New transactions in electricity : peer-to-peer and peer-to-x
19 November 2021
Economics of energy & environmental policy, 2021, Vol. 10, No. 2, pp. 41-55
Peer-to-peer and peer-to-x open a new world of transactions in the electricity sector. This world is characterised by the active involvement of new players, both small in size and non-professional in nature, and by new combinations of the activities carried out behind and in front of the meter. Peer-to-peer refers to transactions in which both the seller and the buyer are small in size and non-professional, whereas peer-to-x refers to transactions where only the seller is small and non-professional while the buyer is a different type of actor. Observations from the world of practice reveal the existence of multiple forms of peer-to-peer and peer-to-x transactions. The first part of the paper identifies six typical forms of transactions and illustrates them with concrete implementation cases. The second part simplifies such diversity of types and distinguishes only four families of transactions. The third shows the importance of three components which are essential to the functioning of this new world. They are the matching loop, as small players can-not sell or buy from other peers so easily; the pricing mechanism, as existing wholesale and retail markets exert pressure on incentives for activating peers; and the delivery loop, as peers must deliver via existing grids and system operators, except when trading entirely within private networks.
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