https://www.sciencedirect.com/science/article/pii/S0959652622014159

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.

Local Electricity Markets (LEM) and peer-to-peer trading are new mechanisms to encourage the uptake of solar PV and to support the emergence of consumer-centric electricity markets. There is a lot of promise in this field, but they are not without their challenges. LEMs and P2P trading schemes can have scalability issues in terms of optimal allocation and market settlement calculations. Additionally, it can create power quality problems in the grid and therefore must be coordinated with local TSOs.

This paper, produced by BEYOND partner NTNU, proposes a new vision on how to address the above challenges and to study new opportunities in the formation of virtual LEMs. Under the hypothesis of large-scale adoption of LEM and P2P schemes, it assumes a scenario in which millions of prosumers and consumers already exist, ready to tap into LEM opportunities. This presents scalability issues on how to organize prosumers and consumers into LEMs.

This paper is centered on the following research questions:

● What is the value of creating dynamic virtual local electricity markets (via clustering)? How does a ‘virtual LEM’ incentivize P2P trade, flexibility, self-sufficiency and integration of RES?

● What is the impact of Electrical Vehicles’ flexibility on the creation of virtual LEMs? What benefits would this marketplace bring?

If you are interested in the paper’s findings, please read onward at: https://www.sciencedirect.com/science/article/pii/S0360544221016765?via%3Dihub

As penetration of variable renewable energy sources (VRES) continues to increase, more creative approaches must be taken to balance supply and demand than has been necessary in the past. One of these ideas is to create local energy communities (LECs) where households trade electricity with their neighbors directly, instead of buying and selling from the local utility (a process known as peer-to-peer trading, or P2P trading). Given its novel and still largely theoretical nature, the effects of such a community’s effect on the local low-voltage electricity networks are still largely unknown. A recent paper by BEYOND partners NTNU and SINTEF investigates this effect.

The study suggest that the creation of local markets reduces total electricity costs, improves self-consumption, and promotes more effective use of local distributed energy resources. These LECs are considered in two cases: one in which houses have solar PV panels installed, and one in which these houses also have batteries. The battery + PV case nearly doubles the amount of electricity traded in the community compared to the PV-only case.

The overall results show that establishing a P2P system for the PVs within the LEC reduced peak grid import and total system losses by 13.7% and 44.7% respectively, in addition to reducing the total amount of electricity procured from the wholesale market by 5%. The inclusion of batteries in these communities further reduces overall community costs, but has some adverse effects on voltage and peak grid consumption. This is due to the large amount of battery charging that takes place in the early morning when electricity prices are lowest. This is shown in the Figure below:

Uncontrolled battery charging leads to voltage drops and an increased peak consumption of 19.2% compared to the reference case. While the results of this case study are highly system dependent, it is a valuable contribution to the body of research surrounding this topic.

The paper can be viewed in full at: https://www.sciencedirect.com/science/article/pii/S0306261921008035

Last summer, two students participating in the Sustainable Energy Systems & Markets dual degree at NTNU/TU Berlin participated in a joint internship with NTNU and IOTA. IOTA is a not-for-profit distributed ledger technology (DLT) company that aims to support frictionless data and value transfer, with a use case specializing in Internet of Things (IoT). As opposed to other distributed ledgers, IOTA is not blockchain-based, but instead relies upon what is called a “Tangle.” Traditional blockchains use “miners” to provide what is called “Proof of Work” to perform computational work required to add a block to the chain (if you are not familiar with the concept of blockchain, this is a good place to start). In the Tangle, however, each transaction verifies two other transactions, removing the computationally intensive step of Proof of Work. This greatly reduces energy requirements, and makes an open, feeless, and scalable distributed ledger possible.

The goal of this internship was to research potential synergies between NTNU and IOTA. Towards this goal, the students compiled a “state-of-the-art” review of current energy trading platforms and other blockchain-related companies, simulated test cases in various localities based on availability of detailed demand data, and used test case results to provide useful KPIs for IOTA and Alpha Venturi, an IOTA-based IoT and Digital Economy company. The findings from this internship help lay the foundation for future use of DLT in peer-to-peer energy trading applications. 

A blog post from Markus Löschenbrand of BEYOND partner SINTEF details the changes in the power grid in recent decades, as well as potential solutions to the inherent added complexity of doing so.

Regulatory shifts in the 90s towards market liberalization shifted the responsibility of R&D, investment decisions, and operational planning from large state monopolies to smaller firms. Additionally, the transition away from carbon-intensive, centralized forms of thermal electricity generation to decentralized renewable electricity sources such as wind and solar has added additional complexity. Intermittent generation sources lead to a difficult matching and supply and demand, and requires active management of demand through demand-side management technologies, as well as new, potentially revolutionary ideas such as peer-to-peer electricity trading networks.

This idea represents one of the most fundamental concepts of the BEYOND Project: to provide a space to develop new ideas and methods for implementing them. Please read further at the link below:

Local electricity markets: Neighbourly help as a driver for sustainability

With the recent update on sensory and measurement equipment in households, communal buildings and small enterprises in the pilot region Großschönau, another important step has been taken towards starting data measurements for the project’s simulations. In this demo region, the project aims to demonstrate local market designs and also to provide insights on coupling energy carriers based on district heating. The main objective is to increase local electricity consumption by implementing a distance-dependent price scheme (more expensive for other substations). It is expected that this implementation helps to increase local RES consumption and gain insights into the interdependence of LEC grid tariffs.

This pilot region Großschönau is located in lower Austria in the region of Waldviertel. It consists of 13 villages and has a total population of 1200 inhabitants. This municipality represents a rural area in Central Europe, without connection to higher traffic infrastructure and without a significant amount of industrial activity. Most of the buildings in the municipality are residential buildings, small commercial units like farms, craftsmen, local services, banks, and doctors as well as municipality buildings.

The Municipality Großschönau and its inhabitants share already a long history of community engagement in sustainable projects to strengthen the region and its local economy. Sonnenplatz Großschönau plays a central role in these projects as a research and innovation centre, as well as an information and education hub through courses and their permanent exhibition “Sonnenwelt”. Also in the project Beyond, Sonnenplatz Großschönau coordinates this demo with the support of Großschönau Municipality, entrepreneurs, residents, utility provider as well as the Austrian project partners from best connect, eFriends Energy, FH Technikum Wien, Forschung Burgenland, MOOSMOAR Energies, ms.GIS and TU Wien.

With the technical measurements set in place, the next steps are focusing on information and involvement of the various local stakeholders, such as consumer (only electricity consumption) and prosumer (Power consumption and PV generation) households with families or retired persons, as well as hotels, a restaurant, a supermarket, the seminar centre, tourist information, and a dairy farm.

At the pilot site Großschönau in Austria, an informational poster providing details to the ongoing BEYOND project was installed in a prominent place. All inhabitants of the community are invited to contact the local partner Sonnenplatz Großschönau to receive further information about the project, how they can be proactive, and personally benefit from local electricity markets.

Another recent thesis from the Department of Power Engineering at NTNU investigates the impacts of establishing a local peer-to-peer market in local energy communities (LECs). It analyzes these impacts based on voltage variations, grid dependency, and losses. The model in this thesis is based on two existing research models, one for multi-stage market optimization and one for power flow analysis. The thesis author modifies these models, and automizes the interaction between the models. The objective functions minimizes the electricity costs for the community 24 hours at a time, while conducting a full Alternating Current (AC) power flow analysis for each time step with this period, using a combination of Excel and MATLAB.

The P2P model used in this thesis is a multi-period linear programming model, based on the work of Lüth et al. [1], with some modifications made to fit its scope. The load flow analysis was performed with open-source tool MAT-POWER. The data sets for the analysis were provided by Zaferanlouei et al. [2]. It analyzed two different scenarios: one in which PV panels were built, and one in which batteries were installed in the community.

This thesis found that, PV production without batteries increases self-consumption, while significantly lowering the losses (44.7%) from grid import. Batteries also lower the losses, but there is a significant difference between the no market and P2P scenario for batteries. It found that introducing a P2P market increases losses by 13.8%, because nodes with batteries will often sell stored energy locally rather than using it for self-consumption.

The thesis found that while DERs and storage options significantly reduce cost to the community (30.71-34.10%), the savings of establishing a P2P market were much lower (2.63-3.45%). This was found to be in contrast to the results of Lüth et al. [1], where an implementation of local trade (without a power flow analysis) yielded savings of 16-22%. This difference most likely arises from the difference between Norwegian and UK power markets, as well as the existence of wind turbines in the UK case (which have complementary load profiles to solar PV).

The power flow analysis found some insignificant effects to the voltage levels in the cases studied. The integration of PVs decreased the grid demand by 13.73% while the integration of batteries decreased it by 19.19%, although the existence of a P2P market was found to have no effect. This peak demand increase could be curbed with a peak power term to decrease the profitability of extensive battery charging from grid import.

While the results of this thesis are likely high system-dependent, both from a market design and system setup perspective, it adds to the wealth of studies demonstrating the benefits of DER integration and P2P markets.

[1] A. Lüth, J. M. Zepter, P. C. del Granado, and R. Egging, “Local electricity market designs for peer-to-peer trading: The role of battery flexibility,” Applied Energy, vol. 229, pp. 1233 – 1243, 2018.

[2] S. Zaferanlouei, M. Korp°as, H. Farahmand, and V. V. Vadlamudi, “Integration of PEV and PV in Norway using multi-period ACOPF—Case study,” in 2017 IEEE Manchester PowerTech, pp. 1–6, 2017.

A recent thesis from the Department of Industrial Economics and Technology at NTNU investigates two different optimization-based system control strategies on a local electricity market level. These strategies are evaluated based on two outputs: the total cost of electricity during operation [for both the energy sharing region (ESR) as a whole and for each end-user within the ESR] and peak grid power demand, which is determined by the rate of self-consumption of distributed energy resources (DERs) within the ESR. To investigate the relationship between peak power demand and total electricity costs, a multi-objective optimization (MOO) approach based on the ϵ-constraint method was also implemented. 

The first optimization strategy was the decentralized control system strategy, which minimized electricity costs for each end-user within the ESR, assuming they could only utilize their own local production, storage units, and the grid to meet their demands (visualized in the figure above). The second optimization strategy, contrarily, minimizes electricity costs for the ESR as a whole, and enables peer-to-peer (P2P) trading amongst end-users. These strategies were applied to two different communities – 25 residential buildings in London, UK, and three large industrial end-users at Forus, Norway. The results for one house in Week 24 using approach 1 are visualized below. 

The results of the thesis show that the centralized optimization strategy with P2P electricity trading gave the lowest total costs for the ESR. A cost reduction of 1.0-8.0% was found when compared to the decentralized strategy, as well as a reduction of grid energy consumed of 1.4-18.9%. Finally, the results from the MOO show that there is a dependency between total electricity costs and peak power demand for the cases studied and that a small increase in cost can reduce the peak power demand by a significant amount.

On the 25th of February of 2020, all partners from the BEYOND project met for the first time in the Kick-off meeting held in Vienna and organized by the project´s coordinating partner NTNU and TU Wien.

The day started with a presentation from Pedro Crespo del Granado (NTNU, and BEYOND project coordinator) about an overview of the project in order to give the possibility of discussing to modify the work packages defined in the Project Management Plan. After that, each partner gave a 10 minutes presentation in order to present themselves to the rest of the consortium. This gave the opportunity to the rest of the participants to understand the work they do at their department/firm, to get to know the different team members and to discover the projects and activities they are involved in and that is closely related to BEYOND. Then, Francesc Girbau (CITCEA-UPC) introduced the SGAM (Smart Grid Architecture Model) methodology developed by CITCEA-UPC and FLEXIDAO to allow for the characterization of existing actors, roles and relationships, as well as the identification of use cases to be implemented in the laboratory and real pilots. On connection with this, Helmut Bruckner (Sonnenplatz Großschönau), Markus Löschenbrand (SINTEF Energi) as well as Aziz Sai and Shafi K Khadem (IERC) exposed the Austrian, Norwegian and Irish pilots, respectively. The day concluded with some indications by Pedro Crespo del Granado and Raquel Alonso Pedrero (NTNU) about the organization and procedures to follow during the project timeline to help for the coordination and communication among partners.

The kick-off meeting allowed partners to discuss how to proceed and to start working on the project as well as formalize new ideas and contributions that will help BEYOND to fulfill and excel in the deliverable of the results.