Demand responseProject AGL Virtual Trial of Peer-to-Peer Energy Trading
Report: Peer-to-Peer Distributed Ledger Technology Assessment (PDF 3MB)
AGL’s comprehensive project assessment report about virtual peer-to-peer energy trading using distributed ledger technology.
Consumers are becoming increasingly active participants in the Australian energy market, exerting greater control over their energy supply arrangements than ever before. Testament to this is that Australia has the highest proportion of ‘Prosumers’ in the world with over 1.6 million PV installations, a combined capacity of over 5.7GW and a monthly output of approximately 600GWh1. To realise the full potential of distributed energy resources (DER), including solar PV, smart inverters, energy storage, electric vehicles and controllable loads, it is proposed that market(s) be established for available energy where its value can be measured, communicated and transacted in the most efficient way possible.
Several innovative approaches are being trialled around the world to satisfy the strong interest of prosumers and consumers in distributed energy.
Peer-to-peer (P2P) trading is one such approach which allows grid-connected parties – in this study, households, to trade electricity. This is most likely to either occur directly, i.e. between two market participants who form a short-term contract, or indirectly between two participants who remain anonymous to one another and trade across a secure, auditable marketplace.
Residential P2P energy trading would involve large numbers of transactions between prosumers and consumers, requiring methods for low-cost authentication, validation, and settlement, while protecting consumer data privacy. One emerging approach to sharing transaction data between market participants is using distributed ledger technology (DLT). Incumbent and start-up entities in many global markets are testing new P2P business models, some underpinned by such DLT (or blockchain) applications. However, there are relatively few studies to date that have assessed the viability of DLT for P2P energy trading, particularly in Australia.
The project participants have a keen interest in exploring the potential for innovative technologies to enable a P2P market which responds to consumer expectations for a more personalised energy experience, assists customers in gaining greater control over their energy supply and derives more value for customers out of their distributed energy investments.
The project’s hypothesis was “that operational data from an existing residential market deployment of DER can be used to gain a deeper understanding of the value of P2P trading for customers, the applicability of distributed ledger technology to a P2P market place and the impacts that this new market might have on existing markets and market actors.”
In this vein, Stage 1 of this project sought to use historical consumption and production data to gain a deeper understanding of the potential value of P2P trading for customers and market participants, while Stage 2 reviewed the applicability of distributed ledger technology to the P2P market place considered for Stage 1. This report concludes with a summary of both Stages and observations on the impact on customers, role of markets, space for technology and need for effective, forward thinking policy and regulation.