﬁgure below.

AGGREGATORS

DISTRIBUTED

ENERGY RESOURCES

Distributed

generation

Behind-the-meter

batteries

Smart charging

electric vehicles

Power-to-heat

Demand

response

This brief provides an overview of an innovative

business model: aggregators.

An aggregator can operate many distributed

energy resources (DERs) together, creating a

sizeable capacity similar to that of a conventional

generator. This aggregation also can be called a

“virtual power plant”. Aggregators can then sell

electricity or ancillary services via an electricity

exchange, in the wholesale market, or through

procurement by the system operator. The brief

focuses on the various services that aggregators

can provide to support power system

transformation and the integration of VRE.

The brief is structured as follows:

I Description

II Contribution to power sector transformation

III Key factors to enable deployment

IV Current status and examples of ongoing

initiatives

V Implementation requirements: Checklist

Distributed energy resources (DERs) are small or medium-sized resources, directly connected

to the distribution network (EC, 2015). DERs include distributed generation, energy storage

(small scale batteries) and controllable loads, such as electric vehicles (EVs), heat pumps or

demand response.

INNOVATION LANDSCAPE BRIEF

I. DESCRIPTION

1 Weather forecasts are used to predict power generation from non-dispatchable renewable energy resources such as solar and

wind power.

n aggregator is a grouping of agents in a

power system (i.e., consumers, producers,

prosumers or any mix thereof) to act as a single

entity when engaging in power system markets

(both wholesale and retail) or selling services

to the operator (MIT, 2016). In the context of

this brief, an aggregator is a company that

operates a virtual power plant (VPP), which is

an aggregation of disperse DERs with the aim of

enabling these small energy sources to provide

services to the grid.

VPP operators aggregate DERs to behave like a

traditional power plant with standard attributes

such as minimum / maximum capacity, ramp-up,

ramp-down, etc. and to participate in markets

to sell electricity or ancillary services. The VPP

is controlled by a central information technology

(IT) system where data related to weather

forecasts

, electricity prices in wholesale markets,

and the overall power supply and consumption

trends are processed to optimise the operation of

dispatchable DERs included in the VPP.

An aggregator can help in better integration of

renewable energy resources by providing both

demand- and supply-side ﬂexibility services to

the grid. Demand-side ﬂexibility is provided by

aggregating demand-response resources or

energy storage units to act to grid requirements.

Supply-side ﬂexibility is provided by optimising

power generation from ﬂexible resources such as

combined heat and power (CHP) plants, biogas

plants, etc. and the use of energy storage units.

Operation optimisation is done based on data

on historical and forecasted data on demand,

generation and prices. Figure 1 provides an

overview of how an aggregator operates the

distributed energy resources.

AGGREGATORS

Note: A central IT control system or a decentralised energy management system (DEMS) sends an optimised schedule to the

dispatchable distributed energy resources.

Figure 1 Overview of an aggregator

Non-dispatchable

units such as solar,

wind power units, etc.

Dispatchable units

such as CHP, biogas,

demand response, etc.

Central IT

control system

Grid

Storage units

Forecasts

➜ Demand forecast

➜ Supply forecast

➜

Power price forecast

Power ﬂow

Information ﬂow

Results

Optimized Output

INNOVATION LANDSCAPE BRIEF

II. CONTRIBUTION TO POWER

SECTOR TRANSFORMATION

2 PowerMatcher is a smart grid co-ordination mechanism developed by the Netherlands Organisation for Applied Scientiﬁc Research

(TNO).

y bundling DERs and creating VPPs,

aggregators create a sizeable capacity that

becomes eligible to participate in wholesale

power markets. The aggregator can provide

various grid services such as frequency regulation,

operating reserve capacity, etc. by optimising a

suitable portfolio of distributed energy resources.

A VPP can include fast-response units such as

super capacitors and batteries, along with CHP

and biogas power plants and demand-response

resources to provide dierent ﬂexibility services

(Ma et al., 2017).

The beneﬁts that an aggregator can provide

include:

Services to help operate the power

system

• Load shifting: Aggregators can enable real-

time shifting of commercial and industrial loads

to provide demand-side management services

to grid operators, based on price signals. A ﬁeld

trial conducted with the PowerMatcher

Suite in

the Netherlands showed that peak demand can

be reduced by 30 % to 35 % by managing heat

systems (micro CHP and heat pumps) (TNO,

2016). This makes a business case for deferred

investments in distribution and transmission

grid infrastructure.

• Balancing services: Aggregators can use

optimisation platforms to provide a range

of ancillary services, increasing the system’s

ﬂexibility to integrate VRE resources.

Aggregators can mitigate the “ramps” caused

by solar going down in the evening (i. e., the

neck of the duck in the duck curve) or any

other variable generation output. In addition

to providing ramping requirements, VPPs can

be used to provide ancillary services. Next

Kraftwerke, a VPP in Germany, has its power

shifted up and down as often as 20 times

a day. The power plant can be controlled

in 15-minute increments based on current

prices on the spot market. The transmission

grid operators beneﬁt from valuable control

reserve. The power plant oers an average

electric capacity of 1.2 megawatts (MW),

while the installed capacity is nearly 4 MW.

Inclusion of the power plant’s added ﬂexibility

from storage plants can help compensate

for ﬂuctuations in wind and solar (Next

Kraftwerke, n.d.).

• Local ﬂexibility: Aggregators can provide

ﬂexibility at the distribution system operator

level, if there is a regional / local market for

ﬂexibility in place.

Decreasing the marginal cost of power

In some cases, large power plants are used

to supply electricity in order to meet a small

quantity of demand, leading to a higher cost of

power production. For example, for an increase

in peak demand, an additional fossil fuel plant

needs to be dispatched, increasing the system’s

marginal cost. Instead, an aggregator might be

able to reduce the load and therefore decrease

the marginal cost. Also, resources included in an

aggregator can replace the peak power plant by

dispatching the aggregated distributed generation

technologies and charged batteries.

AGGREGATORS

Optimising investment in power system

infrastructure

An aggregator can bundle and control the DERs

to provide real-time operating reserve capacity

that can participate in ancillary markets when

needed. This can enhance the economic return for

the owners of the distributed energy resources.

Further, using existing distributed energy

resources to provide reserve capacity services can

help in avoiding investments in peak generating

capacity. For example, in the US state of New

Mexico, the Enbala VPP is being used to provide

20 MW to 25 MW of ﬂexibility, mitigating the

need for expensive traditional power generation

resources. A VPP helps save on the cost of new

capacity additions while generating additional

revenues for already connected distributed

energy resources (Next Kraftwerke, n.d.).

The US Energy Information Administration

estimated the cost of building a new coal-ﬁred

power generation unit in the range of USD2934 to

USD6599 per kW, depending on the technology

used. The cost of building a gas-ﬁred plant would

range from USD676 to USD2095per kW.

Both of these options have signiﬁcant

environmental and stranded investment risks.

Using already connected energy resources,

through aggregators, can minimise the investment

needed in additional capacity. Aggregators can

provide ﬁnancial beneﬁts to owners of distributed

energy resources by maintaining demand and

supply balance at a cost of USD70 to US100 per

kW (Enbala, n.d.).

By using aggregators to provide demand-side

management and load shifting, investments in

transmission and distribution grid reinforcements

also could be minimised.

Potential impact on power sector transformation

In South Australia, aggregators can meet

20 % of daily power demand and provide 30 %

savings on energy bills.

The South Australian government and Tesla are

developing a network of 50 000 household

solar PV units connected into an aggregator.

This is expected to meet around 20 % of

South Australia’s average daily power demand

(250 MW).

Additionally, the new power plant is expected to

lower energy bills for participating households.

The wholesale price is estimated to drop by

around USD3 per MWh for all customers with

each additional 50 MW of capacity that is

brought onto the system via the aggregator.

The Australian VPP Tesla proposal could

reduce the wholesale electricity price by

around USD8/MWh, or around USD90 million

per year across all South Australian customers,

which means 30 % of the total energy bill

(Frontier Economics, 2018).

INNOVATION LANDSCAPE BRIEF

III. KEY FACTORS TO ENABLE

DEPLOYMENT

Regulatory framework

A liberalised wholesale power market with no

price caps (especially with spot markets in place)

is essential for establishing aggregators. The

main incentives for creating an aggregator are

given by the dierence between peak / o-peak

pricing on wholesale markets or by signals from

transmission system operators to deliver control

reserve or other ancillary services.

The regulatory framework should enable

aggregators to participate in the wholesale

electricity market and also in the ancillary

services market. For example, the New York

Independent System Operator (NYISO)

proposed aggregating DERs connected to the

same bulk transmission node to ensure that

these resources are compensated based on

their locational and temporal value (NYISO,

2017). While NYISO has restricted aggregation

of DERs to a speciﬁed geographical limit, other

system operators can allow DER aggregation

without geographical barriers.

Advanced metering infrastructure

Real-time data acquisition from DERs is necessary

for the creation and operation of a VPP. This would

require smart meters, broadband communication

infrastructure, network remote control and

automation systems (network digitalisation). Real-

time communication between VPP operators and

the connected DERs is needed. Network remote

control and digitalisation help in improving

network eciency since the data gathered can

be used to better forecast demand. Two-way

communication network devices are essential.

Better generation forecasting

Advanced forecasting tools and techniques

are essential to predict power generation from

renewable energy and load forecast in the power

system for deriving an optimised schedule of

dispatchable DERs. Forecasts for distributed

generation can be integrated with load forecasting

to obtain net load forecasts, thus increasing the

visibility of demand-side variations.

AGGREGATORS

IV. CURRENT STATUS AND

EXAMPLES OF ONGOING

INITIATIVES

ome of the key indicators about aggregators

have been captured in the table below,

followed by examples of aggregators.

Description

Value

Virtual power plant (VPP) global market value

USD 762 million in 2016; expected to reach USD 4 597 million in 2023 (compound

annual growth rate of 25.9 % from 2017 to 2023) (Research and Markets, 2018)

Countries with established regulatory

frameworks allowing VPP trading

Australia, Austria, Belgium, Germany, Denmark, France, Netherlands,

UK, US, etc.

Services provided by aggregators

• Forecasting and trading of distributed energy resources

• Optimised dispatching of distributed energy resources according to intraday

pricing on spot markets

• Delivery of ancillary services to transmission (and potentially distribution)

system operators

VPP contributes to renewable energy

integration and system stability in

South Australia

Tesla proposed the development of a 250 MW

virtual power plant to contribute to stabilising

South Australia’s electricity infrastructure and to

improve the security and reliability of the grid in

an area where nearly half of the electricity comes

from wind farms. The initiative will start with a

trial in 1100 public housing units (Government of

South Australia, 2017).

The technology involves four key components:

• Smart meters installed in every participating

household to assist in controlling the rooftop

solar and battery, and to measure the power

ﬂows;

• A network of rooftop solar PV systems installed

on public housing (5 kW solar panel system);

• Battery storage installed on public housing

in South Australia (5 kW/13.5 kWh Powerwall

2Tesla battery); and

• A computer system to control the storage,

use and transfer of renewable and battery-

stored power between houses and the grid,

to maximise the value for customers while

delivering services to the grid when needed.

The impact of such a solution would be considerable

in terms of renewable energy integration, with

approximately 130 MW of added rooftop solar

PV generation capacity and 130 MW/330 GWh

of distributed, dispatchable battery storage. This

approximately doubles if the roll-out is extended

to a similar number of private customers.

In terms of the ﬂexibility added to the system,

the participation of 50 000 households in the

programme would add 250 MW of peak capacity

to the system or, alternatively, reduce the

demand on the central grid by 250 MW, freeing

the capacity to be supplied to other customers.

Table 1 Aggregators: Key indicators

INNOVATION LANDSCAPE BRIEF

In terms of cost reduction, the wholesale price

in South Australia is estimated to drop by

around USD 3/MWh for all customers, with each

additional 50 MW of capacity brought into the

system that would not otherwise be operating.

This suggests that if only the public housing

customers participated in the arrangement, the

Tesla proposal could reduce the wholesale price

3 Converted from AED at the rate of 1 AED = 0.72 USA

by around USD 6/MWh

, or about USD 65 million

per year, across all South Australian customers.

The savings would be approximately double if the

project could achieve its full scale of production of

250 MW. Moreover, the government has provided

estimates showing that the project could lower

the power bills of those who sign up by 30 %

(Frontier Economics, 2018).

Table 2 Key features of leading aggregators

Aggregator

Country / Region

Key features

AGL Australia • AGL’s VPP consists of a network of behind-the-meter batteries providing a

range of beneﬁts to the household, the retailer and the local network. The VPP

aims to both cut consumer electricity costs and help maintain grid stability in

South Australia (AGL, n.d.).

Eneco CrowdNett Netherlands • Founded in 2016, Eneco CrowdNett is a Dutch-based aggregator of home

batteries and provides grid services through a network of behind-the-meter

batteries owned by prosumers.

• Consumers are provided batteries at a discount and receive an additional

EUR 450 annually in exchange for access to 30 % of the battery capacity at any

time during the day (Hanley, 2016).

Energy & meteo

systems (emsys)

Germany • Emsys supports power aggregators in ecient market integration of their

power assets.

• Emsys’s oering in VPP includes: connection to distributed power plants through

various interfaces, real-time data management, remote control of wind and PV

(e.g., to avoid negative spot market prices), generation forecast optimisation,

energy scheduling, trading on the day-ahead and intraday spot markets, provision

of balancing power by distributed power plants (primary, secondary and tertiary

control), provision of balancing power by wind farms (tertiary control in Germany),

demand-side management and balancing group management.

• Emsys is one of the ﬁrst aggregators to execute primary control using batteries

in the German balancing power market.

Next Kraftwerke Europe • Next Kraftwerke is a network of multiple power-producing and power-consuming

units of varied sizes distributed across Europe.

• Next Kraftwerke forecasts the approximate production and consumption of

energy on a real-time basis for the balancing group. It then transmits the

schedule to the TSO on a daily basis and trades the forecasted volumes on

the day-ahead market on the stock exchange. Deviations from the forecast are

compensated through intraday trading.

• Next Kraftwerke’s VPP delivers ancillary services (primary reserve, secondary

reserve, tertiary reserves) in seven European TSO zones and uses its algorithms

to send optimised schedules to the networked units to beneﬁt from peak pricing

on wholesale markets.

• The VPP consists of around 5500 units amounting to over 4500 MW

(Next Kraftwerke, n.d.).

Stem United States • This California-based start-up with artiﬁcial intelligence technology focuses on

behind-the-meter energy storage systems and VPPs.

• It uses energy storage systems to reduce the cost of electricity for commercial

consumers. The batteries are charged when the cost of electricity is low and

discharged when the cost of electricity is high (typically during peak demand period).

• Stem can use its software to reduce the net demand of its customers, thereby

reducing the demand of the whole area when the existing supply system cannot

supply in the local area (Stem, 2019).

Other examples of aggregators

AGGREGATORS

TECHNICAL

REQUIREMENTS

Hardware:

• Controllable load and supply assets such as energy storage, electric vehicles and distributed generation

• Smart meters (to provide real-time power consumption and production), home gateways (energy boxes)

and smart appliances for energy management, to enable VPP operation

Software:

• Aggregation software, algorithm to calculate the optimal operation of each unit

• Real-time communication between the aggregator and the hardware system

• Advanced demand and supply forecasting models/platforms for optimised scheduling of dispatchable

distributed energy resources

Communication protocols:

• Common interoperable protocol for co-ordination among system operators, network operators

and prosumers

REGULATORY

REQUIREMENTS

Wholesale market:

• Participation of aggregators should be allowed in electricity wholesale markets and ancillary service markets

• Introduce regulations allowing decentralised sources to provide services to the central/ local grids

• Clear price signals to guide the aggregators’ operations

• Regulations to mandate implementation of smart meters and smart grid infrastructure

Distribution:

• Establishment of local markets for DSOs to procure services to avoid grid congestion and ensure grid stability

• Data collection, management and sharing rules for DSOs to ensure consumer privacy

Retail market:

• Regulators should deﬁne a standardised methodology for computing dynamic prices that can

be adopted by retailers.

• Functioning retail markets could provide innovative products and pricing models for various customer

needs. For example, in Finland innovative products are being introduced, and customers can opt to

choose the product and pricing method best suited to their needs (such as hourly dynamic pricing,

retailers buying excess solar photovoltaic generation as a marketbased solution, ToU taris, etc.).

• Regulation should set clear roles and responsibilities for market parties. Long-term foreseeable

regulation is needed.

• Liberalised markets, as opposed to regulated markets, could facilitate the market entry

System operation:

• Deﬁning rules for co-ordination between distribution and transmission system operators

STAKEHOLDER

ROLES AND

RESPONSIBILITIES

Aggregators:

• Provide grid-related services to DSOs, if a market is established

• Information exchange with DSOs related to capacity, location, type of DERs

Distribution system operators:

• Ensure a level-playing ﬁeld for all ﬂexibility providers

• Procure market-based ﬂexibility services from aggregators

• Securely share consumer and grid-related data with third parties as per applicable data privacy

and sharing norms

• Better forecasts for DER services based on past data or historical performance and

weather forecasts

V. IMPLEMENTATION

REQUIREMENTS: CHECKLIST

INNOVATION LANDSCAPE BRIEF

ABBREVIATIONS

AMI Advanced metering infrastructure

BtM Behind-the-meter

DEMS Decentralised energy management

system

DER Distributed energy resource

DSO Distribution system operator

EV Electric vehicle

GW Gigawatts-hour

IT Information technology

kWh Kilowatt-hour

TSO Transmission system operator

VPP Virtual power plant

VRE Variable renewable energy

BIBLIOGRAPHY

AGL (n.d.), “Introducing AGL’s virtual power

plant”, www.agl.com.au/solar-renewables/

projects/power-in-numbers.

Enbala (n.d.), “Virtual power plants:

Coming soon to a grid near you”, https://

cdn2.hubspot.net/hubfs/1537427/Chapter1.

pdf?submissionGuid=859d63d0-7af0-4c64-

9cb3-1e1e3c0bd3d4.

Frontier Economics (2018), South Australia’s

Virtual Power Plant, Frontier Economics,

Melbourne, https://www.frontier-economics.com.

au/documents/2018/02/south-australian-virtual-

power-plant-summary-note.pdf/.

Government of South Australia (2017),

“South Australia’s Virtual Power Plant”, http://

ourenergyplan.sa.gov.au/virtual-power-plant.

Hanley, S. (2016), “Netherlands utility to use

Tesla Powerwall to make a ’Virtual Power Plant'”,

Teslarati, www.teslarati.com/netherlands-utility-

use-tesla-powerwall-make-virtual-power-plant/.

IRENA (2019), Innovation landscape for a

renewable-powered future, International

Renewable Energy Agency, Abu Dhabi,

www.irena.org/publications/2019/Feb/

Innovation-landscape-for-a-renewable-powered-

future.

Ma, Z., J. D. Billanes and B. N. Jørgensen (2017),

Aggregation Potentials for Buildings – Business

Models of Demand Response and Virtual Power

Plants, MDPI.

MIT (2016), The value of Aggregators in

Electricity Systems, MIT Center for energy and

Environmental Policy Research, http://energy.

mit.edu/publication/the-value-of-aggregators-in-

electricity-systems/

NYISO (2017), Distributed Energy Resources

Roadmap for New York’s Wholesale Electricity

Markets, New York State Independent System

Operator, Rensselaer, New York.

Research and Markets (2018), “Virtual power

plant market – Industry forecast, 2017-2023”,

Business Wire, www.businesswire.com/news/

home/20171017006045/en/Virtual-Power-Plant-

Market---Industry-Forecast.

Stem (2019), www.stem.com.

TNO (2016), PowerMatcher, Matching energy

supply and demand to expand smart energy

potential, Netherlands Organisation for Applied

Scientiﬁc Research (TNO), The Hague,

www.tno.nl/media/1986/tno-powermatcher-

jrv140416-01.pdf.

www.irena.org

IRENA HEADQUARTERS

P.O. Box 236, Abu Dhabi

United Arab Emirates

www.irena.org

AGGREGATORS

INNOVATION LANDSCAPE BRIEF

PEER-TO-PEER

ELECTRICITY TRADING

INNOVATION LANDSCAPE BRIEF

Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed

and/or stored, provided that appropriate acknowledgement is given of IRENA as the source and copyright

holder. Material in this publication that is attributed to third parties may be subject to separate terms of use

and restrictions, and appropriate permissions from these third parties may need to be secured before any use

of such material.

ISBN 978-92-9260-174-4

Citation: IRENA (2020), Innovation landscape brief: Peer-to-peer electricity trading, International Renewable

Energy Agency, Abu Dhabi.

ABOUT IRENA

The International Renewable Energy Agency (IRENA) is an intergovernmental organisation that supports

countries in their transition to a sustainable energy future and serves as the principal platform for

international co-operation, a centre of excellence, and a repository of policy, technology, resource and

financial knowledge on renewable energy. IRENA promotes the widespread adoption and sustainable

use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and

wind energy in the pursuit of sustainable development, energy access, energy security and low-carbon

economic growth and prosperity. www.irena.org

ACKNOWLEDGEMENTS

This report was prepared by the Innovation team at IRENA’s Innovation and Technology Centre (IITC) with text

authored by Arina Anisie and Francisco Boshell, and additional contributions and support from Santosh Kamath and

Harsh Kanani (KPMG India).

Valuable review was provided by Thomas Morstyn (University of Oxford) and Christian Chudoba (Lumenaza) along with

Elena Ocenic, Martina Lyons and Paul Komor (IRENA).

This document does not represent the official position of IRENA on any particular topic. Rather, it is intended as a contribution

to technical discussions on the promotion of renewable energy.

DISCLAIMER

This publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA to verify

the reliability of the material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-

party content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or

liability for any consequence of use of the publication or material herein.

The information contained herein does not necessarily represent the views of all Members of IRENA. The mention of

specific companies or certain projects or products does not imply that they are endorsed or recommended by IRENA

in preference to others of a similar nature that are not mentioned. The designations employed and the presentation of

material herein do not imply the expression of any opinion on the part of IRENA concerning the legal status of any region,

country, territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundaries.

Photographs are from Shutterstock unless otherwise indicated.

PEER-TO-PEER TRADING

Trading based on P2P models makes renewable energy more accessible,

empowers consumers and allows them to make better use of their energy resources.

Ancillary services

Balancing and

congestion management

Higher renewable power

deployment and ﬂ exibility

Peer-to-peer

electricity trading



BENEFITS

Peer-to-peer (P2P) electricity

trading empowers prosumers

and consumers, leading to

increased renewable energy

deployment and ﬂ exibility

in the grid. P2P platforms

also aid in balancing and

congestion management

and providing

ancillary services.

2 KEY ENABLING FACTORS

Distributed renewable energy resources

Digitalisation

Conducive regulatory framework

3 SNAPSHOT

➜ Australia, Bangladesh, Colombia,

Germany, Japan, Malaysia, the Netherlands,

the UK, the US and others have started trial

P2P schemes.

➜ Many pilot projects used

blockchain technology.

What is P2P electricity trading?

The P2P model creates an online

marketplace where prosumers and

consumers can trade electricity, without

an intermediary, at their agreed price.

P2P

Resident with EV

Resident

with solar

Resident with rooftop solar and EVResident

www.irena.org

INNOVATION LANDSCAPE BRIEF

ENABLING TECHNOLOGIES SYSTEM OPERATION

BUSINESS MODELS

MARKET DESIGN

INNOVATION

DIMENSIONS

1 Utility scale batteries

2 Behind-the-meter

batteries

3 Electric-vehicle

smart charging

4 Renewable

power-to-heat

5 Renewable

power-to-hydrogen

6 Internet of Things

7 Artiﬁcial intelligence

and big data

8 Blockchain

9 Renewable mini-grids

10 Supergrids

11 Flexibility in conventional

power plants

12 Aggregators

13 Peer-to-peer electricity

trading

14 Energy-as-a-service

15 Community-ownership

models

16 Pay-as-you-go models

17 Increasing time

granularity in electricity

markets

18 Increasing space

granularity in electricity

markets

19 Innovative ancillary

services

20 Re-designing capacity

markets

21 Regional markets

23 Market integration

of distributed energy

resources

24 Net billing schemes

25 Future role of distribution

system operators

26 Co-operation between

transmission and

distribution system

operators

27 Advanced forecasting

of variable renewable

power generation

28 Innovative operation

of pumped hydropower

storage

29 Virtual power lines

30 Dynamic line rating

ABOUT THIS BRIEF

his brief forms part of the IRENA project

“Innovation landscape for a renewable-

powered future” which maps the relevant

innovationsidentiﬁesthesynergiesandformulates

solutions for integrating high shares of variable

renewableenergy(VRE)intopowersystems

Thesynthesisreport“Innovationlandscapefora

renewable-poweredfutureSolutionstointegrate

variable renewables” (IRENA a) illustrates

the need for synergies between dierent

innovations to create actual solutions Solutions

todrivetheuptakeofsolarandwindpowerspan

four broad dimensions of innovation enabling

technologies business models market design

andsystemoperation

Along with the synthesis report the project

includesaseries ofbriefs each covering one of

 key innovations identiﬁed across those four

dimensions The  innovations are listed in the

ﬁgurebelow

PEER-TO-PEER ELECTRICITY TRADING

This brief provides an overview of the peer-to-

peer (PP) electricity trading business model

that emerged as a platform-based scheme in

view of increasing the integration of distributed

energyresourcesintopowersystemsDistributed

energy resources allow previously “passive”

consumers (from the system operators’ point of

view)tobecome“active”consumersoftencalled

prosumers because they both consume and

produceelectricity

With PP electricity trading prosumers can

sharethebeneﬁtsofgeneratingelectricitywith

the communities that they belong to further

encouraging the consumption and deployment

of distributed renewable generation The brief

focuses on how the PP business model can

both contribute to power sector needs while

alsoempoweringconsumers

DISTRIBUTED

ENERGY RESOURCES

Distributed

generation

Behind-the-meter

batteries

Smart charging

electric vehicles

Power-to-heat

Demand

response

Distributedenergyresources(DERs)aresmallormedium-sizedresourcesdirectlyconnectedtothe

distribution network (EC ) They include distributed generation energy storage (small-scale

batteries)andcontrollableloadssuchaselectricvehicles(EVs)heatpumpsordemandresponse

Thebriefisstructuredasfollows

I Description

II Contributiontopowersectortransformation

III Keyfactorstoenabledeployment

IV Currentstatusandexamplesofongoing

initiatives

V ImplementationrequirementsChecklist

INNOVATION LANDSCAPE BRIEF

I. DESCRIPTION

 IntheEuropeancontexta“renewablesself-consumer”isdeﬁnedas“aﬁnalcustomeroperatingwithinitspremiseslocated

withinconﬁnedboundaries[]whogeneratesrenewableelectricityforitsownconsumptionandwhomaystoreorsellself-

generatedrenewableelectricityprovidedthatforanonhouseholdrenewablesself-consumerthoseactivitiesdonotconstitute

itsprimarycommercialorprofessionalactivity”(Directive(EU)ofDecemberonthepromotionontheuseof

energyfromrenewablesources)

eer-to-peer (PP) electricity trading is a

businessmodelbasedonaninterconnected

platform that serves as an online marketplace

where consumers and producers “meet” to

trade electricity directly without the need for

an intermediary PP electricity trading is also

knownasthe“Uber”or“Airbnb”ofenergyasit

isaplatformthatallowslocaldistributedenergy

generatorstoselltheirelectricityatthedesired

pricetoconsumerswillingtopaythatprice

This electricity is usually transacted between

users (buyerssellers) of the platform that also

become members of the platform for example

bypayingapre-determinedmonthlysubscription

feeJustlikeanopenmarketeconomysuppliers

seek the highest possible price keeping their

costsandproﬁtinconsiderationandconsumers

choosethelowestpricepossiblebasedontheir

needs and preferences Where the supply and

demandoers–thatisthesellandbuybids–

arematchingatradeoccurs

The common practice with traditional power

supply is that consumers purchase electricity

fromutilitiesorretailersthroughﬁxedtarisor

time-of-usetaris

In contrast prosumers (who produce as well as

consume) or “self-consumers”



 sell excessive

electricitybacktothegrid ata“buy-backrate”

asshowninFigure(Liuetal)However

consumer taris for electricity supply are

generally much higher than the buy-back rates

thatprosumerscanobtainfromsellingelectricity

totheutilityAlsotheseconsumertarisdonot

accountfortheotherbeneﬁtsthatthisrenewable

generationbringstothepowersystem

For example while a prosumer can charge an

EV using a rooftop solar plant the prosumer’s

neighbourwouldobtainelectricitytochargehis

orherEVfromadistantcentralisedpowerplant

Ifhowever the vehicle ischarged froma solar

power plant locatedin the neighbourhood the

prosumer with solar installation would receive

a “buy-back rate” for the electricity injected

intothegridHoweverthiswouldnottakeinto

account the reductions in transmission losses

and congestion that this distributed generation

provides for the network Around  of the

typical electricity cost goes towards managing

andmaintainingthepolesandwiresthatdeliver

power from generators to the premises of

customers (Auroraenergy ) Part of these

costscouldbesavedinaPPmodel

PEER-TO-PEER ELECTRICITY TRADING

Figure1 Traditional trading model of residential consumers and prosumers with utilities

SourceAdaptedfromLiuetal

Utility

Resident with EVResident with solar

Resident with rooftop solar

and EV

Resident

TARIFF

BUY-BACK

RATE

BUY-BACK

RATE

TARIFFTARIFF

ELECTRICITY FLOW

The PP electricity trading model was born as

a consequence of the increasing deployment

of distributed energy resources connected to

distributionnetworksandtheintentiontoprovide

more incentives to promote further deployment

of these resources In PP electricity trading

prosumers are allowed to switch their roles

betweenbuyersandsellerstoeitherpurchaseor

sellelectricity

In addition they are able to directly trade

electricity with other consumers to achieve a

win-winbyseekingabetteroutcomecompared

to the relatively high taris and the relatively

lowbuy-backratesInthiswaybuyerscansave

costswhilesellerscanmakeaproﬁt(Liuetal

) Figure  illustrates the structure of the

PPtradingmodel

Figure2 Structure of P2P electricity trading model

SourceLiuetal

NoteThedirectionofthearrowindicatestheaccountingandtransactionsﬂowdirections

Resident with EVResident with solar

Resident with rooftop solar

and EV

Resident

P2P

INNOVATION LANDSCAPE BRIEF

A PP trading model can be established among

neighbours within a local community as well as

on a larger scale among various communities

Figure(a) showsPPelectricity trading among

individual neighbours on a small scale which is

doneeitheronthedistributiongridorviaa“mini-

grid” set-upFigure(b)showsagroup ofsmall

communitiesormini-gridsformingabiggergroup

thattradeselectricityamongthemselvesThis is

enabled by interconnected networks owned by

distributedsystemoperatorsLikeanyPPtrading

schemethesizeandnumberofparticipantsare

important Therefore such platforms are viable

only when there are enough participants willing

totradeelectricitywitheachother

IfthePPplatform(market)operatorisorganising

trading among subscribers that are part of the

maindistributionsystem(ratherthananisolated

mini-grid) then it will need to interact with

systemoperatorsandtheelectricitymarket

Thisisbecause

• powerﬂowbetweentheparticipantswillaect

thelocaldistributionnetwork

• thelocaldistributionnetworkneedstobe

operatedmaintainedandremunerated

accordinglyand

• itwillneedtobuysellexcessdemand

generationupstream

If the PP platform operates based on an

isolatedmini-grid(andthereforehastofulﬁlthe

system operator role) then the operatorneeds

toensurethatsupplyanddemandarebalanced

at all times and at fast time scales to maintain

gridstability

Figure3 P2P electricity trading concept

SourceAdaptedfromParkandYong

(3A)

Electricity trading among

neighbours within a community

(3B)

Electricity trading among

communities within a region

PEER-TO-PEER ELECTRICITY TRADING

II. CONTRIBUTION TO POWER

SECTOR TRANSFORMATION

he PP electricity trading model makes

renewable energy more accessible

empowering consumers while making better

use of their distributed energy resources It

also keeps the community resilient to outages

in emergencies andit can improve the energy

accessinsomecases

The main power grid can beneﬁt from

decentralised PP electricity trading platforms

as well Figure  summarises the key beneﬁts

of PP electricity trading for power sector

transformation

Figure4 Key contributions of P2P electricity trading to power sector transformation

Increased renewable deployment

and ﬂexibility due to consumers’

and prosumers’ empowerment

Balancing and congestion

management through better operation

of distributed energy resources

Provision of ancillary services

to the main power grid

Improved energy access for

consumers in mini-grid set-ups

Peer-to-peer

electricity trading

INNOVATION LANDSCAPE BRIEF

Consumerandprosumerempowerment

boostingrenewablesandflexibility

PP trading platforms oer a marketplace

for prosumers to trade the renewable energy

generated at a better price encouraging the

deployment of distributed generation Similarly

PPtradingallowstheconsumerstohavecontrol

over their electricity consumption and its price

increasingﬂexibilityinthesystem

Moreover PP trading allows participants to

supporttheirlocalcommunitiesbyenablingthem

to consume renewable power and earn more

fromtheirdistributedgenerationwithorwithout

storage systems At the same time consumers

without renewable generation capacity can

beneﬁt directly from local renewable generation

throughPPelectricitytrading

ForexampleinLondon’s GlobalUniversity

(UCL) and EIA University in Colombia set up a

PP pilot project in Medellin Colombia called

the Transactive Energy Colombia Initiative In

Medellin many energy users especially those

living in high-rise buildings are not able to

generate their own electricity The main idea is

that PP trading will allow these users to buy

electricity from other people around the city

based ondierentattributes suchas renewable

sharesgenerationinfrastructureandlocation

This creation of social value around energy is a

keypointofthisproject(UCL)

ThePPpilotwillgroupresidentialuserswith

dierentincomelevelsinMedellineachofthem

independently connected to the distribution

networkLow-incomeuserswillhavesolarpanels

installedontheirrooftopsandwilltradeelectricity

with high-income consumers and prosumers

(UCL)

Balancingandcongestionmanagement

throughbetteroperationofdistributed

energyresources

PPtradingplatformsenablebettermanagement

of decentralised generators by matching local

electricitydemand andsupplyat alltimesAlong

with the higher local consumption of variable

renewable energy PP electricity trading can

helpreduceinvestmentsrelatedtothegeneration

capacityandtransmissioninfrastructureneededto

meetpeakdemand

ForexampletheSustainableEnergyDevelopment

Authority in Malaysia is piloting a PP electricity

trading project launched in November 

Prosumerscantradeelectricitywithconsumersor

selltheirexcesssolarphotovoltaicelectricitytothe

utility Tenaga Nasional Berhad (TNB) Exchanges

aretrackedviaablockchainplatformTheconcept

isillustratedinFigure

Figure5 Concept of P2P electricity trading project in Malaysia

Prosumer

Produce excess electricity

from rooftop solar panels

Smart meter

Record exchange of electricity

between prosumer, consumer & TNB,

tracked via blockchain platform

TNB’s grid

Use of TNB’s grid

Smart meter

Consumer

Purchases excess electricity

from prosumer when available;

rest of the time to purchase from TNB

SourceSEDA

PEER-TO-PEER ELECTRICITY TRADING

Preliminary ﬁndings of the pilot project show

thatPPelectricitytradinghelpstobalancelocal

generationanddemandandhasthepotentialto

enable largepenetrationofrenewableelectricity

in the grid If carried out at distribution level

PP trading can reduce peak demand and grid

congestion in the main grid With PP trading

available the amount of electricity sold back to

the grid is very small compared to the amount

of electricity traded in the community (SEDA

)Thisillustratesthebetteruseofdistributed

energy resources inside the community through

PPenergytrading

Provisionofancillaryservicestothe

mainpowergrid

In a mini-grid set-up apart from enabling PP

transactions the PP platform operator can also

enable peers to provide ancillary services to the

main grid In addition the PP electricity trading

platformcanserveasavirtualpowerplant(VPP)

Formedbyself-organisedconsumerssuchVPPs

provide services to the main grid (Formoreon

how this works see Innovation Landscape brief

Renewable mini-grids [IRENA b] and for

moreaboutVPPsseeInnovationLandscapebrief

Aggregators[IRENAc])Figureillustrates

theconcept

For example Piclo the PP electricity trading

company formerly known as Open Utility has

signed up ﬁve of the six distribution system

operators in the United Kingdom (UK) to its

ﬂexibility marketplace The Piclo Flex platform

allows distribution system operators to identify

ﬂexibilityoptionstomeettheirdistributionsystem

needsineachspeciﬁclocationofthegridPartof

atrialfundedbytheUKgovernmentthismarks

a stage in the transition of distribution system

operators from passive to active managers of

their networks The marketplace gives them the

chance to relieve constraints without having to

resorttocostlygridreinforcements

Figure6 P2P operation in a mini-grid context

SourceAdoptedfromMorstyanetal

Mini-Grid

Main-Grid

Grid services

P2P transactions

P2P operator

Grid Service contract

INNOVATION LANDSCAPE BRIEF

Improvedenergyaccessforconsumers

inmini-gridset-ups

n the context of an isolated mini-grid PP

trading could improve the energy access and

the reliability of local electricity generating

sourcesInsuchmini-gridsusersaregenerally

suppliedelectricitythroughsolarhomesystems

whichoftencannotstoretheelectricitysurplus

ByenablingPPtradingandconnectingseveral

solar home systems to each other as well as

with other homes without electricity supply

energy access of consumers can be improved

Extra generation from solar home systems

can serve another consumer in exchange for

remuneration

SOLshareaBangladesh-basedcompanypiloted

the PP electricity trading network for rural

householdswithandwithoutsolarhomesystems

in Shariatpur Bangladesh The trading network

interconnectshouseholdsviaalow-voltagedirect

currentgridandcontrolspowerﬂowsthroughbi-

directionalmeteringintegratedwithaninformation

and communications technology (ICT) back-end

that handles payment customer service and

remotemonitoringEachSOLsharemeterenables

theusertobuyandsellrenewableelectricitywith

neighbouringconsumers(householdsbusinesses

and rural industries) People in rural Bangladesh

arenowearningadditionalincomebysellingtheir

surplus electricity and at the same time new

users have gained electricity access for the ﬁrst

time(UNFCCC)

Potentialimpactonpowersectortransformation

PPtradingcangreatlyreduceoveralloperation

costs of the power system and ultimately

reducingconsumers’electricitybillsConsumers

can save in various ways On the one hand

prosumers canmonetisetheexcessproduction

of renewable energy On the other hand

consumers without generation capacity can

beneﬁt from low-cost local renewable energy

supply Examples where PP trading have

resultedincostsavingsare

•Power Ledger an Australian PP trading

platform hassaved an averageof USD

(AUD)peryearforitsenergyconsumers

on annual electricity bills and helped solar

rooftop system owners double the savings

they normally get from their solar plants

(Kabessa)

•TheNewYork-basedenergystart-upDrifta

PPtradingplatformhashelpedconsumers

saveoftheirelectricitycostscompared

to Con Edison a local utility in the New

York area(CNBC)Todrivedownthe

cost for these consumers Drift relies on

blockchain technology and algorithms to

sourceandtradepower

PEER-TO-PEER ELECTRICITY TRADING

III. KEY FACTORS TO

ENABLE DEPLOYMENT

he key success factors for PP electricity

trading platforms are the reliability of the

platformgoodcustomerservicetheavailability

of a conducive regulatory framework and a

reliablegrid

Digitalisation

In addition tothe physical layer of PP electricity

tradingfor whichanetworkisneeded (egmini-

grids micro-grids distribution network etc)

anotherlayerthatisneededforthisbusinessmodel

to be implemented is a virtual (ie digital) layer

(Figure)Anenergymanagementsystem(EMS)

isanintegralpartofit

Figure7 Illustration of the physical and virtual layer platforms of a P2P electricity network

SourceTushar

REGULATION

Network stetup

Information

system

Market

operation

Pricing

mechanism

Metering

Grid connectionGrid connection

MeteringMetering

EMS systemEMS systemEMS system

PHYSICAL LAYER

PLATFORM

PARTICIPATING

PEERS

VIRTUAL LAYER

PLATFORM

INNOVATION LANDSCAPE BRIEF

PP trading is facilitated by platforms where a

large number of peers can interact Data from

both producers and consumers need to be

collected and analysed to check the reliability

of the power system Smart meters broadband

communication infrastructure network remote

control and automation systems (network

digitalisation) are thus fundamental enablers of

platform-based business models such as the

PPelectricitytradingmodel(seetheInnovation

Landscape briefs Internet of Things [IRENA

d] and Artiﬁcial Intelligence and big data

[IRENAe])

The PP trading platform can work eciently

withthehelpofdistributedledgertechnologies

ofwhichthemostprominenttypeisblockchain

Blockchain technology can help reduce

the transaction costs for electricity trading

among prosumers in a PP trading scheme

(seetheInnovationLandscapebriefBlockchain

[IRENAf])

For example the PP blockchain developer LO

Energy operates the Brooklyn Microgrid which

augments the traditional energy grid letting

participants tap into community resources to

generatestoreconsume(iebuyandsell)energy

atthelocaldistributionlevelAnotherexampleof

PP trading using blockchain technology is the

PowerLedgerplatforminAustraliawhichrecords

the generation and consumption of all peers in

real time The PP project piloted in Malaysia is

builtonthePowerLedgerplatformwhichisalso

running trials in Australia Japan Thailand and

theUnitedStates(US)(LedgerInsights)

Conduciveregulatoryframework

To reap the beneﬁts of PP electricity trading

regulators would need to ensure a level playing

ﬁeld for platform-based businesses vis-à-

vis traditional utilities and retailers in one

major development in this area the European

CommissiondeﬁnedfortheﬁrsttimePPtrading

ofrenewableenergyinEUDirectiveof

 December onthe promotionof theuse

of energy from renewable sources (part of the

so-called Clean Energy Package of legislation)

In the Directive PP is deﬁned as “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”

(EC)Thedirectivemustbetransposedinto

nationallawbyallEUmembercountries

TheEuropeanCommissiondeﬁnedfurthercriteria

indicatingthatrenewableenergyconsumersshall

beentitledtoPPtradingwithoutbeingsubjectto

disproportionateornon-discriminatory(network)

charges fees levies taxes and procedures

including the case in which renewables self-

consumers are located in the same building

including multi-apartment blocks However a

distinction is to be made between “individual

renewables self-consumers” and “jointly acting

renewables self-consumers” (Art () of

Directive(EU))

MoreoverintheUSPPtradingispossibleonly

through microgrids without using the main grid

infrastructure (ARENA ) Despite isolated

microgridexperimentssuchastheonerunningon

anLOEnergyblockchaininBrooklynNewYork

notmanyPPprojectshavebeenimplementedin

thecountrygiventhelimitationsintheregulatory

framework(Deign)

PEER-TO-PEER ELECTRICITY TRADING

P2P trading

platform

Country

Details

BrooklynMicrogrid UnitedStates Brooklyn Microgrid is a community energy market within a

microgrid. Under the platform, members can buy and sell energy

from each other with smart contracts based on blockchain

(Mengelkamp et al., 2018).

Centricaplc UnitedKingdom Centrica is a pilot project to develop a local energy market in

Cornwall, UK by testing the use of flexible demand, generation,

and storage, and rewarding consumers for being more flexible

with their energy. The participants use the latest digital

technologies to connect to a virtual marketplace that will allow

them to sell their flexible energy capacity to both the grid and

the wholesale energy market. Centrica is trialling the use of

blockchain for this platform, using LO3’s blockchain-powered

energy trading platform (Centrica, 2018).

Lumenaza Germany Lumenaza’s“utility-in-a-box”energyplatformenablesPPenergy

sharingandcommunitiesonalocalregionalandnationallevel

Thesoftwareconnectsproducersofelectricitywithconsumers

controlsdemandandsupply(egbyloadingbatteries)and

includesbalancegroupmanagementaggregationbillingand

visualisationofenergyﬂowsItallowsenergycommunitiesto

participateinelectricitymarketdesign(Lumenaza)

Piclo UnitedKingdom Piclo by Open Utility (a platform) and Good Energy (a renewable

energy power company) matches consumers and prosumers based

on their preferences and locality, every 30 minutes. Customers are

provided with consumption data visualisations, and generators are

provided with control and visibility over who buys power from them.

Good Energy balances the peaks and valleys in generation, provides

contracts and meter data, and does the billing (Piclo, 2019).

IV. CURRENT STATUS AND

EXAMPLES OF ONGOING

INITIATIVES

everal companies have set out to test and

start commercialising PP electricity trading

in recent years Some innovators focus on the

creationoftheplatformswhileotherstargetlocal

ICTsystemsformini-grids

Pilot schemes have started in many developed

and developing countries including Australia

Bangladesh Colombia European countries

Japan Malaysia the United States and others

Table  provides a brief overview of some of

theseprojects

Table1 Key facts about EaaS business model development

INNOVATION LANDSCAPE BRIEF

P2P trading

platform

Country

Details

SOLshare Bangladesh SOLshareinstallssmall-scalemini-gridsthatconnectlocal

consumersandallowthemtoshareelectricitywithinthelocality

Consumerswhohaveasolarpanelinstalledontheirhomes

cansupplysurpluspowertootherswhodonothaveaccessto

electricityByprovidingamini-gridaconsistentpowernetwork

isavailableacrossthelocality(UNFCCC)

sonnenCommunity Germany sonnenCommunityallowssharingofself-producedrenewable

powerbyindividualconsumerswhoareusingsonnen’sbatteries

Thissurplusenergyisnotfedintothegridbutintoavirtual

energypoolthatsuppliesenergytoothercommunitymembers

duringtimeswhentheycannotproduceTheelectricityprice

isﬁxedataroundUSDcentskwh(EURcentskWh)The

monthlyusagefeefortheplatformisEUR(sonnen)

TransactiveEnergy

Initiative

Colombia

ThepilotprojectactivitiesincludethedevelopmentofaPP

tradingapptheelaborationofpolicyrecommendationsfor

Colombianpolicymakersandaroadmapforcommercial

scale-up(UCL)

Vandebron Netherlands

TheVandebronplatformallowsconsumerstobuypower

directlyfromprosumersatthepricesetbyprosumers

Itbehavesasanenergysupplierthatconnectsconsumers

prosumersandgeneratorsandbalancesthewholesalemarkets

Italsoprovidesupplierswithgenerationforecastinginformation

fortheirassetsThemonthlyusagefeeoftheplatformis

USD(Vandebron)

PEER-TO-PEER ELECTRICITY TRADING

TECHNICAL

REQUIREMENTS

Hardware

• PhysicallayerSmartmetersthatcanhelpmonitorreal-timepowerproduction

andsmartgridsincludingmini-micro-ornanogrids

• VirtuallayerICTnetworktoenablecommunicationbetweenparticipants

handlepaymentsmonitoringandEMS

Software

• PlatformforPPelectricitytrading

• Advancedpowerdemandandsupplyforecastinganalysis

• Robustdataanalyticstool

• AlgorithmsforautomatedexecutionofPPtransactionsorblockchaintechnology

forreducedtransactioncosts

Communicationprotocol

• Commoninteroperableprotocolforco-ordinationamongsystemnetworkmarketplatform

operatorsconsumersandprosumers

POLICIES

NEEDED

• Supportivepoliciesencouragingdecentralisationofpowersystemsandbetter

utilisationofexistinggridinfrastructure

• Encouragepilotprogrammestoworkasatestbedinregulatorysandboxes

anddisseminationofresults

• Improvetheaccesstocapitalforplatformdevelopers

REGULATORY

REQUIREMENTS

Retailmarket

• Enabletradeofpoweramongprosumersandconsumerswithoutrenewablegenerationcapacities

• Establishregulationsondatacollectionandaccessaswellascybersecurityandprivacyforplatform

ownersdevelopersandplatformmembersiepeers

• DeﬁneclearrolesandresponsibilitiesofstakeholdersinvolvedinPP

• EnsurethatconsumerrightsarerespectedbystakeholdersinPPschemes

• DeﬁnemarketoperationrulesforthePPschemes

Distributionnetwork

• EnabledistributionsystemoperatortoprocureﬂexibilityfromPPplatforms

• Deﬁnetechnicalcriteriaforancillaryservicesneeded

• DeterminenetworkchargeswhenPPtradingisusingthemaingrid

STAKEHOLDER

ROLESAND

RESPONSIBILITIES

Consumersprosumers

• EngageinPPelectricitytrading

• Provideservicestothepowersystemeitherindividuallyorviaretaileroraggregator

PPplatformmarketoperators

• DevelopandoperateplatformsforPPtradingwithICTcompanies

• Ensurethattheplatformissecureandtrusted

V. IMPLEMENTATION

REQUIREMENTS: CHECKLIST

INNOVATION LANDSCAPE BRIEF

ABBREVIATIONS

AUD Australiandollar

EMS energymanagementsystem

EU EuropeanUnion

EUR Euro

EV electricvehicle

ICT informationandcommunications

technology

IRENA InternationalRenewable

EnergyAgency

IT informationtechnology

PP peer-to-peer

TNB TenagaNasionalBerhad

UK UnitedKingdom

US UnitedStates

USD UnitedStatesdollar

VPP virtualpowerplant

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UNFCCC()“MESOLsharePeer-to-peer

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PEER-TO-PEER

ELECTRICITY TRADING

INNOVATION LANDSCAPE BRIEF

IRENA HEADQUARTERS

P.O. Box 236, Abu Dhabi

United Arab Emirates

www.irena.org

ENERGY AS A SERVICE

INNOVATION LANDSCAPE BRIEF

Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed

and/or stored, provided that appropriate acknowledgement is given of IRENA as the source and copyright

holder. Material in this publication that is attributed to third parties may be subject to separate terms of use

and restrictions, and appropriate permissions from these third parties may need to be secured before any use

of such material.

ISBN 978-92-9260-175-1

Citation: IRENA (2020), Innovation landscape brief: Energy as a Service,

International Renewable Energy Agency, Abu Dhabi.

ABOUT IRENA

The International Renewable Energy Agency (IRENA) is an intergovernmental organisation that supports

countries in their transition to a sustainable energy future and serves as the principal platform for

international co-operation, a centre of excellence, and a repository of policy, technology, resource and

financial knowledge on renewable energy. IRENA promotes the widespread adoption and sustainable

use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and

wind energy in the pursuit of sustainable development, energy access, energy security and low-carbon

economic growth and prosperity. www.irena.org

ACKNOWLEDGEMENTS

This report was prepared by the Innovation team at IRENA’s Innovation and Technology Centre (IITC) with text authored by

Arina Anisie and Francisco Boshell, with additional contributions and support from Harsh Kanani and Anusha Rajagopalan

(KPMG India).

Valuable review was provided by Ina Lehto (Finnish Energy), Jaideep Sandhu (Engie), Michael Muurmans (Eneco) along

with Nina Litman-Roventa, Elena Ocenic, Martina Lyons and Paul Komor (IRENA).