Market platforms for local energy trading, including peer-to-peer trading, are currently being developed and tested. The platforms are limited to a single region or community, typically defined by grid limitations. They enable increased local production and consumption and relieve transmission and distribution grids, particularly during peak time, thereby limiting congestions. The key projects considered here are EM-POWER and Cornwall. Another aspect is the trading of flexibility which can be conducted between participants within a local energy trading platform. The key projects covering this issue are INTERRFACE and COORDINET.
Local energy markets improve adequacy and prevent congestion through incentivising self-consumption, using local flexibility from production, generation and storage. At the core is an ICT market platform organising the energy cooperative, which enables peer-to-peer trading, operating in addition to existing electricity, wholesale and balancing markets. Local battery storage and instalment of smart home appliances in-creases the available local flexibility. Economic incentives are provided, either through rebated prices for local consumption or subsidised prices for local production. As such, demand is incentivised to adjust to the situation when there is surplus prosumer or renewable generation locally.
Components & enablers
The most important enablers for local energy markets are:
- A well-functioning ICT solution (marketplace)
- Machine learning prediction of production and consumption down to a 15-minute level
- Removing regulatory barriers
- Energy data from DSO/smart metering
- A unified research approach
- Efficient battery technology
- Prosumer acceptance
- Blockchain, which facilitates the transparency of the transactions and enhances the system’ trustworthiness
State of the art in application and research
In EMPOWER, economic benefits for peer-to-peer trading were provided through the community, whereby external agents (e. g. providers of PV panels or smart- home appliances) took a commercial interest in the investments of the community. This illustrated an economic feasibility of energy communities. Adequacy is provided through local self-consumption within the area, increased generation and storage. Local energy markets typically organised within one distribution area, and congestion management is therefore improved when relying less on the central grid.
EMPOWER pilots in Hvaler, Norway, showed that load reduction can be offered to the DSO and thus contribute to congestion management. In the German pilot, the load shifting potential in households was greater than that of public buildings.
EMPOWER built Norway’s first pilot microgrid in Hvaler. The area produced 171 MWh / year from solar and wind. Includes storage. Residential homes (consumers and prosumers), municipal recycling facility, storage units. EMPOWER showed both the technical and economic feasibility of energy communities and local trading.
SENSIBLE tested how installing storage units in buildings and communities can be controlled to increase local consumption in a pilot in Nottingham, UK.
PEBBLE’s goal is to design, develop and operate a blockchain-based platform for local energy trading (using a peer-to-peer or ‘P2P’ model) and to integrate grid usefulness into the market mechanism in regional ‘energy-supply areas’.
INTERRFACE will develop and operate a market framework for distributed flexibility exchange between key stakeholders, to develop technical procedures to manage grid and system limitations via the aggregated control of consumption and generation.
Enervalis is developing a proof of concept, compatible with blockchain, in a real-life local market setting, to demonstrate a Layered Energy System (LES), which is a community market-based model.
The CoordiNet pilot in Sweden is developing a P2P trading supported with Blockchain technology in order to facilitate customer engagement and reduce transaction costs.
Technology Readiness Level
EMPOWER has conducted three pilots (Malta, Norway and Germany) and commercialised part of the concept. Centrica is currently undertaking a pilot in Cornwall, UK. Several other project pilots have been completed or are ongoing. INTERRFACE will test a prototype for the TSO–DSO flexibility market with blockchain based, smart contract and smart billing. CoordiNet is going to demonstrate in WP4 the peer-to-peer energy trading through blockchain technology.
Current focus of R&D and research gaps
INVADE builds on research results from EMPOWER. INVADE investigates aggregation through a flexibility operator, providing ancillary services to BRPs and DSOs. INVADE also has a wider range of participants (i. e. EV chargers, commercial).
P2P-SmarTest simulated how connected areas can participate in voltage control in a medium-voltage distribution grid.
The INTERRFACE demo consists of a 3-phase approach to enhancing a prototype for flexibility market with blockchain-based, smart contract and smart billing, as follows: (a) development of a custom prototype where basic use cases can be simulated and where market players are invited to test, (b) evolution to a Minimal Viable Product (MVP), capturing the fundamental functions and architecture of the platform and (c) initiation of a continuous growth cycle by checking the use cases of the different players (prosumers, TSO and DSO), the transparency in data and control and by validating the correctness of transactions (in the market / procurement process) and the transaction capacity, automatic level and speeds of market / procurement process. Sub-tasks include setting-up technical requirements and flexibility market arrangements for the test case; enhancing a prototype for the flexibility market with blockchain based, including proof of concept; and demonstrating TSO–DSO procurement for flexibility.
The CoordiNet project demonstrates how TSO–DSOs can act in a coordinated manner to procure grid services in the most reliable and efficient manner. Innovative grid services such as demand response, storage and small-scale (RES) generation are considered in this project. In addition, the blockchain maturity for peer-to-peer energy trading is being investigated and further developed in a Swedish pilot site.
PEBBLES focuses on a) developing a local trading platform which encompasses market mechanism, market and network optimisation, and decentralised architecture, b) developing business models for the future of the energy market on a local level, c) developing a Smart Contract Library for energy applications, d) pinpointing potential savings in the operation of supply grids by actively identifying prosumer behavior and e) analysing the technical and regulatory aspects of the demonstrator within the distribution grid area.
ENERVALIS, with the RENNOVATES project, aims to decrease the total energy consumption of homes by more than 60%, although there are currently insufficient statistical data available to draw definitive conclusions. In addition, the solar panels will generate approximately 4 to 7 MWh per year. Consequently, the houses will effectively meet the zero-on-the-meter scenario, which is one of the primary objects of the project.
Research is also focused on both aggregation and allowing the DSO, and sometimes the TSO, to procure ancillary services (frequency response, voltage control) from local flexibility. This is still at the research stage and is currently considered covered by the flexibility market platforms solution.
Cornwall: In Cornwall (south-west England) a local energy market pilot is currently being tested. The local energy market trial tests an ICT-based market platform which involves both local pricing and flexibility provision through explicit incentives for a DSO. In the virtual market-place, the DSO places bids onto the market place and participants (households and private firms) make offers to buy and sell energy or flexibility. Participants receive a payment for their response. End-to-end solution. A 2.5 MW ‘smart’ solar farm.
 NETfficcient [Link]
- EMPOWER. (2019). Retrieved from EMPOWER website [Link]
- Hirdes, D. e. (2018). Final project report. EMPOWER.
- Bray, R., & Woodman, B. (2018). Unlocking Local Energy Markets. Exeter: University of Exeter.
- Bray, R., Woodman, B., & Connor, P. (2018). Policy and Regulatory Barriers to Local Energy Markets in Great Britain. Exeter: University of Exeter.
- Centrica. (2019). Cornwall Local Energy Market. Retrieved from Centrica [Link]
 Dominoes [Link]
 SENSIBLE (Nottingham pilot) [Link]
 Nobel grid [Link]
 Skagerak Energilab [Link]
 INTERRFACE [Link]
 PEBBLES [Link]
 COORDINET [Link]