Evaluation of Economic Merits of Peer to Peer Electricity Transactions

Abstract

Enforcement of feed-in tariff (FIT) program has increased the installation of photovoltaic generations into the residential sector in Japan. After the expiration of FIT program, surplus electricity from individual prosumer would be purchased by the utility company at a lower price, which may give negative impacts on the prosumers' economic. In order to avoid such impacts, peer to peer (P2P) electricity transactions among prosumers based on the blockchain and the smart contract technology and introduction of residence-use stationary storage battery are attracting great attentions. In this paper, the potential economical merits of P2P transactions and residential storage battery introduction are evaluated. The potential economic merit is evaluated by means of a total optimization approach. For more practical perspective, this paper also evaluates the economic merits based on the partial optimization approach, in which individual prosumer pursues its own profit. Comparison of merits estimated by the total and partial optimization approaches reveals that the realization of P2P transaction could bring attractive economic merit to the participants.