Trends in local electricity market design: Regulatory barriers and the role of grid tariffs

The addition of local prosumers through solar and other small-scale variable renewable energy sources (VRES) have established a new set of energy producers, which are generally unable to efficiently participate in wholesale electricity markets. This has led to a rethinking of electricity markets and the emergence of local electricity markets (LEMs) (commonly referred to as peer-to-peer (P2P) trading). These markets allow small-scale producers to participate in a market, selling excess electricity to their neighbor, instead of the local utility paying them a fixed or time-of-use (TOU) grid tariff rate. However, the regulatory framework around these markets is developing or non-existent in many countries. Use cases in Austria, Norway, and Ireland are being examined in detail as part of the BEYOND project, where pilot projects are underway. This paper reviews and analyzes the state of the market and grid tariff designs with regard to LEMs application of P2P trading. It focuses on the following points:

  • Local electricity markets applying peer-to-peer trading: Investigation of existing concepts and how it is possible to implement them into the existing wholesale electricity market.
  • Regulatory frameworks: Comparison of regulatory frameworks for peer-to-peer trading in Europe, and possible implementation differences of local electricity markets.
  • Grid tariff design: Definition and examination of innovative grid tariffs that can help to promote peer-to-peer trading, for which the implementation can be tested in demo-sites.

Please read the paper to learn more.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.