Household-Supplier Energy Market

Project Details


Have you noticed that ever more wind turbines appear in the countryside? And more and more solar panels are installed on the houses on your route from work to home? All these are signs of the increasing uptake of micro-generation, whereby individuals or organisations install their own small-scale, renewables-based energy generators to produce and use energy. Presently, in the UK, they must sell the excess of their production back to the grid at a set price.

Perhaps you yourself have installed some PV panels and have to sell the excess of your energy production back to the grid at a set price? And perhaps you would much rather contribute your excess generation free of charge to the nearby homeless shelter instead? Or sell it to someone else at a better price?

Such free trade between micro-generators could become possible through a peer-to-peer (P2P) energy market. Similar 'sharing' platforms are already in place in other markets, e.g., via Airbnb in the hotel industry, or Uber in taxi hire (though both of these still impose substantial intermediation charges).

But what would such a market democratisation entail for the energy sector? Is the infrastructure for P2P energy trading technically feasible? Who would provide it? What will be the role of the current major power producers (like British Gas and EDF Energy) in such a market? Could supply continuity be ensured under the fluctuating generation imposed by the nature of these energy sources? What factors will encourage households/groups to join this market? What regulatory changes are necessary for this market to function? These are the questions that the HoSEM project sets out to address.

The key aim of this project is to research the feasibility of such democratised P2P energy market. To enable such a P2P energy market, this project will:

1. Develop a novel technical platform to support P2P household-level energy trading. Here all market participants must have read and write access to the records for the production, sale, and purchase of energy at low cost per transaction; each transaction must be accurately recorded, verifiable, and encryption-secured to guarantee accurate assignment of rights and responsibilities for trades and billing, allowing equal access to all interested participants. The distributed ledger technology uniquely meets all these domain requirements, providing an ideal technical tool for such a platform. The ledgers will also be available to 3rd party businesses that wish to provide new value added services for the energy market.

2. Establish a scientific basis for factors that would foster trust in households and organisations to participate in this market. Since prospective market participants will be acting as individuals or groups (e.g., likeminded "greens" or "profit seekers"), factors for both kinds of such participants will be researched. For instance, individuals may act upon trust in information and its sources, while a group member may follow what other members trust.

3. Research various possible configurations of such a P2P trading (e.g., where a few large groups are formed and influence the energy price, or each individual trades independently) along with algorithms for trade optimisation under each configuration (e.g., how to optimise own income and cut emissions as an individual, or minimising external energy dependency when trading as a community group).

4. Study the social, and economic implications of such a market: what will such a change imply for the current market participants, its impact on the energy supply chain, and how would this market affect everyday individual/community life?

The DLT-enabled P2P energy trading has a strong disruptive potential, which could enable new business models and processes in energy sector. This project will help the businesses, regulators, and households gain an understanding of this potential, and get ready to transition into and engage with this changing market.
Effective start/end date1/10/1731/03/20


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