What is peer-to-peer (P2P) energy trading?
The concept of Peer-to-Peer (P2P) energy trading represents a transformative approach to energy markets, where individuals and businesses generate, share, and trade energy directly with one another. Traditionally, energy generation has been centralised, with large power plants distributing electricity to consumers via the grid. However, with the rise of small-scale renewable energy sources such as solar panels and home energy storage systems, consumers are now capable of producing their own energy, becoming “prosumers” who both consume and produce electricity.
In a P2P energy trading system, prosumers can sell their excess energy directly to other electricity consumers, their peers, without relying on a central utility. This system enables more efficient use of energy, greater energy autonomy for communities, increase of renewable energy usage and a reduction in energy losses from long-distance transmission. P2P energy trading also empowers individuals to take charge of their energy needs, fostering a more sustainable and resilient energy future.
Blockchain Technology: A must-have in P2P energy trading
Blockchain technology plays a pivotal role in facilitating the secure and transparent transactions that underpin P2P energy trading. One of the main challenges of P2P trading is the need for an efficient system to track, record, and verify energy exchanges between multiple parties in real time. Blockchain, with its decentralised ledger, provides an ideal solution for these needs.
By leveraging smart contracts – self-executing contracts with terms directly written into code – blockchain allows for automated and trustless energy transactions between peers. This ensures that energy trades are settled quickly, accurately, and transparently without requiring an intermediary.
Powerledger has been at the forefront of integrating blockchain technology into energy trading. The key platform we utilise for this purpose is Solana, a Gen3 blockchain known for its high throughput, low latency, and energy efficiency. Solana’s ability to process thousands of transactions per second at a fraction of the cost of older blockchain networks makes it particularly suited for handling the high-frequency, small-value transactions that are common in P2P energy trading markets.
Powerledger’s Projects in P2P Energy Trading
Powerledger has pioneered several projects worldwide that demonstrate the effectiveness of P2P energy trading and the role of blockchain in these markets, and even laid the foundation for groundbreaking regulatory changes in India. Some of the standout projects include:
- Smart Community with Energie Steiermark, Austria: The Smart Community by Austrian energy retailer Energie Steiermark highlights the success of commercial P2P implementations allowing hundreds of energy consumers and prosumers to exchange energy directly, whilst saving money on electricity expenses.
- Large-Scale Pilot with CESC in India: The pilot project with Indian DISCOM CESC was the largest P2P project to date with over 1,000 participants exchanging Rooftop Solar energy and replacing traditional incentive models.
- BCPG – T77 & O77, Thailand: Powerledger has enabled peer-to-peer (P2P) trading in the T77 precinct of Bangkok, Thailand, since 2018. Following the success of the initial project stages, BCPG expanded the T77 project to include additional buildings and solar assets. The project is recognised as Innovative Power Technology of the Year in 2019 and Best Clean Energy Community Solutions SouthEast Asia in 2022.
- “Choose your mix” project with ekWateur, France: The “Choose your mix” project enabled customers of French green energy retailer ekWateur to select and receive their preferred sources of energy – such as wind, solar or hydro – via our platform.
These projects have demonstrated how P2P energy trading platforms can empower communities, increase energy self-sufficiency, and lower energy costs by providing access to locally produced renewable energy.
Powerledger’s Research in P2P Energy Trading, Local Energy Markets, and Gen3 Blockchains
In addition to our groundbreaking projects, Powerledger has contributed significantly to academic research in P2P energy trading, local energy markets, and the use of Gen3 blockchains like Solana. Our research is focused on exploring the technological, economic, and social implications of decentralised energy markets, offering key insights into the future of energy trading.
Key topics we’ve explored in our research include:
- P2P energy trading models: Our studies delve into various P2P trading models and how they can be applied to different market structures. We explore the role of blockchain in ensuring security and efficiency, especially in distributed energy environments.
- Blockchain integration: We’ve researched how blockchain’s inherent transparency and security features can facilitate energy trading, reduce operational costs, and optimise grid management.
- Local energy markets: We focus on the dynamics of local energy markets and how they can complement traditional centralised markets, providing resilience in times of high demand or grid instability.
- Gen3 blockchain performance: Powerledger has also contributed to understanding the application of Gen3 blockchains like Solana in energy markets, particularly how their scalability, speed, and low energy consumption make them ideal for managing the high volume of transactions in P2P energy trading.
By publishing these research articles, Powerledger aims to drive forward the conversation on decentralised energy markets and blockchain integration, sharing insights with academics, industry players, and policymakers alike. Our research continues to shape the future of P2P energy trading, enabling more sustainable and efficient energy systems. A list of key research items published by the Powerledger team is provided below.
Singapore Local Energy Market Development Using Blockchain Enabled P2P Trading, 2023.
How Local Energy Markets Benefit Distribution Utilities, 2023.
P2P as a Smarter Way of Energy Trading: A Game Theoretic Case Study for Multi-microgrids, 2022.
A local energy market benefiting power grids and energy users: A P2P trading-based case study, 2022.
BESS-facilitated local energy market: A case study on typical Australian consumers, 2022.
How P2P Trading Helps an Electricity Retailer Exposed to Volatile Spot Prices: A Case Study, 2022.
