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Prospects for peer to peer energy trading in the UK solar industry

Trading sunlight

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About this report

Solar Trade AssociationThe Solar Trade Association promotes the benefits of solar energy, aiming to make its adoption easy and profitable for domestic and commercial users. The association is entirely funded by members, including installers, manufacturers, distributors, large-scale developers, investors and law firms.

This report should be referenced as:

Gall, N., & Stanley, G. (Eds). 2019. Trading sunlight: prospects for peer to peer energy trading in the UK solar industry. Solar Trading Association: London, UK.

Copyright © 2019. The material in the sections of this report are the copyright of the authors of the respective sections, all rights reserved. The authors grant Solar Trade Association permission to use their material free of charge.

ISBN 978-1-5272-5273-8

AcknowledgementsPart of the production of this report was funded by the Engineering and Physical Sciences Research Council through the Impact Acceleration Account Award (EP/R511742/1).

Cover photo courtesy of Forster Group.

www.solar-trade.org.uk

@thesolartrade

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Contents

About the authors 4

1 Introduction: The UK solar industry landscape 7

2 How can P2P energy trading platforms be designed to 9 create value for both prosumers and system operators?

Helen Gavin and Thomas Morstyn, University of Oxford

3 What is distributed ledger technology? 15Mesbah Khan, Government Blockchain Association

4 An estimate of the potential financial benefit of P2P 19 energy trading for solar households

Eoghan McKenna and Ellen Webborn, UCL

Case Study: Powering a London social housing 22 community with sunshine

Becky Haworth, Verv

5 Social considerations of P2P trading applications for 25 solar and storage

Michael Fell, UCL

6 Digital ledger technology at the grid scale 27Nicholas Gall, Solar Trade Association and Jon Ferris, Electron Ltd.

7 Legislative and regulatory context 29Alexandra Schneiders, University College London

8 Conclusions 33

References 34

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About the authors

Michael Fell is a senior research fellow at UCL Energy Institute, whose research focuses on social aspects of energy system transitions. He works on peer-to-peer energy trading and local energy systems as part of two projects: the Centre for Research into Energy Demand Solutions, and the Energy Revolution Research Consortium.

Jon Ferris has spent his career in energy making the industry function better for consumers, helping them take control of the risks resulting from their need for energy. Starting in 2005, Jon developed trading and reporting systems, and automated market information and data services to support large businesses manage their exposure to the energy markets, building up a trading desk managing 12 TWh of wholesale power and gas. He has also supported new entrants to bring competition to markets, and developed innovative retail products that facilitate market access for smaller companies. Jon has been recognised as an influencer by Siemens, as a keynote speaker, panellist and moderator at energy and blockchain events, and as a frequent commentator in the media.

Helen Gavin is a sustainability professional, passionate about renewable energy and water resources. Following a PhD in 2001, Helen became a Chartered Environmental Scientist and has experience in quantitative environmental issues, spanning water and energy in both academia and industry. She works on the Programme on Integrating Renewable Energy at the University of Oxford.

Rebecca Haworth is the Head of Communications for London-based energy tech start-up, Verv. With a strong background in technology PR and a passion for renewable energy and tackling climate change, she has achieved wide-spread media coverage across mainstream and industry press, becoming a driving force for combating the climate crisis through innovation. Rebecca has brought Verv’s cutting-edge P2P energy trading platform and AI technology to life and recently won the Communications Focus Award at the 2019 Young Energy Professionals awards.

Mesbah Khan is an enterprise data architect and ontologist working for the past 16 years in the upstream energy industry. His research area is foundational ontologies for semantic interoperability in decentralised systems. He developed an interest in DLT and blockchain platforms in 2016 and undertook various research projects to explore how DLTs could be used as decentralised data platforms for the energy, media rights and financial industries. He is a member of the Government Blockchain Association and a committee member on ISO 307, Blockchain and Distributed Ledger Technologies. He is undertaking doctoral research at the University of Westminster on the ontology of money and central bank digital currencies.

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Eoghan McKenna is a Senior Research Associate in Data Science and End Use Energy Demand at the Energy Institute, University College London (UCL). Eoghan works on the Smart Energy Research Lab (SERL) project, a 5-year £6 M EPSRC-funded research project to provide access to smart meter data for the UK research community.

Thomas Morstyn is a research fellow with the Department of Engineering Science at the University of Oxford. He was awarded an EPSRC-UKRI Innovation Fellowship, ‘A Networked Market Platform for Electric Vehicle Smart Charging’, and he is a co-investigator on the EPSRC project ‘EnergyREV – Market Design for Scaling Up Clean Local Energy Systems’. He received the B.E. (Hon.) degree from the University of Melbourne in 2011, and the PhD degree from the University of New South Wales in 2016, both in electrical engineering. Before undertaking his PhD, he spent two years working in Rio Tinto’s Technology and Innovation Group. His research interests include multi-agent control and market design for integrating distributed energy resources into power systems.

Alexandra Schneiders is a Research Associate at the UCL Energy Institute. Her research focuses on the policy and regulatory aspects of P2P energy trading. Before joining UCL she worked as a policy and legal consultant for energy sector clients and the European Commission in Brussels. As of September 2019, Alexandra is the Operating Agent of the new Global Observatory on P2P, Community Self-Consumption and Transactive Energy Models, an Annex of the User-Centred Energy Systems Technology Collaboration Programme by the International Energy Agency (IEA). The Observatory will study P2P energy trading / transactive energy and community self-consumption pilots across the world for three years, and welcomes all stakeholders in the field to become involved in its work.

Ellen Webborn is a Research Associate at the UCL Energy Institute on the Smart Energy Research Lab (SERL) project. She has previously worked at National Grid, and received a PhD in Mathematics and Complexity Science from the University of Warwick in 2018. Her research interests include domestic energy consumption, smart grids, demand response and data science.

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1 Introduction: The UK solar industry landscape

The rise of solar PV in Britain over the past decade is a remarkable success story, with the industry growing from less than 100 MW installed capacity in 2010 to more than 13,200 MW in 2019. Over the past 12 months, solar PV has contributed 4% of Britain’s total electricity generation (surpassing coal, at 3.5%), in the process preventing almost 2.7 million tonnes of CO2-equivalent emissions from entering the atmosphere.

Today, solar is on the verge of a new subsidy-free era, in which technological innovation, network flexibility, asset optimisation and new revenue streams will be more important than ever before.

The increasing prevalence of variable renewable generation in the UK presents both challenges and opportunities. The necessity of the grid to become smarter and more flexible to adapt to this new era has led to the emergence of new and innovative business models, including deployment of energy storage to provide frequency response to the grid, virtual power plants, and the use of flexibility to relieve grid constraints in lieu of costly new infrastructure. Among the most exciting new technologies to enable the smart, flexible energy system transition are distributed ledger technologies (DLT) and Peer to Peer (P2P) trading.

1.1 The GB energy system and policy context

In June 2019, the UK became the first major economy to adopt a legally-binding Net Zero greenhouse gas emissions reduction commitment. The role of energy systems remains fundamental to these ambitions. The electrification of transport and heat pose significant challenges to the future management of the grid, energy demand and supply – renewables will undoubtedly have a further role in achieving this transformation. This is just one of the key dynamics shaping the current

market and policy context for the energy system transition:

• Despite severe delays and implementation challenges, the ongoing rollout of Smart Meters to every GB energy customer will transform the energy market landscape, with more data available than ever before, facilitating improved system-wide understanding and efficiencies.

• The closure of the Feed-in Tariff (FiT), which ran from 2010 to 2019, marks a new era for the self-consumption model of solar PV. The FiT enabled the deployment of more than 900,000 rooftop solar PV systems on homes and businesses, drove significant cost reductions, and encouraged a nascent small-scale battery storage market to develop alongside. Now optimising self-consumption of on-site generation has become paramount.

• In response to the extraordinary rise of distributed energy resources (DERs) on the GB network, Ofgem is currently undertaking a significant and wide-ranging program of network regulation reform. These reforms could open up new opportunities for flexibility and innovative new grid connection options, but the mooted introduction of fixed rather than usage-based network charges could reduce the economic incentive for investing in on-site generation and flexibility.

• Renewables have also driven network operators to become more active. Due to the prevalence of variable generation on the grid, Britain’s distribution network operators (DNOs) are transitioning to becoming ‘system operators’ with a more active role in balancing and procuring flexibility to enable more efficient utilisation of the grid’s infrastructure.

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All of this is taking place against a backdrop of incredible technological advancements in areas such as Artificial Intelligence, the Internet of Things, “smart” capabilities within households and businesses, and P2P and DLT technology more broadly. These advancements have fundamentally altered the relationship customers have with their homes and their energy use.

Many questions remain regarding P2P’s relevance to the energy sector. Drawing on a variety of case studies and the original research of leading academics in this space, this report aims to provide an open-minded overview of both current and future applications of the technology, and to investigate some of the potential challenges and opportunities that they could represent.

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2 How can P2P energy trading platforms

be designed to create value for both

prosumers and system operators?

Helen Gavin and Thomas Morstyn, University of Oxford

A critical challenge facing us is: how best to incentivise coordination between vast numbers of distributed energy resources, each with different owners and characteristics, for mutual benefit? We explore how adopting peer to peer (P2P) trading platforms can help coordination and integrate these resources into power system operations and markets, offering transparency, autonomy and scalability.

2.1 IntroductionPower networks face an energy trilemma: the challenge of transitioning to zero-carbon emissions generation while continuing to provide universal and secure access to affordable energy.

Two trends have emerged however that present opportunities to address this challenge. The first is the emergence of ‘prosumers’ i.e. proactive consumers with distributed energy resources (DERs) such as domestic PV and home batteries, actively managing their consumption, production and storage of energy. The second trend is the development of smart consumer-level communications and control such as smart meters and energy management systems.

Another recent phenomenon is the rise of the ‘sharing economy’, which involves P2P interactions between individuals, without a third party, to give access to goods and services. These P2P interactions (rather than business to business, or business to customer) are facilitated by a trading platform which allows small suppliers to compete with traditional providers of goods and services, for example Airbnb, and Uber.

2.2 Challenging the electricity market set-up

A central feature of our liberalised electricity market in the UK is the wholesale market, which allows large centralised generators to fulfil the demand of large industrial consumers and retail suppliers. The wholesale market is overseen by the Transmission System Operator (National Grid ESO) which is responsible for managing aggregate balancing and transmission constraints.

Small-scale consumers (e.g. domestic customers) are not integrated directly into wholesale electricity markets. Instead, they contract retail suppliers to obtain energy on their behalf. This set-up assumes that small-scale consumers have limited flexibility, and the cost and complexity of integrating them into the wholesale market is not justified.

Distribution network operators (DNOs) manage the medium- and low-voltage network, and have traditionally focused on planning and reinforcement, assuming no active system operation role.

These arrangements are now being challenged by (1) the connection of DERs to the distribution network, (2) the rise of prosumers with flexible energy resources including electric vehicles, home battery systems and heat-pumps and (3) smart meters and customer-facing energy management tools and systems.

These developments allow previously ‘passive’ consumers to become more active and flexible prosumers, and highlight that DNOs need to actively manage distribution network power flows by becoming distribution system operators (DSOs), to integrate DERs more efficiently and effectively.

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2.3 Coordination into Virtual Power Plants

Small-scale prosumers currently enter individual retail supply contracts that meter their electricity usage, limiting the potential value of their energy resources. As a result, prosumers are incentivised to maximise the use of their own self-generated energy. However, coordinating prosumers, and managing DERs together, would give rise to significant advantages, such as:

• increased network efficiency

• the ability to match supply and demand on a local level, which could alleviate the need for investments in generation and transmission infrastructure, and could reduce transmission losses

• better management of local power flow and voltage constraints

• accelerated progress to low-cost electrification of heat and transport, which are key steps towards decarbonisation and achieving Net Zero by 2050

• reduced pollution

Grouping prosumers and local DERs in this way is termed a “Virtual Power Plant” (VPP). Existing VPP coordination strategies require a top-down design and implementation by a single entity, which defines the terms of VPP operation. This means that while the interconnected units are independently owned, they are operated via the VPP central controller which trades energy on behalf of the DER owners to the wholesale electricity market. This direct control coordination strategy treats DERs as controllable units, in which the total generating and flexible capacity can be operated like a traditional generator in the wholesale market.

2.4 The role of peer to peer energy trading

Such direct coordination strategies may work against the preference of prosumers for autonomy and control, or the desire to manage their resources according to risk, environmental or equity concerns. Adopting an indirect coordination strategy, which sends incentives to influence the consumption and generation decisions of prosumers (e.g. time of use prices), may not deliver good performance however, as a VPP controller may not be able to predict prosumer behaviour. Further, the type of organisation best placed to implement VPPs may not be incentivised to arrange such indirect approaches as it may conflict with existing operating models.

Given that it is individual prosumers that have the greatest incentive to realise the full potential value of their DERs, P2P energy trading offers a mechanism for coordination between prosumers who are willing to provide some flexibility, but reluctant to give total control to the central intermediary of a VPP.

An important component for P2P energy trading is to provide a mechanism that allows prosumers to negotiate mutually beneficial transactions. Market designs for P2P energy trading fit within a broader group of prosumer-centric energy market designs, which may however rely on some degree of centralised communication and control, rather than being strictly based on P2P negotiation and autonomous decision making.

Figure 1 displays four different business models where P2P can be used for energy trading (Morstyn et al. 2018). They vary in terms of whether they target the distribution or transmission network scale, and whether the value created is focused on prosumers or system operators (either transmission or distribution). The models are:

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• Behind-the-meter trading• Local flexibility• Multi-class energy trading• Federated Power Plant formation

The characteristics of each of these models are set out in Table 1.

The P2P energy trading platforms can be seen as a value architecture, consisting of value partners (prosumers, suppliers, system operators), firm resources (software, data, subscriber relationships) and a coordination mechanism (the P2P market mechanism).

Revenue models from other P2P market platforms can be applied to P2P energy trading platforms, including subscription and transaction fees, advertising, selling data products and sponsorship by an external beneficiary.

A key consideration of the P2P platform is the need to attract different types of subscribers to enable cross-network effects and allow system benefits to be shared between participants. For example, system operators wishing to obtain flexibility from small-scale prosumers will be attracted to P2P platforms with high numbers of prosumers offering flexibility. Therefore, a P2P platform owner will be incentivised to make the platform attractive to prosumers by subsidising their participation, potentially recovering costs from the system operators.

2.5 ConclusionIt is clear that coordinating prosumer DERs into VPPs is key to realising the latter’s value to power systems. P2P energy trading gives opportunities for prosumers to self-organise into coalitions that can provide grid services, and numerous benefits. Different P2P energy trading models are possible, varying in terms of the product being transacted, the physical scale and the value offered to the participants.

A number of pilot schemes and demonstrator projects are underway across the world. For example, the UK Government has announced the Prospering from the Energy Revolution Challenge, which is funding smart local energy system demonstrators which will deploy the latest innovations, including Local Energy Oxfordshire (LEO), Superhub Oxford, and ReFLEX Orkney. These projects are expected to generate a range of digital energy trading platforms operating in parallel at different physical and temporal scales. The demonstrators are supported by the Energy Revolution Research Consortium (EnergyREV), which is investigating new mechanisms for coordination between platforms, pricing externalities, and managing uncertainty while also addressing distributional fairness. EnergyREV will also explore integration with system-level markets for capacity, energy and balancing services.

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Behind-the-meter trading Local flexibility

Multi-class energy trading Federated power plant formation

Grid energySubsidised energy

Green energy

Wholesalemarket

Systemoperators

Suppliers &generators

Trading coalitions

SupplierSupplier

Constraints

Distributionsystemoperator

Energy transaction

Potential transaction

Value focused on prosumers Value focused on system operators

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Figure 1: Four different business models that can be supported by P2P energy trading.

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Table 1: Four different business models that can be supported by P2P energy trading

Model Description

Behind-the-meter trading

Groups of prosumers are charged according to their combined net energy demand, rather than their individually metered demand. The prosumers are incentivised to sell excess generation to other prosumers with flexible loads and storage systems, rather than export it to the wholesale market through their supplier. P2P provides a negotiation mechanism to arrange these transactions. The participating prosumers benefit through lower energy costs and increased utilisation of their energy resources. System benefits include reduced losses and pollution, due to increased local consumption of renewable energy.

Local flexibility A single supplier managing energy import / export can organise a local P2P energy market, and buy / sell energy subject to a supply constraint. Local generation and storage are more valuable in situations with constraints on net energy imports, for example networks with thermal and voltage limits, and islanded microgrids where supply must match demand to maintain stability. Using local resources can alleviate the need for investments in network reinforcement, which will result in lower network charges. Sharing flexible resources can improve security of supply.

Multi-class energy trading

P2P trading allows prosumers to express preferences for different energy “classes” beyond purely financial considerations. For example, environmentally-conscious prosumers can buy renewable energy, while “philanthropic” prosumers may wish to supply subsidised energy to low-income households.

Federated Power Plant A key advantage of this model is that prosumers retain control over their energy resources and can define the transactions in which they are willing to take part. The P2P platform would align the interests, preferences and requirements of electricity consumers, prosumers and power system operators. By incentivising coordination between potentially vast numbers of future prosumers, Federated Power Plants have great potential to reduce energy costs, increase reliability and reduce pollution.

By cooperatively coordinating their distributed energy resources and developing trading coalitions, prosumers could provide frequency regulation and reserve services to help the Transmission System Operator manage aggregate power system balancing. They could also provide value to Distribution System Operators by helping to manage local thermal and voltage constraints. In addition, prosumer groups with complementary resources could share risk and trade energy directly in the wholesale market, or enter into bilateral contracts with large suppliers and generators.

The lack of a minimum size requirement means there are relatively few barriers to market entry, and allows for the gradual building of trust and experience. This could have a system-wide benefit by increasing competition for the provision of prosumer coordination services. As new subscribers join and the platform grows, it would become possible for a Federated Power Plant to operate at the scale of a traditional Virtual Power Plant.

Source: Morstyn, T., McCulloch, M. D. (In Press)

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3 What is distributed ledger technology?

Mesbah Khan, Government Blockchain Association

3.1 What is distributed ledger technology?

Distributed ledger technology (DLT) is a decentralised system for handling transactions over a network of distributed entities or nodes (such as individuals or organisation involved in a particular transaction).

The traditional bookkeeping system for transactions is where each party maintains its own transaction records. For example, everyone has access to their own financial transactions through their online bank account but cannot see anyone else’s. A bank is the only organisation able to see all transactions for its customers, and so acts as the secure, centralised body for processing those transactions.

A distributed ledger is a bookkeeping system that is shared amongst all the parties involved in the particular transaction, so all the nodes maintain information on every transaction occurring in the network. Maintaining a shared ledger, that can be relied on by parties who do not know each other, requires a system for protecting its contents from changes over time – this is called immutability. A distributed ledger also needs some mechanism for deciding access control and permissions for who can change the system.

3.2 What types exist? Most of the components of distributed ledger technology have been available for a while. For example, ”hashing”, which is one element used for cryptography for information security, digital signatures and message-integrity verification, has been used since the 1950s. The first successful implementation of a distributed ledger system however was the peer-validated decentralised cryptocurrency called Bitcoin, which uses a specific kind of distributed ledger called Blockchain.

Blockchains are distributed ledgers where enhanced information security protections are delivered by storing and processing data in a serially linked chain of cryptographically secured blocks to prevent tampering. Blockchains can securely store digital transactions without using a central point of authority. Instead of managing the ledger through a single trusted centre, each individual network member holds a copy of the records’ chain and reaches an agreement on the valid state of the ledger with consensus. The exact methodology through which consensus is reached is an ongoing area of research and differs to suit the wide range of application domains.

New transactions are linked to previous transactions, which makes Blockchain networks resilient and secure. Every network user can check for themselves if transactions are valid, which provides transparency and trustable, tamper-proof records.

Hundreds of Blockchain-based and alternative distributed ledger platforms have emerged, with early applications primarily in finance and payment processing, later expanding to other domains such as healthcare, media and gaming.

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The ‘blocks’ are comprised of a set of data or transactions, a timestamp and a link to the previous block. In a Blockchain the link to previous blocks is built by generating a cryptographic code called a hash. This hash is built from the data contents of the previous block, which also contains the hash code of its predecessor. The hash is algorithmically computed and the hash code of the most recent block is unique for the entire history of the Blockchain. If any historic block’s data is altered, this inconsistency can be detected in the hash code of the most recent block. This mechanism provides a way of protecting the contents of the prior blocks from any change, also known as immutability.

Because the Blockchain is distributed in a P2P network, every node needs to come to an agreement on validity. The network participants send transactions, which need to be accepted into a new block. The Blockchain is then governed by a consensus algorithm that dictates which block is valid, and that everyone has the same blocks. The most commonly known is the ‘Proof of Work’ algorithm. Blockchains allow for the automated execution of smart contracts in P2P networks. Smart contracts are bits of code that can be executed by participants in the network to perform transactions based on a given set of conditions or rules.

The above takes substantial computational power, and so for the network to be sustained in a decentralised manner there needs to be an incentivisation mechanism that pays off the nodes for providing this power. There are various mechanisms that can provide this incentivisation. One way of achieving it is to introduce a transaction payment to a member of the network who would process the transaction by verifying its authenticity, e.g. by running the cryptographic algorithm to verify if the block hash codes are consistent.

Using these features, Blockchain is designed to achieve trust among anonymous counterparties in a decentralised system of transactions without the need of central supervisory authorities in charge of verifying the correctness of the records in the ledger.

3.3 How are they being used currently?

Since the Bitcoin inception in 2009, many DLT software architectures have been deployed to meet different technical, business and legal design options. Blockchain technology is primarily known from cryptocurrency applications. While opinions on the long-term future of cryptocurrencies may be divided, several key applications have been identified by numerous sources.

According to the UK Government’s report on distributed ledger technology (Walport, 2015) Blockchains might ‘reform our financial markets, supply chains, consumer and business-to-business services, and publicly-held registers’. A broad range of use cases have been explored in the industry, such as systems for tracking ownership of assets (hard and intangible), facilitating transactions in the banking sector, supply chain traceability and provenance management and identity management. Blockchains have been compared to the advent of the Internet, and as a technological breakthrough that could introduce innovative business models (Tapscott Don, 2016).

3.4 How do they link to energy?Future energy systems’ requirements are based on three key principles: decarbonisation, decentralisation and digitalisation, with a shift to empower consumers being a key aspect of both EU and UK policy (Brilliantova & Thurner, 2018).

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Early prototypes of Blockchain and DLT-driven platforms for P2P energy trading are emerging. These are being developed using Internet of Things (IoT) applications for local energy marketplaces based on the vision of the smart grid (Brilliantova & Thurner, 2018). In the current climate in the energy industry, where firms are seeing a reduction of margins driven by higher energy costs and lower revenues, and the increased regulatory pressure for transparency, any technology that can improve profitability and support regulatory compliance is highly attractive for both policy makers and firms. The report by the Competition and Markets Authority (CMA, 2016) states that electricity consumers paid £1.4 billion on average a year in excessive prices between 2012-15 due to poorly designed tariffs and lack of mobility in the marketplace.

According to Deloitte, blockchain-enabled transactional digital platforms may reduce operational cost, increase efficiency, and support faster automated processes, transparency and capital requirements reduction for energy firms. These benefits could also extend to energy consumers who are facing increasing energy prices and prosumers who are seeing reduced benefits from generation as renewable energy source incentives are removed (Brilliantova & Thurner, 2018). Solutions for P2P trading in local or consumer-centric marketplaces could potentially lead to cost savings for energy consumers and better margins for prosumers (Brilliantova & Thurner, 2018).

Over the last few years, several use cases have emerged that deploy blockchain and DLT-based solutions. Current pilots in P2P trading, microgrids, e-mobility and EV-charging are in early stages of maturity (Laclau, 2018). These smart contracts can be set to allow prosumers to feed surplus energy into the grid through a blockchain-enabled meter. The flow of electricity is automatically coded into the blockchain, and algorithms match buyers and sellers in real time based on preferences. Smart contracts then execute when electricity is delivered, triggering payment from buyer to seller. Removing financial transactions and the execution of contractual commitments from central control brings a level of decentralisation and transparency that the industry has never had before.

Micro-generation promises to greatly contribute to the energy balance of the energy grid. However so far, its market penetration is arguably slowed by the few or non-existent direct economic benefits prosumers would enjoy by deploying an in-house micro-generation system for grid balancing purposes.

In addition to the examples in this report some successful implementations that hint at the future of blockchain/DLT-based energy solutions include an Ethereum-based energy trading platform that was used in 2016 by residents of Brooklyn, New York (PwC global power & utilities, 2016), and similar pilot projects in Australia (Laclau, 2018).

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4 An estimate of the potential financial

benefit of P2P energy trading for solar

households

Eoghan McKenna & Ellen Webborn, UCL

The basic idea of P2P energy trading is that households with solar panels can sell their surplus solar electricity to their neighbours or peers, rather than to an energy retailer, as currently happens with a feed-in tariff.

Based on analysis of empirical data from a recent smart grid demonstration project, the Customer Led Network Revolution, we can say that a typical household with solar panels in the UK exports about 1,625 kWh per year, or about 63% of what they generate (McKenna et al. 2018).

Energy retailers pay less per unit for surplus domestic solar power exported to the grid than they charge for consumers importing electricity from the grid. The feed-in tariff export rate currently stands at 5.38 p/kWh (Ofgem, 2019), while the average retail electricity import price in the UK is 15.15 p/kWh taking 2018 as a reference year (BEIS, 2019a). This price difference means that P2P energy trading can benefit both sides of the trade. Solar households can get a better price for their surplus solar power, while the peers they trade with can benefit from lower electricity prices.

Multiplying the price difference by the typical surplus power value above gives a total possible value of P2P energy trading. Assuming this is split equally between buyer and seller, P2P trading could add about £79 per year to the bottom line for a typical household with solar panels in GB.

This is not insignificant. Under the former feed-in tariff, a typical solar installation installed in the first quarter of 2019 could expect to receive a benefit of £98 per year from generation payments, £146 per year from reduced imports from the grid, and £87 per year from export payments; £332 per year in total (see calculations below). With the closure of the feed-in tariff, new installations will not receive any income from generation, and potentially lower export payments under its replacement, the Smart Export Guarantee. With P2P trading, the income from exports could increase to around £167 per year. This could considerably offset the reduction in income caused by the end of the feed-in tariff.

Based on these numbers, P2P energy trading could offer a new source of income that could be an important driver for the adoption of solar panels in the post feed-in tariff era.

We are, however, still a long way from being certain about these financial benefits. The estimates given above are indicative only and there are many factors that could cause them to go up or down. Some of the key factors that require further research and development include the following:

Costs. We have not factored any costs into the above. The hardware, software, operation, and administrative requirements of P2P energy trading are yet to be determined, and therefore may significantly reduce the net benefit left over for solar households.

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Household variation. We have given estimates based on a ‘typical’ solar household that exports 63% of what they generate. We know, however, that there is considerable variation in the amount that solar households export, depending on the size of the solar installation and how much electricity is used during the day (McKenna et al. 2019). For example, a significant proportion of solar households achieve export rates well below 40%. As the benefit of P2P energy trading depends directly on the amount exported we can say that households that export more could achieve greater benefits, while the opposite is true for those that export less.

A fair deal. The 50/50 split of benefits assumed above does not necessarily have to be the case. There is some evidence to show that consumers prefer and are willing to pay a premium for electricity from renewable local sources (Kalkbrenner et al. 2017; Sagebiel et al. 2014), so we can imagine scenarios in which solar households could claim a greater share (or even all) of the benefits. Conversely, solar households could forgo their share of the benefits to help further reduce their peers’ electricity bills, in which case P2P energy trading could become a mechanism to help solar power reduce fuel poverty.

Ability to trade. We have assumed that all exports can be traded, however this may not always be possible. Existing P2P energy trading schemes tend to restrict trading groups to households that are in close proximity to each other. Solar panel installations are known to cluster geographically (Snape, 2016). Where households with solar panels are trading with other households with solar panels, the potential to trade is reduced, because it is likely that many households will be exporting at the same time. This clustering effect could reduce the benefit of P2P energy trading if membership of trading groups is geographically constrained. However, households with storage batteries could offset the time when they export their surplus power to avoid this situation.

Electricity prices. Retail electricity prices are expected to rise in future, and while some companies have published export price offerings under the Smart Export Guarantee, it is likely that export prices will be lower than they were under the feed-in tariff. If this does happen, it will increase the price difference between import and export prices and increase the value of P2P energy trading for solar households.

4.1 Future research needsP2P trading has the potential to significantly increase the value of domestic solar PV to the owner and (depending on the pricing structure) to the wider community. Further research is needed to investigate the practicalities of establishing P2P trading groups, such as the hardware and software requirements including efficient trading algorithms, possible business models, and potential risks and benefits to investors and participants. More work is needed to understand the effects of establishing P2P trading on the domestic battery market (and vice versa).

P2P technology can enable grid balancing at the distribution level as households can be incentivised/rewarded for exporting or self-consuming their solar generation according to the needs of the grid. Research is needed to explore potential conflicts of interest between traders and the distribution network owner. There are also implications for local balancing if traders want to join a P2P group from outside of a local area.

4.2 A closer look at the numbersThe average size of a domestic PV system in GB is 2.9kW (BEIS, 2019b) and the average load factor is 10.2% (BEIS, 2016). We use 2018 as the reference year for the average retail price of electricity (15.15p/kWh). The export rate for the average domestic PV system and typical household is 62.7% and the self-consumption rate is 37.3% (McKenna et al. 2018).

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For an average domestic PV system and typical household:

Generation = 2591.2 kWh per year Exports = 2591.2 * 62.7% = 1624.7 kWh per year Self-consumption = 2591.2 * 37.3% = 966.5 kWh per year

Benefits under the former feed-in tariff (Q1 2019):

Generation = 2591.2 kWh per year * 3.79 p/kWh = £98.21 per year Exports = 1624.7 kWh per year * 5.38 p/kWh = £87.41 per year Self-consumption = 966.5 kWh per year * 15.15 p/kWh = £146.42 per year Total = £332 per year

Benefits under P2P trading:

Generation = 2591.2 kWh per year * 0 p/kWh = £0 per year Exports = 1624.7 kWh per year * (15.15 + 5.38)/2 p/kWh = £166.78 per year (this is £79.37 more than in the feed-in tariff scenario above) Self-consumption = 966.5 kWh per year * 15.15 p/kWh = £146.42 per year Total = £313 per year

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Verv has created a green electricity sharing platform that enables households with solar panels to sell the excess energy that they generate directly to their neighbours. This improves access to cheaper, green energy and provides an improved return for solar panel owners, thus incentivising uptake.

The platform is based on Verv’s home hub device that samples energy data much faster than a smart meter, unlocking unique insights with artificial intelligence. This includes a real-time breakdown of energy use and cost per appliance. With advanced profiling of home demand, along with predictions of solar generation, the Verv hub can automate the trading of energy for households at the best economic value for both parties. Blockchain serves as the auditing system for the P2P network. It potentially offers a safe and efficient means of digitally tracking and authenticating transactions, and lower transaction costs due to there being no

intermediary. With no single point of failure, there are additional security benefits too.

In 2017, Verv set out to power a social housing community with sunshine using its energy trading platform. The target community was an estate in Hackney that had solar panels installed on 14 blocks of flats. The solar panels were installed in 2015 by Repowering, a London-based social enterprise set up to facilitate community-owned energy, with the support of Hackney Council and local energy advocacy group Hackney Energy. The electricity generated by the solar panels was being used to power the community area, lifts and lights. However, using its energy trading platform, Verv set out to unlock the solar energy to help power residents’ homes as well.

Case Study: Powering a London social housing community with sunshine

Becky Haworth, Verv

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Verv smart hubs were installed in 40 participating flats in the trial and in April 2018, Verv conducted the UK’s first P2P trade of energy on blockchain technology. The first trade saw 1 kWh of energy being sent from an array of solar panels with excess energy on the roof of one block to a resident in another block within the estate.

The trial is part of UK regulator Ofgem’s sandbox which offers regulatory flexibility in order to explore new and disruptive technologies. Verv also received a government grant from Innovate UK to bring this technology to life, following an initial grant to stimulate the technology.

Along with Repowering, Verv wants to drive down residents’ bills. This is particularly poignant given many residents are on pre-pay meters. Green community energy is also an impactful way to cut carbon emissions and, with the climate crisis on our hands, the world is crying out for enabling technology that can make a difference.

The initial pilot results indicated that residents could save over 20% on their electricity bills, and carbon emissions could be driven down by even more than that. If these findings are

scaled up into multiple communities, the outcome could be powerful in the fight to tackle climate change. This technology has the potential to impact social, economic and environmental realms.

Centrica will be joining phase two of the trial that focuses on testing different billing methods, to ensure that customers receive clear and fair bills when taking part in a network where energy is coming from multiple sources. In this case, it will analyse how much electricity is being consumed through the grid, and how much from the solar panels. Then it will look to change the content of residents’ bills to achieve more transparency in energy generation and fairer billing.

UK regulation is currently acting as a barrier to entry for full-scale commercial application. However, progress is being made with Verv working with Ofgem to inform regulation via the sandbox pilot. In addition, Verv supported New Anglia Energy in raising the P379 Elexon modification. The modification enables consumers to buy and sell electricity from/to multiple providers through Meter Splitting. The outcome of this will be very significant for the future of P2P energy trading.

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5 Social considerations of P2P trading applications for solar and storage

Michael Fell, UCL

P2P energy trading could provide attractive consumer (and prosumer) benefits. The individual bill-income benefits are highlighted elsewhere in this report, and there may also be wider advantages such as improved power reliability, support for local community projects, and local jobs. But there may also be downsides, such as consumer protection challenges (in the absence of a single responsible supplier) as well as possible negative impacts on those who, for whatever reason, cannot participate. This chapter sets out the main issues that are being discussed.

5.1 The upsidesParticipants in the Brooklyn Microgrid P2P trading project have talked about the attraction of having reliable locally-generated power in an otherwise unreliable section of the grid, as well as the environmental benefits and selling directly to neighbours. Belinda Kinkead, one of the directors of LO3 Energy (the company which operates the Brooklyn Microgrid), has spoken of the “social cachet” of “locally generated green electrons”, while also highlighting the drive to keep money within the community, supporting “local people and local jobs” (DNV-GL, 2017).

The community energy group Repowering are involved in P2P trading trials in social housing apartment blocks in south and east London, as highlighted previously. They see the schemes being tested in these buildings as a cost-saving opportunity for people who wouldn’t otherwise be able to benefit from local PV generation (i.e. tenants without access to their own roof space).

Community energy proponents more broadly view the P2P model with interest as it could provide income streams in a world beyond renewable subsidies. This is money they suggest

could be invested in other local community benefits such as retrofit schemes to help tackle fuel poverty and reduce health impacts related to cold homes. It could also generally support a sense of community cohesion and direct involvement in local schemes.

These attractions are compelling, although evidence is still needed to show whether, in what circumstances and for whom the benefits can be realised. And of course, there are also potential downsides to P2P energy trading.

5.2 Consumer challengesSome of these apply to households and businesses who are able, and choose, to participate in P2P schemes. Under the current regulatory regime in Great Britain, energy suppliers are responsible for a raft of consumer protection measures. These include direct involvement in issues such as complaint handling and providing clear information to consumers about product and service offerings. Suppliers also contribute to the costs of support infrastructure such as the ombudsman, and reimbursing customers when other suppliers go bust. In a pure P2P trading environment where household and businesses potentially have relationships with multiple and ever-changing suppliers, it is not clear where all these responsibilities would lie.

It would also be wrong to assume that allowing households to trade directly with each other would necessarily lead to positive outcomes such as improved community cohesion. Neighbour disputes are a tabloid staple, and it is not hard to imagine disagreements arising or being exacerbated over who gets to participate in a community trading scheme, or the prices which different parties charge each other.

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5.3 Societal issuesPerhaps thornier social challenges emerge when you consider that not everyone is likely to be able to participate in P2P energy trading. Many will not be able to take part as ‘suppliers’, as they do not have access to distributed energy resources such as solar panels, and may not have the money or space to install them. This also applies for energy use and storage technologies such as batteries and smart appliances, which can help alter demand/supply patterns to maximise savings or income.

Even putting aside these issues of access to technology, many people may simply not have access to a P2P scheme in which to participate, either because there isn’t one in their local area or because they lack other characteristics (e.g. possession of a battery) that may act as qualifiers to participate. The distribution of local trading schemes is likely to be highly uneven and affected by factors such as population density, local political will, affluence and climate.

What might be the implications of this uneven access? Firstly, if you accept that participating in P2P trading could lead to bill savings or

increased income from generation, then non-participants will be excluded from these benefits. Worse, however, would be if certain approaches to P2P trading allow participants to avoid contributing to the cost of running networks and environmental levies. Since there are certain fixed costs involved in network operation, a larger portion of these costs would need to be borne by people who are unable to avoid them through P2P trading. And, as pointed out above, these may be people such as renters and those on low incomes who can least afford bill increases.

There are vexed questions of fairness here, as many argue that there should be a stronger relationship between the burden that users impose on the network and the costs they bear – why should someone who only relies on the wider grid only now and then pay as much as someone who depends on it all the time? These are issues that the regulator Ofgem has been working through in ongoing reviews of network charging. Whatever the outcome of these exercises, it is clear that the while P2P trading offers the potential for a variety of social benefits, achieving them in a fair way will not be straightforward.

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6 Digital ledger technology at the grid scale

Nicholas Gall, Solar Trade Association and Jon Ferris, Electron Ltd.

This report has so far focused on the opportunities DLT and P2P can offer smaller-scale solar and storage owners, due to the prevalence of these types of pilots in the UK. However, these technologies unlock significant opportunities at a whole-system level as well, for more efficient network operation and new revenue streams for providers of grid balancing services.

Outdated UK network systems designed for large, centralised thermal and nuclear generation have struggled to adapt to the remarkable rise of distributed generation, and of variable renewable generation (wind and solar PV). In the days of centralised generation, there were comparatively simple contractual relationships between a small number of generators, network operators and suppliers. Today, with millions of prosumers across the energy system, these relationships are infinite.

DLT presents an exciting opportunity to address some of the challenges presented by the transition to smaller-scale, distributed renewable generation at a whole-system level. Here we discuss three emerging use cases for DLT to enhance the network integration and usage of solar and storage technology: generation/storage asset registration and visibility, procurement of network flexibility services, and network curtailment risk management.

Firstly, at the most basic level, the sheer number of generation assets on the network has grown exponentially. The UK solar PV industry was established over the past decade under two different support mechanisms – the Feed-in Tariff (FiT), for systems below 5 MW and primarily for rooftop solar, and the Renewable Obligation (RO), primarily for ground-mounted systems of 5 MW or more. Accreditation under

these schemes enabled completely accurate and up-to-date tracking of how much capacity was deployed and where on the grid. But with the RO closing to new entrants in 2017, and the drastic cut in FiT payments culminating in the complete closure of the scheme in March 2019, the UK is on the verge of an uncharted world of subsidy-free distributed renewable energy resources (DERs), the majority of which could be effectively invisible to system operators at an individual level.

Working alongside the Energy Networks Association’s Open Networks Project framework, London-based start-up Electron are trialling a blockchain-based generation asset registry that enables DER information to be brought together from multiple sources in real time while allowing each data owner to retain control and ownership of their data. It will both improve the process for sharing existing data, reduce the costs of reconciliation and provide incentives for private data to be made accessible.

The increasing proportion of variable renewable generation on the grid also necessitates far greater system flexibility from both demand and generation users. By opening up flexibility procurement to as many prospective providers as possible, network operators will be able to ensure the best possible value for consumers through greater transparency and price competition.

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TenneT TSO GmbH, one of Germany’s four transmission network operators, has just concluded a successful pilot project with residential-scale battery manufacturer sonnen to demonstrate how interconnected home storage systems can help to manage variability in renewable generation output. The batteries are digitally linked and collectively integrated into the transmission network via blockchain. The linked batteries continuously communicated with the transmission network operator exactly how much charging capacity was available, effectively in real time: If TenneT accepted one of these automatically generated offers, the sonnen batteries were charged with surplus energy in a region where, for instance, there was too much wind energy. To maintain equilibrium, other sonnen batteries simultaneously discharged the same amount of energy in a region where it was actually required. Each individual stored or generated kWh was documented in IBM’s Hyperledger blockchain with a unique cryptographic signature.

In South Korea, Electron has launched a new, digitalised energy platform, able to include smaller DERs alongside larger incumbents. The Electron flexibility trading platform applies blockchain technology to enable coordinated grid optimisation at distribution and transmission with both levels retaining authority over markets that they operate. It can also integrate P2P trading into the coordination mechanism. The pilot project is a joint venture with the Korean demand response solution provider Grid Wiz, and is due to conclude in May 2020.

Thirdly, DLT can enable more effective management of the curtailment of renewable generation, by opening up new options for what effectively amounts to the trading of network outages over the blockchain. More so than any other generation technology, Britain’s large-scale solar PV generation capacity is exposed to a high degree of risk from network outages in terms of potentially foregone generation. For example, an outage due to network maintenance or emergency repairs lasting a day or more during the height of summer is highly damaging to a solar asset owner’s revenues, but an outage of a month or more can be devastating to project economics.

The opportunity to securely trade outage options using an open DLT platform provides a market-based alternative to current approaches to curtailment management, opening the market to firm connections and demand side management to address local issues. Following the trade of capacity market obligations on Electron’s platform, it is hoped that the next market to go live will enable trading of network capacity to minimise the cost of resolving constraints.

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7 Legislative and regulatory context

Alexandra Schneiders, University College London

This chapter explores what may be preventing the implementation of DLT and P2P technologies from a regulation perspective, with reference to other European countries. It presents the Ofgem sandbox approach that is currently being used and assesses how this could be mainstreamed.

Energy consumers receive their energy from parties that are licensed by Ofgem according to the Electricity Act 1989. License holders are required to comply with the industry codes underpinning the UK energy industry. These define the terms under which access to the electricity network is granted and the conditions for taking part in the electricity market. An example of a such an industry code is the Balancing and Settlement Code (BSC), which regulates the energy balancing and settlement scheme and is controlled by Elexon. Small energy producers, such as residential households producing their own renewable

1 Electricity (Class Exemptions from the Requirement for a Licence) Order 2001.

energy, can be exempted under the Electricity Act 1989 from acquiring a licence for the generation, transmission, distribution and supply of electricity.1 Limits apply, such as the supply of no more than 2.5 MW of self-produced energy by domestic premises (Ofgem, 2017)

P2P energy trading is not foreseen under UK legislation. P2P trading pilots using blockchain are currently taking place within the energy regulator’s (Ofgem) regulatory sandbox, “Innovation Link”. The parties participating in pilots, which must hold a licence to distribute or supply energy or (if not licensed) should partner up with licence holders, can only obtain derogations from codes and rules controlled by Ofgem, within a regulatory ‘sandbox’. These include rules on licensing and consumer welfare. Pilots can run for a maximum of two years, with a limited number of consumers involved and results being reported back to Ofgem (Ofgem, 2018).

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Recently, Elexon, the body in charge of the balancing and settlement of energy rolled out its own regulatory sandbox, that will operate under the Ofgem sandbox process. Parties are only able to derogate from rules in the BSC. Crucially, parties are given extra time on top of the pilot running time to ask for a modification of the rule they were exempted from, so that they can roll out their project at a wide scale after the pilot phase.2 This is different from the Ofgem process, which does not grant parties additional time to ask for legal modifications. Two years, which is the time given by Ofgem for pilots to run, might be too short to change the regulation in time for the end of the pilot. This causes uncertainty for parties running the trial and participating consumers on the continuity of the project. Furthermore, the fact that only specific types of rules can be derogated from in the regulatory sandboxes means that other applicable legislation for P2P energy trading using blockchain has no chance of being reviewed or derogated from. This includes law around consumer protection (in light of profits made from energy trading), the validity of smart contracts used for energy trading, taxes and fees paid by traders, and data privacy rights such as the “right to be forgotten” (since data on the blockchain is immutable).

The launch of additional sandboxes covering non-Ofgem controlled rules, such as the Elexon “sandbox”, is therefore a positive development.

Other European countries such as the Netherlands and France are also in the process of rolling out their own energy regulatory sandboxes. However, countries such as France have already drafted legislation aimed at making P2P energy trading within a community setting possible (i.e. community self-consumption). This approach has been met by scepticism, as French law (even after recent amendments to make it less strict) contains strict conditions such as that trading can only take place within a very small perimeter, at a low voltage, and within a legal entity such as a community energy legal group.

2 See: www.elexon.co.uk/mod-proposal/p362/ (last accessed on 2 October 2019).

Pilots have consequently experienced trouble becoming viable without financial help from the government (UCL & Sorbonne, 2018). Spain also recently passed a law containing similar conditions for community self-consumption (PV Magazine, 2019). The downside of these laws is that they have been drafted without testing P2P trading using blockchain technology, something that is possible in a sandbox. In any case, these countries will be required to recognise the right to P2P energy trading, due to the recent enforcing of the revised EU Renewable Energy Directive, which explicitly enshrines this right (EU, 2018). It remains to be seen whether the UK will also transpose such a right into its energy laws.

Aside from launching regulatory sandboxes, energy code administrators in the UK have been openly thinking about the governance aspects of new business models such as P2P energy trading, e.g. the creation of new actors. Today’s energy system operates according to the ‘supplier hub’ model, where one consumer gets energy from one supplier. This clashes with the P2P trading model, where consumers can get electricity from several suppliers, such as a combination of their main supplier and neighbours with solar panels. In its White Paper ‘Enabling customers to buy power from multiple providers’, Elexon proposes a way for consumers to be able to buy and sell electricity to and from multiple parties (Elexon, 2018). In Elexon’s model, the retail supplier would continue to be responsible for data collection and, metering, as well as data aggregation under the BSC.

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However, a new actor called the Central Notification Agent (CNA), likely represented by commercial facilitators of P2P schemes, would accede to the BSC and notify BSC Central Services of P2P trades when they take place, including the two ‘Metering Systems’ involved in the trade as well as the ‘Half Hourly’ volume traded. BSC Central Services then verifies this information and passes it on to the retail supplier as well as CNA. The information on volume of energy traded will help adjust the fees passed on to consumers, such as Transmission Use of System (TUoS), Electricity Market Reform (EMR) and Distribution Use of System (DUoS) charges. It should be noted that Elexon cannot require retail suppliers to take part in this system, since consumer billing is not part of the BSC remit. Furthermore, platform users need to have a supplier licence or be exempt from holding one, as well as the ability to be settled half-hourly. The latter is not compulsory for domestic premises in the UK.3

Future research should focus on how to test and reform rules and legislation other than that controlled by Ofgem and Elexon, such as the law around consumer rights. Since consumers participating in P2P would make profits from the trading of energy, it is important to clarify their

3 See: www.elexon.co.uk/change/releases/p272-mandatory-half-hourly-settlement-profile-classes-5-8/ (last accessed on 2 October 2019).

rights as ‘prosumers’. Another issue of relevance is smart contracts, which could be programmed by peers trading energy on the blockchain. It should be ensured that such a contract is viewed as valid in the eyes of the law. Not only is legal recognition of a smart contract’s validity important, but also the fact that a blockchain-enabled contract is immutable and cannot be undone. This means that faulty transactions cannot be reversed, and third-party input would be necessary to remedy a dispute. Research is also needed on how smart contracts might be devised so that their computer code can be understood by legal arbiters.

In summary, policy and regulatory developments in the UK around P2P energy trading are positive when compared to other European countries. This is thanks to the rollout of regulatory sandboxes by Ofgem and Elexon, which enable evidence-based policymaking when it comes to these novel business models. There are also encouraging signs from energy code administrators such as Elexon, that are thinking out loud about how governance aspects of P2P energy trading models, such as the creation of new actors, would work.

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8 Conclusions

As this report has highlighted, there are a number of important topics and mechanisms that need further exploration before P2P energy trading can be developed as a robust system, such as negotiating conflicting flexibility requirements between prosumers and system operators, and managing uncertainty, losses and transmission constraints, which have traditionally required aggregation and centralised coordination. A much greater understanding is needed of prosumer resources and preferences, to assist in identifying optimal DER combinations and coalitions so that benefits are fairly divided. Regulatory changes will be needed to allow for P2P energy trading, and to incentivise DSOs to facilitate DER adoption and VPP operation. Finally, the need for careful evaluation of P2P trading and VPP/FPP initiatives over a sustained period of time cannot be overstated, to allow for institutional learning and to understand their wider impact.

Access to data will be critical for implementation of P2P applications to solar and storage, and for energy sector innovation more broadly. As a “no-regrets” approach, we urge Government, Ofgem and key stakeholders including the network companies to move quickly in implementing the recommendations of the Energy Data Task Force, particularly with regard to enabling regulators to adopt a much more agile and risk reflective approach to regulation of the sector, by giving them access to more and better data. In the case of solar PV and storage, this will require moving away from the current subsidy-linked registry system to one based on access to flexibility markets and new value streams, including those enabled by P2P trading.

Agile regulation is also key. The “Regulatory Sandbox” is undeniably helpful in enabling innovative companies including those featured in this report to test new business models, but the question is what happens next. There are important considerations around equity and social impacts of a transition toward a far more decentralised energy marketplace. But by being overly cautious, regulators risk holding back innovations that could both save consumers money and enable faster decarbonisation. It is therefore vital that the exciting academic research and private sector innovation discussed in this report continue, and that regulators remain engaged in these projects.

With steady and significant cost decreases for both solar PV and battery storage (including electric vehicles) continuing year after year, the economics of these technologies will only improve, enabling more and more consumers to adopt them. The UK’s adoption of a legally binding 2050 Net Zero target presents an ideal opportunity to revisit the regulator’s mandate, and enable a more bold and proactive approach to energy system design and operation. Government and Ofgem should be actively encouraging flexibility, decentralisation and democratisation of the electricity market.

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About the STAOur work helps to create and expand UK markets in solar and storage. For 40 years we have promoted solar energy and worked to make its adoption easy and profitable for all users. As a not-for-profit we are funded by our membership which includes manufacturers, distributors, developers, asset owners, O&M providers, law firms, consultants, academics and innovators. Solar’s exceptional synergies with storage, EVs and smart grids mean we work on the frontline of technology and system change. Our incisive research, policy-development and lobbying shapes Government policy and regulation. In partnership with key players across the energy industry, the STA is working to secure the smart systems that solar and storage need to thrive.

Trading sunlight: prospects for peer to peer energy trading in the UK solar industry. ISBN 978-1-5272-5273-8

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