Abstract
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 this contribution illustrates those variants, by providing a sample of concrete implementation cases coming from liberalised electricity systems. The review shows the importance of three components that are essential to the functioning of this new world of transactions and which are discussed in the second part of the contribution. They are: a) the transaction loop, as small players cannot sell or buy from other peers so easily; b) the pricing mechanism, as existing wholesale and retail markets exert pressure on incentives for activating peers; and c) the delivery loop, as peers must deliver via existing grids and system operators, except when trading entirely within private networks.
Highlights
Peer-to-peer and peer-to-X open up a new world of transactions in the electricity sector
The many types of transactions suggest that three components are key to the functioning of this new world: a) the transaction loop, as so small players cannot sell or buy from other peers so ; b) the pricing mechanism, as existing B2B and B2C markets exert pressure on incentives for activating peers; and c) the delivery loop, as peers have to deliver via existing grids and system operators, except when they manage their own mini-grids
Peer-to-X transactions have already grown in real life and will continue to grow because electricity consumers realise, or will soon realise, that their own production, consumption and storage devices can be mobilised to trade on traditional electricity markets, or on new markets derived from them (Sioshansi, 2020a; Sioshansi, 2020b)
Summary
Peer-to-peer and peer-to-X open up a new world of transactions in the electricity sector. We have already seen business-to-business (B2B) with the wholesale markets opening around 1990 and business-to-consumer (B2C) with the retail markets opening around 2000 (Glachant et al, 2021) This third new world of electricity transactions has not yet been fully explored.. With new activities and new players involved we are facing a new world of electricity transactions This new world involves multiple variants because its two characteristic transactional features can address several objects (for example, energy, flexibility and storage) in different arrangements. This is investigated in more detail in the first part of this paper, in which we distinguish three forms of ‘peer-to-peer’ transactions and four forms of ‘peer-to-X’ transactions. The many types of transactions suggest that three components are key to the functioning of this new world: a) the transaction loop, as so small players cannot sell or buy from other peers so ; b) the pricing mechanism, as existing B2B and B2C markets exert pressure on incentives for activating peers; and c) the delivery loop, as peers have to deliver via existing grids and system operators, except when they manage their own mini-grids
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