Peer-to-Peer (P2P) electricity trading and Power Purchasing … · 2020. 7. 13. · Peer-to-Peer...

Peer-to-Peer (P2P) electricity trading and Power Purchasing

Agreements (PPAs)

Part 2 of theGJETCStudyonDig ita l izat ionandthe

EnergyTransit ionAuthors:

Yasushi Ninomiya, Akiko Sasakawa, Institute of Energy Economicy, Japan

Judith Schröder, Stefan Thomas, Wuppertal Institute for Climate, Environment and Energy

Wuppertal, Tokyo, June 2020

Imprint

Publisher

WuppertalInstituteforClimate,EnvironmentandEnergy

Döppersberg1942103WuppertalGermanywww.wupperinst.org

TheInstituteofEnergyEconomicsJapan

InuiBldg.Kachidoki,10th,11thFloor13-1,Kachidoki1-chome,Chuo-ku,Tokyo104-0054Japanhttps://eneken.ieej.or.jp/en/

Contact

GJETCSecretariat

[email protected]

Phone:+492022492-184

Fax:+492022492-108

ThisGJETCStudyreceivedfinancialsupportfromtheGermanFederalEnvironmentalFoundation(DBU)andtheMinistryofEconomy,TradeandIndustry(METI).

Content

1 Introductionandobjectivesofthestudy..................................................................................1

2 Peer-to-Peerelectricitytrading(P2P)andPowerPurchasingAgreements(PPAs):purposes,models,andpreconditions...............................................................................................3

2.1 PurposesandobjectivesofP2PelectricitytradingandPPAs........................................................3

2.1.1 P2Ptrading...........................................................................................................................................3

2.1.2 PPAs.........................................................................................................................................................4

2.1.3 DifferencesbetweenP2PtradingandPPAs...........................................................................5

2.2 ModelsofP2PtradingandrelevanceofeachmodelforGermanyandJapantodayandinthefuture..........................................................................................................................................................................6

2.2.1 Germany.................................................................................................................................................6

2.2.2 Japan......................................................................................................................................................10

2.3 Preconditions,especiallydigitaltechnologyforP2Ptrading;statusofpreconditionsinbothcountries..............................................................................................................................................................14

2.3.1 Connectedloadmeters,e.g.smartmeters............................................................................14

2.3.2 Datatransmissionandhandling,andeconomictransactionsystem,suchasblockchain...........................................................................................................................................................16

3 Experiencestodateandcurrentdevelopments/trendswithP2PtradingandPPAsinGermanyandJapan..........................................................................................................................18

3.1 ExamplesofP2PenergytradingservicesinGermany...................................................................18

3.1.1 Enyway.................................................................................................................................................18

3.1.2 LitionEnergy......................................................................................................................................22

3.1.3 WSWTal.Markt.................................................................................................................................23

3.1.4 RegHEE–Regionaltradingofelectricityfromrenewableenergysourcesandpowerlabelingonablockchainplatform.............................................................................................23

3.1.5 AllgäuMicrogrid...............................................................................................................................24

3.2 ExamplesforP2PinJapan.........................................................................................................................24

3.2.1 UrawamisonoProject.....................................................................................................................25

3.2.2 KEPCO(KansaiElectricPowerCo.)..........................................................................................25

3.2.3 MinnaDenryoku...............................................................................................................................26

3.3 ExamplesforPPAsinGermany................................................................................................................27

3.3.1 Innogyandvariouscustomers...................................................................................................27

3.3.2 Mercedes-BenzandStatkraft......................................................................................................27

3.3.3 StatkraftandEnerparc...................................................................................................................28

3.3.4 GreenpeaceEnergy..........................................................................................................................28

3.3.5 EnBWandEnergiekontor.............................................................................................................28

3.3.6 OverallPPAmarketdevelopment.............................................................................................29

3.4 ExamplesofPPAsinJapan.........................................................................................................................30

3.4.1 Generalsituation..............................................................................................................................30

3.4.2 Examplesofon-sitePPAsinJapan............................................................................................32

4 PotentialpositiveandnegativeimpactsforeachP2PtradingmodelandforPPAsingeneral......................................................................................................................................................34

4.1 P2Penergytrading........................................................................................................................................34

4.1.1 Overviewofincentivesandbarriersformarketactorsineachmodel....................34

4.1.2 Potentialpositiveandnegativeimpactsformarketsandtheenergysystemintotal 40

4.2 PPAs......................................................................................................................................................................49

4.2.1 Overviewofincentivesandbarriersformarketactorsineachmodel....................49

4.2.2 Potentialpositiveandnegativeimpactsformarketsandtheenergysystemintotal 50

5 RecommendationsonP2Penergytradingmodelsandpolicies....................................52

5.1 Recommendationsforbothcountriesonmodelsthatwouldbeusefulintheirrespectivemarketsbywhen........................................................................................................................................................52

5.1.1 UsefulP2Ptradingmodels...........................................................................................................52

5.1.2 UsefulnessofmodelsofPowerPurchasingAgreements................................................54

5.2 Policiesandregulationsneededforsuccessfulintroductionofthemodelsrecommended 56

5.2.1 P2Ptrading.........................................................................................................................................56

5.2.2 PPAs.......................................................................................................................................................58

6 Conclusions,Recommendationsandfurtherneedsforresearch..................................60

6.1 ConclusionsandrecommendationsforP2PtradingandPPAs..................................................60

6.2 Outlookonfurtherfieldsofdigitalizationandtheenergytransition.....................................65

6.3 Furtherresearchneeds................................................................................................................................66

7 Bibliography....................................................................................................................................67

Peer-to-Peer(P2P)electricitytradingandPowerPurchasingAgreements(PPAs)

Peer-to-Peer(P2P)electricitytradingandPowerPurchasingAgreements(PPAs) 1

1 IntroductionandobjectivesofthestudyDigitalizationisoneofthemajormegatrendsofthe21stcentury,whichisincreasinglyradiatingintomoreandmoreareasoflife,creatingnewbusinessmodels,butalsobringingwithitpreviouslyunknownchallenges.Thehealthsector,politicsandadministration,urbandevelopmentandcommunicationarejustafewexamplesofthistrend.

Theenergysector,too,isseeingrapiddevelopmentofusesofdigitalization.Thepotentialofdigitalsolutionsforamajortransformationoftheenergysystemmaybehigh,especiallywithregardtoacomprehensiveenergytransition.Overall,thereishopethatdigitalizationcanplayakeyroleinincreasingtheefficiencyoftheenergysystemandopeninguptheenergymarkettonewtechnologiesandbusinessmodels.Intheelectricitymarket,digitalizationenableshightransactionspeedsandmicro-transactions;partsoftheelectricitymarketcouldbeorganizeddecentrallyandautomaticallybetweenproducersandconsumers,includingenergystorageanddemandresponse,andcertificationandtradingofgreenelectricitycanbesimplifiedandmademoretransparent(seeAgenturfürErneuerbareEnergie2018).

Ofcourse,thisisalsoassociatedwithchallenges:Theconstantincreaseofdigitalprocessescausesanenormouscomputingeffortandthecorrespondingenergyandmaterialsconsumption.Themarketrolesandresponsibilitiesofnewplayersinelectricitytradinghavenotyetbeenclarified.Inaddition,thereisaconflictofinterestbetweendataprotectionand“hungerfordata”ofanintelligentenergysystem,whichisalsoaquestionofsocialacceptanceofdigitaltechnologies.

Inthefollowing,thepossibilities,opportunitiesandpotentialpositiveandnegativeeffectsofdigitaltechnologiesforatransformationoftheenergysystemwillbeexaminedinmoredetailfortheexampleofpeer-to-peerelectricitytrading(P2P)andpowerpurchasingagreements(PPAs),byreviewingandevaluatingexistingresearchworkandperformingownanalysis.

P2Ptradingisofparticularinterestbecause,withintheframeworkoftheenergysector,itcreatestheopportunitytonetworkdifferentmarketplayersdirectlywitheachotherandthusestablishdirectelectricitytradingwithoutpreviouslyusualinstancessuchaselectricityexchangesorenergysuppliers.P2Pcanaffectboththeinteractionbetweencompaniesandthatbetweencompaniesandconsumers(inthesenseoftraditionalsupplyrelationships);ontheotherhand,innovationsuchasblockchaintechnologyalsoenablesP2Ptradingofenergybetweenconsumersorfromconsumerstocompanies.NationwideelectricitytradingviasuchaP2Pnetworkwouldhavemassiveeffectsontheexistingenergymarketanditsestablishedmarketplayers,asthereistechnicallythepossibilityofafullydecentralizedandautonomousenergysupply(cf.Kreuzburg2018).ThiswilldependonwhoisallowedorabletoparticipateinsuchP2Ptrading,forwhichpurpose,andwhatwillbetheconsequencesforthemarketsandparticularlyforthosenotallowedorabletoparticipateinP2Ptrading.

Thequestionsthispaperseekstoanalyzeare,therefore:

• WhatarepurposesandobjectivesofP2PtradingandPPAsproposedoralreadytestedtoday(chapter2.1)?Forexample,enablingcontinuedoperationofRES-EplantsaftertheendofFeed-inTariff(FIT)payments;meetingcorporategreenelectricitypurchaseor



decarbonizationgoals;regionaldecentralizedpowermarkets;gridstabilizationviatargetedP2Ptrading;financingnewRES-EplantswithoutFIT-orFIP/MP-typepayments(FIP=Feed-inPrice;MP=MarketPremium1);orotherpurposesorobjectives?Andwhatistherelevanceofeachoftheidentifiedpurposes/objectivesforGermanyandJapantodayorinthefuture?

• WhichmodelsofP2PtradingandPPAs(e.g.singlebilateralPPAs;decentralizedautonomousnetworkofproducersandcustomers;supplier-facilitatedmarket)arepossibleordoalreadyexist?Whataretherolesandinterestsofmarketactors?Andwhichcontractualarrangementsarepossibleinthedifferentmodels?Aretheseappropriateforthepurposesandobjectivesidentified?HowrelevantaretherespectivemodelsforbothJapanandGermanytodayandinthefuture?(Chapter2.2)

• Inchapter2.3wewillaskforthepreconditionsforeachmodel,especiallyforthedigitaltechnologyneededforP2PtradingandPPAs(e.g.smartorotherdata-storingloadmeter,blockchainorothertechnologyfortrackingsupplyandimplementingcontractsandpayments,EVsandsmartchargers,legal/regulatorypreconditions,necessityofassumingbalancinggroupresponsibility).Whatisthestatusofpreconditionsinbothcountries?

• Whichexperiencestodateandcurrentdevelopment/trends,withwhatevermodel,existinGermanyandJapan(chapter3)?

• Basedonthepreviouschapters,chapter4willaskwhatthepotentialpositiveandnegativeimpactsareandfortheopportunitiesandthreatsforeachtypeofmarketactor;ontheonhandformarketsandtheenergysystemintotal,ontheotherhandfornon-participatinggeneratorsandconsumersforeachmodel.

• Derivedfromtheanalysisoftheprecedingchapter,recommendationsforbothcountriesonmodelsthatwouldbeusefulintheirrespectivemarketsareformulatedinChapter5.1.

• Whichpoliciesandregulationsareneededforasuccessfulintroductionofthemodelsrecommended(chapter5.2)?

Thereportendswithconclusionsandrecommendationsinchapter6.

1UndertheGermanRenewableEnergyLaw,gridaccessandpaymentsfornewmediumtolargerenewableenergygeneratorsaregrantedonlybysucceedinginanauction.ThegeneratorswillreceivetheFeed-inPrice(FIP)theybidorthewholesalemarketpriceatthetimeoffeed-in,whateverishigher.Ifthewholesalemarketpriceforthesametypeofgenerator(e.g.SolarPV,on-shorewind),averagedoverthemonth,islowerthantheFIP,thegeneratorwillreceivetheMarketPremium(MP)coveringthedifferencetotheacceptedFIPofthegenerator.JapancurrentlyconsiderstonewlyintroducetheFIP/MPschemesimilartoGermaninplaceoftheexistingFITschemeforlargescalesolarPVandonshore/offsorewind.



2 Peer-to-Peerelectricitytrading(P2P)andPowerPurchasingAgreements(PPAs):purposes,models,andpreconditions

2.1 PurposesandobjectivesofP2PelectricitytradingandPPAsTodiscusspurposes,preconditionsandobjectivesofP2PtradingandPPAs,firstthequestionariseswhatisthedefinitionofP2PtradingandPPAs?

2.1.1 P2Ptrading

ThereisnointernationallystandardizeddefinitionofP2Ptrading,peer-to-peerelectricitytrading.Infact,P2Ptradingisanewconceptwhosefunctionalpossibilityhasnotbeenfullyexploredyet.AsanexamplespecificallyaddressingP2Ptradingofelectricity(orgas)fromrenewableenergy,theEURESDirective(EU2018/2001,Article2Definition(18))statesthat“peer-to-peertradingofrenewableenergymeansthesaleofrenewableenergybetweenmarketparticipantsbymeansofacontractwithpredeterminedconditionsgoverningtheautomatedexecutionandsettlementofthetransaction,eitherdirectlybetweenmarketparticipantsorindirectlythroughacertifiedthird-partymarketparticipant,suchasanaggregator.”Inthispaper,P2Ptradingcanbedefinedas“acontractualmodelthatwillenableshort-termelectricityexchangeonaregionalornationalscalebetweenmultiplepeerssuchas‘prosumers’or/andsmalltomediumpowergeneratorsor/andelectricityapplianceslocatedattheendofdistributionnetworks,i.e.distributedenergyresources”.TheP2Ptradingwillnormallybebasedoncontractualrulesandelectricitypricesdeterminedbythemarketorthecontract,aswellaspredeterminedconditionsgoverningtheautomatedexecutionandsettlementofthetransaction.

Especiallythelastelement,theautomatedexecutionandsettlement,willrequireextensiveuseofdigitalization.Inmostpilotorfullbusinessschemesexistingtodate,blockchainisusedforthisautomatedexecutionandsettlement,buttheremayalsobeothersoftwaresolutionsforimplementingit.

Asaruletoday,electricity,includingfromrenewableenergysources,issuppliedtofinalconsumersbyelectricitysuppliers,whoprocuretheelectricitytheysupplyfromwholesalemarketsor,insomecases,directlyfromgenerators,includinggreenelectricityproducers.Increasingly,however,thedirectsupplyofgreenelectricityfromproducerstofinalconsumersisalsobeingdiscussedandinsomecasesalreadypracticed.

Peer-to-peer(P2P)electricitysupplymodelsmaybecomeparticularlyinterestingagainstthebackgroundoftheincreasingnumberof“prosumers”,i.e.electricityconsumerswhohaveanelectricitygenerationplantfortheirownsupplyandsellanysurplusestootherconsumers,i.e.,theirpeers(insteadofsellingsurplusestotheelectricitynetworkoperator,combinedwithaclaimtothefeed-intariff,asforexampleinGermanyunder§21EEG2017)(hereandinthefollowingBuchmüller2018:117).Suchamassiveincreaseindistributedrenewablegenerationplants,particularlyrooftopsolarPV,associatedwithanenormousincreaseinexcesselectricityafterself-



consumptioncallsforexploringthestrengthsandweaknessesofP2Ptradingasoneofmeansofeffectiveuseoftheseresources.

P2Pmodelscanalsobeanoptionforconnectingsmall-scaleanddecentralizedgenerationwithcorrespondingconsumersandthusreactingtotheincreasingdecentralizationofenergygeneration,whichisongoinginGermanyasaresultofnuclearandcoalphase-outandtheincreasingexpansionofrenewableenergies.AnadditionaldrivermaybetheendoftheFITsupportperiodfortheFITcertifiedplants,whichwillapplytoanincreasingnumberofwindandsolarplantsfrom2021inGermanyandalreadyappliestoalargenumberofresidentialroof-topsolarplantsevenfrom2019inJapan.P2PmodelsarediscussedasanapproachforenablingthecontinuedeconomicoperationoftheFITcertifiedplantsaftertheendofthefundingperiod.Inaddition,supportersofpeer-to-peertradingalsoseethisasacontributiontoincreasingsocialacceptanceoftheenergytransition,aselectricitycanbeadvertisedwiththeattributes“directlyfromtheproducer”and“fromtheregion”.

2.1.2 PPAs

AninternationallystandardizeddefinitionisalsonotyetavailableforPPA,PowerPurchasingAgreement.AttheEUlevel,theabove-mentionedRESDirective(EU2018/2001Article2Definition(17))definesthat“renewablespowerpurchaseagreementmeansacontractunderwhichanaturalorlegalpersonagreestopurchaserenewableelectricitydirectlyfromanelectricityproducer.”ThedefinitiongivenbyIRENA(2018)ismorespecificthatis“anarrangementunderwhichacompanyentersintoalong-termcontractwithanindependentpowerproducerorautilityandcommitstopurchasingaspecificamountofrenewableelectricityortheoutputfromaspecificasset(sleevedorvirtual),atanagreedprice”.Havingthese,thispaperdefinesPPAas“amedium-to-long-termelectricitysupplyagreementconcludedbetweenaseller(plantoperator)andabuyer,e.g.anenergysupplierorfinalelectricityconsumers,suchaslargeindustrialconsumers,datacentres,andlargebuildings”.

Inprinciple,PPAshaveaverywidescopeofapplication,whichcanincludeawidevarietyofdesignforms.ThismakesthescientificdiscussionmoredifficultbecausePPAsareacollectivetermforvariousdifferenttypesofcontracts,whichdonotnecessarilyhaveanoveltyvalue,comparedtothecurrentstatusofknownenergycontracts.Classicdirectmarketingorelectricitytradingcontracts,forexample,alsofallunderthistermaccordingtotheirwording.

TheonlydefiningfeatureofanyPPAseemstobethatitisacivillawcontractintheelectricitysectorwithcertainindividuallydesignedconditionstothecontractcontentswhicharetoberegulatedcompellingly.Thisconcerns,forexample,aremunerationagreedforthepurchaseofelectricity.Inthecurrentdiscussion,however,itisalsoregularlyaquestionofcertainadditionalelementsofanelectricitypurchaseorpurchasethatcanqualifyaPPA:Thisconcerns,forexample,thenegotiationofacomparativelylongcontractterm,ifaPPAisintendedtosecuretherefinancingofaninvestmentinrenewableenergyplants,thepassingonofguaranteesoforiginasproofofthegreenelectricitypropertyortheproofoffurthercharacteristicsoftheelectricitytobesupplied,suchasacertainregionalpurchase.PPAsareoften,butnotnecessarily,regardedasacounter-modeltoFITorFIP/MPsupport.Inaddition,thefocusisparticularlyonformsinwhichelectricityissoldandsupplieddirectlyfromaproducerordirectmarketertoafinalconsumer-



suchasalargecompany(cf.Hilpert2018).ThislastpointisalsoreflectedinEuropeanlaw(seeabove).

2.1.3 DifferencesbetweenP2PtradingandPPAs

Asalreadyseenabove,P2Ptradingisabilateralelectricitytradebetweenprosumers.Incontrast,bythedefinitionofPPA,PPAisaunilateralelectricitytradecontractinaone-wayfromrenewablepowerproducer(seller)tofinalconsumeroranintermediary,suchasasupplier(buyer).AdistinctcastofeithergeneratororconsumerisdefinedunderaPPA,i.e.thecontractorsunderaPPAmustbeeithergeneratororconsumer,whichiscompletelydifferentfromtheP2Pcase:inP2Ptrading,eachcontactingpartycanbebothgeneratorandconsumer,althoughthisdoesnotalwayshavetobethecase.

Besidesthis,thereareanumberofdifferencesbetweenP2PtradingandPPAs.First,thecapacityofrenewablepowerplantsunderaPPAislikelytobemuchlarger,forinstanceafewMWscapacitiesarecommonlyseen,comparedtothatofunderP2Pwhichcanincludesmall-scaleplantlessthan10kWcapacity.Thoughsmall-scaleplantslikelessthan10kWcanbeacontractorofPPAintheory,anactualapplicationofsuchcaseisrarelyseenunlessthesesmallplantsareaggregatedbyanaggregator,typicallylargeprivatecompanies.Similarly,theconsumersideofaPPAismostlikelytobealargeorganizationandnotanindividualhousehold.Onceagain,thisisahighlydistinctfeaturecomparedtotheP2Ptradingcase,whichtheoreticallycanaccommodateanytypeofconsumersfromindividualhouseholdtoalargeorganization.However,thismaychangeinthefuture,withPPAsofferedalsotosmallerconsumers.Ontheotherhand,someP2Ptradingpilotschemesalsoincludemoremedium-sizedrenewableenergyplantsthatreachedthepast-FITage.

Second,thedurationofcontractsforelectricitytradingissignificantlydifferentbetweenP2PtradingandPPAs,i.e.thedurationofaPPAisnormallyonayearly-basis,whichcanlast10yearsormore.Incontrast,thedurationofaP2Ptradingcontractexecutioncanvaryfromfewsecondstofewhours,days,weeksdependinguponthesituation,butveryunlikelytobeonayearly-basis.However,theP2P‘framework’contractbetweentheparticipatinggenerators,prosumers,andconsumerstosellandbuyelectricityatacertainpriceandconditionscanbeconcludedforseveralmonths,ayearortwo,andcanbeautomaticallyrenewing.

ThepurposeofPPAsisobviouslytoprovideprivate/publicorganizationswithameanstoprocurerenewableelectricityoverthelongerperiodatanagreedpricewithoutcapitalinvestmentinphysicalinstallationoftheplantbythemselves.Fortheseller,thepurposeistoprovidesecurityfortheinvestmentandoperationintherenewableenergyplant.Anengagementofprivate/publicorganizationstoacquirerenewableelectricityisakeydriverofPPAs.ThoseorganizationsarelikelytocommittoSDGsrelatedinitiativessuchasRE100andmayalsoconsiderhedgingagainsttherisingcostsofconventionalenergy.Asseenfromtherenewablepowerplant’sviewpoint,thepurposealsoincludessecuringoperationofrenewablepowerplantsoverthelongerperiodwithoutexplicitfinancialsupportlikeFITandsubsidy.Bothofthepurposesareapplicabletothecasesofnewlybuiltplantsina“post-FIT/FIPera”and“FIT-expired”plants.Thispointisparticularlyrelevanttopolicymakerswhomakeabalancebetweenpromotionofrenewablesandfiscalexpenditureorenergypricesthatwouldotherwisecarrythecosttosupporttherenewables.



Therefore,promotionofrenewableenergywithoutpublicorlegallybasedfinancialsupportshouldbeapurposeofPPAs.

Baseduponthesepurposes,theprimaryobjectiveofPPAscanbesummarizedaseither1)thepromotionofnewlybuiltrenewablepowerplantsoverthelongperiodin“post-FIT/FIPera”or2)supportingcontinuousoperationof“FIT-expired”renewableenergyplantswithoutexplicitfinancialsupportfromthepublicsectororenergyconsumers(viaaFITlevy).

2.2 ModelsofP2PtradingandrelevanceofeachmodelforGermanyandJapantodayandinthefuture

ThissectiondiscussesexistingorpossiblemodelsofP2Ptrading,theroleandinterestsofmarketactorsandthecontractualarrangementsineachmodel,andtheirappropriatenessforthepurposesandobjectivesidentified,inbothcountries.Inthisway,therelevanceofeachmodelforGermanyandJapantodayandinthefutureisanalyzed.

2.2.1 Germany

Kreuzburg(2018:8etseqq.)identifiesthreemarketmodelsaspossibleusesofP2Penergytrading.Althoughthissourceimpliestheuseofblockchaintechnology,thesemarketmodelscouldalsobeperformedwithothertechnicalsolutionsfortheP2Ptrading:

1. Thewholesalepowermarketmodel:TheaimofP2Ptradinginthismodelistoachievemarket-basedP2Psalesrevenuesbyusingwholesalepowermarketpricestodetermineamarketablepricefromtherelationshipbetweensupplyanddemand.ThismeansthatthewholesalepricesareusedasareferencetodeterminethepricesonP2Ptrading,butthelatterarenotnecessarythesameastheformer.Similartoconventionalelectricitytrading,thetransportanddistributionofelectricitytothefinalconsumerwouldbebasedontheconceptofaso-called“copperplate”,whichinprincipleallowsanyproducertotradeelectricitywithanyconsumeranddisregardsnetworkconstraints.AP2Ptradeaccordingtosuchlogicwouldcomeclosesttothecurrentelectricitymarketdesign;consequently,electricitywillcontinuetobeunderstoodhereasapurecommodityanddifferentiatedbyprice.ProvidersofP2Pelectricityareinthedirectcompetitionwithtraditionalsuppliers,sotheexpectedP2Ptradingrevenueshouldnotexceedthepriceofconventionalgenerationandmarketing.However,thedifferencebetweenthecostsoftheP2PtradingplatformandthecombinedmarginoftraditionaltradersandsupplierscouldbesharedbetweentheP2Pplatformprovider,thesellers,andthebuyers.

2. Regional/Localelectricityprocurement,orregionaldecentralizedpowermarkets:Theconsumerpurchaseselectricityhereincloseproximitytotheproducer.Thisandthe‘green’attributeofrenewablepowermayinduceconsumerstopayasmallpricepremiumfortheregionalelectricity,whiletheymaybeabletosaveonthetraditionalsuppliermargin,asinthefirstmodel,andinadditionontransmissiongridfees,ifregulationallows.Ifthereareshorterdistancesoftransport,lineandtransformationlossesandevenneedstoenhancethetransmissiongridcouldbereducedinsucha



model.However,thismodeltoowillnotautomaticallytakenetworkconstraintsandsystemstabilityintoaccount.

3. P2Ptradingservinggridstabilization:IftheaimistostabilizetheelectricitynetworkthroughP2Ptrading,incentivesfortargetedelectricityconsumption,demandresponse,andloadshiftingwillhavetobecreated.Forexample,networkproviderscouldbeallowedtomaketheirnetworkchargesmoreflexibleandprovideconsumerswithpricesignalsviasmartmeteringsystems,sothatfinancialincentivestoshiftloads(demandsidemanagement)couldbecreateddependingonthefeed-insituation.ThisapproachcouldanticipategridbottlenecksbutalsoimbalancesintheelectricitymarketandcounteractthemthroughcoordinatedP2Ptrading,e.g.usingstoragefacilities.

AnessentialchallengethatwouldarisethroughtheestablishmentofaP2Pelectricitytrading,bymeansofblockchainorothertechnology,wouldbethechangeonthepreviousrolemodelsoftheenergysector.CompatibilitywiththeregulatoryframeworkandtheinfluenceofthedistributionofroleswilldependontheconcretedesignoftheP2Ptrading.Ontheonehand,aP2Pnetworkisconceivable,whichisstilloperatedandcontrolledbyasinglecompanyoraconsortiumtakingarolesimilartotraditionalsuppliersortoVPPoperators.Ontheotherhand,theremaybeadecentralizedautonomousnetworkofpeerconsumers,prosumers,andproducers,characterizedbymaximumindependencefrompublicorprivateenergysupplycompanies.

(1)ApproachofacontrolledP2Pnetwork(cf.Kreuzburg2018:23f):Inthisapproach,decision-makingpowerandresponsibilityforsecurityofsupplyandforcontractsandpayments,aswellasbalancinggroupresponsibilitywillbeconcentratedinasingleP2Pnetworkoperatororaconsortiumofcooperatingoperators(e.g.theprovideroftheP2Ptradingplatformandanenergycompanyactingasthebalancinggroupresponsibilityandpossiblyasasupplierofmissingpowerandbuyerofexcesspower,asintheenywayexamplepresentedinchapter3).Asaserviceprovider,thisoperator,liketheoperatorofavirtualpowerplant,wouldaggregatethedecentralizedgenerationcapacitiesandloadsandatthesametimebundlevariousadministrativeprocesses.Butinsteadofresellingthecapacitiesonthewholesalemarket,asisthecasewiththecapacitiesofavirtualpowerplant,theP2Pserviceproviderwouldenableitsparticipantstotradeelectricitydirectlywitheachother.BycommissioningaserviceproviderwiththepurchaseandsupplyofP2Pelectricityandthetransferoftheassociatedobligations,P2Pparticipantswouldtransfertheroleofsupplieranddeploymentmanagertotheserviceprovider.Thesameappliestobalancinggroupresponsibility,whichwouldalsobetransferredtotheserviceproviderinthiscontext.Finally,thisapproachwouldenabletheusualaccesstoelectricityprocurementbymeansofanall-inclusivecontractbetweenthefinalcustomersandtheP2Pnetworkoperator,wherebytheoperatoroftheP2Pnetworkactsasasuppliervis-a-visthedistributionnetworkandtransmissionsystemoperators,assumesbalancinggroupresponsibility,transmitsschedulesaccordingly,andcompensatesforovercapacitiesorundercapacitiesoftheP2Pnetworkonthewholesalemarkets.



Figure1:ApproachofacontrolledP2Pnetwork

Source:owngraphicsbasedonKreutzburg(2018)

IntheeventthatthequantitiesofelectricitytradedonP2Pbasiswithinthenetworkarenotsufficientforfullsupplyofallconsumers,theserviceproviderwouldalsosellresidualquantitiesofelectricitytoP2Pparticipants.Forexample,theserviceprovidercouldoffera"P2Ptariff",whichwouldenablethefinalcustomertotradeelectricitydirectlybetweenneighborsandfriends,butwouldobligeallnetworkparticipantstocoverthedemandnotcoveredbyP2Ptradingwithanelectricitypurchaseintheconventionalway.IfsupplyintheP2Pnetworkexceededdemand,theP2Pnetworkoperatorwouldselltheexcesselectricitytoothercustomersorinthewholesalemarket.InadditiontooperatingtheP2Pnetwork,theserviceproviderthusprovidesalltheservicesthatmodernenergysuppliersalreadyoffertoday.Itcanthusbestatedthattheestablishedenergysuppliers,betheytraditionalsuppliersorrecentmarketentrantsincludingVPPoperators,wouldactuallybepredestinedforthisroleofP2Pserviceproviders.

(2)Thedecentralizedautonomousapproach(cf.Kreuzburg2018:21f):Thisapproachisanorganizationalmodel,whichcompletelydispenseswithacentralpowerandcontrolinstance.Instead,allnetworkandtransactionaldecisionsaretakenbyconsensus,givingeachnetworkparticipantavoiceandtheopportunitytoparticipate.Thisapproachisinanycasebasedontheblockchaintechnology.Withregardtothedistributionofroles,suchamodelwouldmeanthatthenetworkparticipants,i.e.producers,consumers,andprosumers,wouldhavetoassumeessentialareasofresponsibility.Iftheaimistoachievecompleteindependenceoffinalcustomersfromtheestablishedelectricitysuppliersandautonomyamongfinalcustomers,thedistributionofrolesandtheassociatedobligationsandresponsibilitieswillshiftinthedirectionoffinalcustomers.Accordingly,theP2Pproducerwillhavetoassumetheroleofasupplier,whichwillrequirecontractstobeconcludedwitheachindividualelectricitycustomerandwiththe



transmissionanddistributionsystemoperator.Theobligationsarisingfromthesecontracts,inparticularthebalancinggroupresponsibility,willhavetobeborneaccordinglybyaP2Pproducerintheroleofsupplierandpersonresponsibleforoperations.Ontheconsumerside,thefinalcustomerwillalsohavetoreckonwithsignificantlymoreresponsibility,sinceaccordingtothismodel,thefinalcustomerwillhavetoconcludeagridconnectioncontractaswellasagridusagecontractwiththeresponsibledistributiongridoperator.Inaddition,anall-inclusivecontractwithasupplierwillnolongerbepossible,whichiswhyP2Pconsumerswilleitherhavetojointhebalancinggroupofaserviceproviderorindependentlyregisterandsettletheirwithdrawals,i.e.,becometheirownbalancinggroupresponsible.Inreality,itisunlikelythatbothsmallproducersandconsumerswillbeabletotakesuchresponsibilities(seebelow).However,thisrequirementcouldbeavoidediftheP2Pelectricitytradingisperformedinamicrogrid(cf.ModelJ1-J3,whicharethe“off-gridP2Ptransaction”modelsintheJapanesedefinition).

Figure2:Thedecentralizedautonomousapproach

Source:owngraphicsbasedonKreutzburg(2018)

Sincenon-discriminatorynetworkaccessmustbeguaranteedinGermany,inprincipleanyprivateorcommercialproducercanalsobecomeanelectricitysupplier.Morethan700energysuppliersofvarioussizesarealreadyofficiallyregisteredwiththeFederalEnergyRegulator(Bundesnetzagentur).Inthisregard,however,itshouldbenotedthatanynaturalorlegalpersonwhosuppliesenergytoothersviathepublicnetworkisanenergysupplycompanyinthemeaningof§3no.18EnWGandmustnotifytheBundesnetzagenturimmediatelyofthecommencementofenergysupplypursuantto§5EnWG.However,iftheregulatoryauthoritycomestotheconclusionthatthenotifiedenergysuppliercannotprovidethenecessarypersonnel,technicaloreconomiccapacityandthereforecannotguaranteeareliablesupply,theauthorityshallbeentitledtoprohibittheperformanceoftheactivitypursuantto§5sentence4EnWG.



FortheelectricitysupplierinanopenP2Pnetwork,thiswouldnotonlymeanthatheorshewouldhavetosetupacorrespondingcompanytohandlehisorhertradingtransactions,butalsothat(s)hewouldhavetoregisterwiththeregulatoryauthoritiesand,ifnecessary,provehisorherefficiencyandreliability.

Furthermore,itshouldbenotedthattheroleofthepersonresponsiblefortheoperationscheduleshassofaronlybeenimportantforlargepowerplantsandindustrialconsumers,butnotforsmallPVsystemsandhouseholdcustomers,sincefeedsareforecastbythegridoperatorandloadprofilesbytheelectricitysupplier.However,ifinfuturethemembersofaP2PnetworkdisengagethemselvesfromtheirconventionalelectricitysuppliersandnolongerfeedtheelectricitytheygenerateintothegridwithintheframeworkoftheEEGfeed-intariff,itisconceivablethatP2Pparticipantswouldbecomeresponsiblefortheschedulesandwouldhavetomeettheassociatedrequirements.Again,thiswouldnotbeneededinamicrogrid.

OnepossibilityofimplementingboththeaboveapproachesofP2Penergytradingthatmaydevelopisthroughtheplatformeconomy,inwhichdigitalplatformsactasintermediariesbetweensuppliersandconsumersofservices.“Thedisruptivepotentialofplatformsliesinthefactthat,inextremecases,theycanmakealargepartorevenalloftheintermediariespreviouslyactiveinthebusinessfieldsuperfluous.Platformstechnicallyformacentralcommunicationinterface,theysimplifythesearchforinformationandtradingpartnersforallmarketparticipantsandconsequentlyreducethecostsformarketparticipantsconsiderably.”(Buchmüller2018:118;translationbytheauthorsofthispaper)InsteadofalargenumberofelectricitysuppliersthathavesofarmediatedbetweenelectricityproducersandconsumersinGermany,onlyasingleoratmostafewplatformswouldbeneeded.

Inthiscontext,thepossibilityofpromotingP2Pdeliverymodelsthroughtheuseofblockchaintechnologyiscurrentlybeingdiscussedevenmorestrongly(forthetechnicalfunctioningofblockchainseeChapter2.3).

Tosumup,theP2PmodelsidentifiedinGermanycanbesummarizedasfollows.

CentralizedorDecentralized Sub-category ModelnameControlledP2Pnetworkmodel

Wholesalemarketmodel ModelG1Regional/localelectricityprocurementmodel

ModelG2

P2Ptradingservinggridstabilizationmodel

ModelG3

DecentralizedautonomousP2Pnetworkmodel

on-gridtrading ModelG4

localmicrogridtrading(off-grid)

ModelG5

Table1:ClassificationofP2PmodelsinGermany

2.2.2 Japan

InJapan,modelclassificationofP2Pelectricitytradinghasbeenconsideredmainlybythepolicysidefromtheviewpointoflegalperspective,whichlegal/regulatoryframeworkisrequiredfortheimplementationofP2P.Inthisrespect,METI(2019)identifiestheoreticallypossiblemodelsofP2P,



whicharebroadlydividedintotwocategories.Thefirstcategoryis(1)P2Ptransactionstakingplaceonlylimitedtowithinaparticularmicro-gridwithoutusingtheexistingpowergrid.Hence,thiscategorycanbecalled“off-gridP2Ptransaction”inthispaper.Thesecondcategoryis(2)P2Ptransactionsthroughtheexistinggridincludingbothdistributionandtransmission,whichcanbecalled“on-gridP2Ptransaction”inthispaper.

(1) Off-gridP2Ptransactioncanbefurtherdividedintothefollowing3modelsaccordingtothewayofelectricitytransactionsasfollows:

ü ModelJ1:P2Ptransactionisexclusivelyoccurringwithinalimitedbuilding/flat/apartment.ü ModelJ2:P2PtransactionisexclusivelyoccurringusingchargedelectricityinEV,i.e.the

electricitychargedinanEVissuppliedtoabuilding/facilityatdifferentlocation.ü ModelJ3:P2Ptransactionisexclusivelyoccurringviaaprivatelinewithinalimited

community.

Figure3:ExamplesofP2Ptransactionmodels(ModelJ1-J3)

Source:CitedfromMETI(2019)withmodification.

Undercurrentlawsandregulations,P2PtransactionsoccurringwithinaspecificbuildinginModelJ1andviaEVswithoutusingelectricitygridinModelJ2arenotregulatedand,therefore,canbeimplementedwithaminorrevisionofthemeasurementact.ThisactcurrentlyobligestousetheaccuratespecifiedmeasuringinstrumentscertifiedbyJEMIC(JapanElectricMetersInspectionCorporation)underMETIoradesignatedverificationbodyinordertoexecutethepropermeasurementforanyelectricitytrading,whicharehoweverrarelyinstalledinthehousehold



sectorinthecountry.Ifsuchobligationwererequiredforindividualprosumersandconsumers,thecostbornewouldbeenormous;therefore,aminorcorrectionofthelawtointroducedifferentialweightingmeasurementorpermittingtheusageofothermeasuringinstrumentsaboveacertainstandardofaccuracyiscurrentlyunderconsideration.RegardingModelJ3,theplatformprovider(alsocalledplatformerinthegraphsandthefollowingtext)isrequiredtoregisterasanelectricityretailerundertheElectricityBusinessActtomanagethetransactionsbetweenprosumerandconsumer.ThisisbecauseinModelJ3,theP2Ptransactionisnotconsideredasadirecttradingbetweentheprosumersinthelegalbasis,butisconsideredasanelectricitysupplytoaprosumerbytheplatformerwhoprocurestheelectricityfromotherprosumers,irrespectiveofusingaprivateline(asinthiscase)orgridnetwork.

(2) On-gridP2Ptransactioncanbefurtherdividedintothefollowing4modelsfocusingontheroleoftheplatformprovider.

ü ModelJ4:AnelectricityretaileractsasaP2Pplatformeraswell.P2Ptransactionisprovidedbytheretailerusingexistinggridwhoisalsoresponsibleforbalancingthedemandandsupplywithinthebalancinggroup.ThismodelcanbeseenasequivalenttoModelG1(controlledP2Pnetworkmodel)inGermany(See2.2.1).AlthoughtheexistinggridchargecanbeconsideredastooexpensiveforindividualP2Ptransaction,thismodelcanbeimplementedunderthecurrentlegalframework.

ü ModelJ5:Inthismodel,aP2PplatformerisnotnecessarilythesameastheexistingelectricityretailerlikeimplicitlyexpectedinModelJ4.AP2PtransactionisseparatelyprovidedbyanotherindependentP2Pplatformerwhoisalsoregisteredasanelectricityretailer,butbalancingresponsibilityisstillontheexistingretailer.Thisisthecaseofso-called“low-voltagepartialpowersupplybymultiplesuppliers”,forwhichthecurrentelectricityregulationguidelinestatesthattheexistingretailercouldrefusetooffersuchpartialelectricitysupplyduetohighinefficiencycausedbytheserviceforasmall-scaleuser.Therefore,ModelJ5isnotpossibletobeimplementedunderthecurrentregulatoryframeworkinJapan.However,iftheregulationonlow-voltagepartialpowersupplybymultiplesuppliersisrevised,themodelcanbeimplementedatleastonalegalbasis.

ü ModelJ6:AP2Ptransactionoccursbetweenseveralfactoriesatdifferentlocationsownedbythesamecompanythroughself-consignment,providedbyaP2Pspecializedplatformerwithoutaretaillicense.SincesuchaP2Ptransactionisconsideredasakindofself-consumptionbythecompany,anelectricityretailerdoesnotappearinthismodel,anditislegallyallowed.TheP2PplatformerhasabalancinggroupresponsibilityinthismodelandalsopaysgridfeesaswellastaxesandleviestotheDSOandTSO.

ü ModelJ7:TheP2Ptransactionoccursbetweenconsumersorprosumersformingaspecializedpartnershipwithoutfinancialties,meaningthattheyarefinanciallyindependentfromeachother,andprovidedbytheP2Pspecializedoperatorwithoutaretaillicense.ThismodelisquitesimilartoModelJ6(theP2Ptransactionisaimingtobedefinedasakindofself-consumptionbetweenassociationmembers,notsuppliedbyaretailer,butprovidedbyaP2PplatformerwhohasabalancingresponsibilityandpaysgridfeetoDSO/TSO),buttheonlydifferenceisthat,inModelJ6,thefactoriesareownedbythesamecompanywhereas,inModelJ7,eachresidenceisownedbydifferentindividuals.Thisdifferenceoftheownershipbetweenthetwomodelsmakesanobviousdistinction



undertheJapaneselaw,sothatModelJ6canbeimplementedunderthecurrentlaw,whilstModelJ7cannot;thelawdoesnotconsiderthismodelasself-consumption,duetothedifferentownership.Currently,ModelJ7canonlybeimplementedifitisnotusingtheexistingpowergrid,butusingtheirownprivateline.Then,ModelJ7isineffectconvertedintoModelJ3ofoff-gridP2Ptransaction.

Figure4:ExamplesofP2Ptransactionmodels(ModelJ4-J7)

Source:CitedfromMETI(2019)withmodification.

Regardingtheon-gridP2Ptransaction,asthegridoperatorinchargeisrequiredtobeinvolvedinbalancinggroupresponsibility,theoperationofP2Ptransactioniscomplicatedcomparedwithoff-gridP2Ptransaction.InordertorealizeModelJ5andJ7,itwillbenecessarytomakefurtherdiscussionontheburdenofthegridfee(e.g.gridfeeistoohighforindividualP2Ptransaction)andwhowilltakeresponsibilityformanagingthedemandandsupplyinthebalancinggroupwheretheP2Pplatformisestablished.Then,thelawwouldhavetobeadaptedtoallowthesemodels.

ThefollowingtablesummarizestheJapaneseP2PmodelsconsideredabovecorrespondingtothoseofGermanyintheprevioussection.



CentralizedorDecentralized

Sub-category Germanmodelname

Japanesemodelname

ControlledP2Pnetworkmodel

Wholesalemarketmodel

ModelG1 Model� J4:ExistingelectricityretaileractsasP2Pplatformer

� J5:P2Pplatformerisindependentoftheelectricityretailer

� J6:P2Ptransactionb/wfactories/buildingsownedbythesamecompany

� J7:P2Ptransactionb/wprosumers/consumersformingapartnership

Regional/localelectricityprocurementmodel

ModelG2

P2Ptradeservinggridstabilizationmodel

ModelG3

DecentralizedautonomousP2Pnetworkmodel

on-gridtrading ModelG4

localmicrogridtrading(off-grid)

ModelG5 Model� J1:P2Ptransactionwithinalimitedbuilding/flat/apartment

� J2:P2PtransactionusingchargedelectricityinEV

� J3:P2Ptransactionviaprivatelinewithinalimitedcommunity

Table2:ClassificationofP2PmodelsinGermanyandJapan

2.3 Preconditions,especiallydigitaltechnologyforP2Ptrading;statusofpreconditionsinbothcountries

ThissectionfocusesonpreconditionsrequiredforanimplementationofP2Ptrading,inparticulardigitaltechnology.SincePPAsarelessprerequisiteonthetechnologicallevel,theyarenegligiblehere.

2.3.1 Connectedloadmeters,e.g.smartmeters

Inadditiontodigitalvaluetransmissione.g.viablockchain,P2Pelectricitytradingalsorequiresthephysicalsupplyofelectricity.ThismeansthatinadditiontothedigitalnetworkingoftherespectiveproducersandconsumersviatheInternet,aphysicalconnectionmustalsobecreated.AccesstotheexistingpublicpowergridisthemostobviousoptionforfeedingandsupplyingP2Ptrading.

Inordertolinkthephysicalflowofelectricityandthedigitalprocessingoftradingtransactions,anintelligentmeasurementsystem,alsoknownasasmartmeter,consistingofameasuringdeviceforrecordingelectricalenergyandasmartmetergatewayforintegrationintothecommunicationnetwork,isthebestsolution.Thetraditionalconnectedloadmeters,whichhavebeenrequired



forgeneratorsandcustomersabove100MWh/yearinGermany,couldofcoursealsomeetthesecriteria.Thesmartmetermeasurestheexactgenerationandconsumptiondataofeachindividualnetworkparticipantatdefinedtimeintervals,whicharethendocumentedandsharedintheP2Pnetworkusingthesmartmetergateway.Inaddition,thesmartmetergatewayreceivesinformation(e.g.pricesignals)fromthenetworkandcanadaptdeliveryoptionsandmarketformsbasedonuserpreferences(cf.Kreuzburg2018:3f).

However,duetothedelayinsmartmeterroll-out,someoftheP2PpilotprojectsinGermanypresentedinchapter3nowalsoenableparticipationforstandardloadprofilecustomers.

Statusofsmartmeterroll-outinGermany

TheentryintoforceoftheMeteringAct(MsbG)inGermanyinSeptember2016triggeredsignificantchangesinmetering.TheActrequiresthecomprehensiverolloutofmodernmeteringequipmentandsmartmeteringsystems.WhereasinthepasthouseholdcustomersweremainlyequippedwithanalogueFerrarismeters,‘modernmeteringsystems’aredigitalmeters.However,modernmeteringsystemsdonottransmitanydata.Theywillbecalled‘intelligentmeteringsystems’,i.e.smartmeters,onlyiftheyareconnectedtoacommunicationunit(smartmetergateway)viaaninterface,enablingthemtotransmitthedatarecordedbythemeter.

Sincethebeginningof2017,thefirstmodernmeteringsystemshavebeenavailableinthemarketandhavebeeninstalledbythefirstmeteringoperatorsonalargescale.Ithasstillnotbeenpossibletostarttherolloutofsmartmeteringsystemsin2017,sincenoBSI-certifiedsmartmetergatewaysthathadbeencertifiedbythecompetentauthorityBSIwereyetavailableinthemarket.However,inlightofthestatutoryrequirementssetoutintheActandadvancesinmeteringtechnology,alarge-scaleroll-outofmodernmeteringequipmentandsmartmeteringsystemsisexpectedinthecomingyears(cf.Bundesnetzagentur/Bundeskartellamt2019).Intheendof2019,thethirdsmartmetergatewaymeetingthestrictdatasafetyrequirementswascertifiedbytheBSI.Thelegallydefinedpreconditionforthesmartmeterroll-outhasthereforenowbeenmet.Duringthespringof2020,theauthorityofficiallystatedthisfact.Sincethatdate,theconversiontoofsmartmetershasnowbeenmandatoryforconsumersusingmorethan6,000kWh/yrandforPVofCHPpowerplantsbetween7and100kWofcapacity(generatorsabove100kWhavebeenrequiredtouseatradtionalloadmeterwithacommunicationgatewaybefore).Thesethresholdswillbereducedbasedonregularanalysisofcost-effectiveness.Theaimistofinalizethesmartmeterroll-outby2032.

Statusofsmartmeterroll-outinJapan

The5thStrategicEnergyPlan,whichconsistsoftheprincipalnationalenergypolicies,decidedbythecabinetonJune2018,statesthatsmartmeterwillbeinstalledineveryhouseholdandofficethroughoutthecountrybythemid-2020sasabasisofimplementationofdemandresponseindomesticandbuildingsectorswithdynamicelectricityretailpricing.Thestrategicplanalsourgestheestablishmentofatechnicalfoundationtotransferinformationcollectedbysmartmeters



intoEMS(energymanagementsystems)equippedinhouseholdsandofficebuildings,andtoconnectbetweenEMSandindividualelectricityappliances.

Infact,aninstallationofsmartmeterbeganlongbeforethe5thstrategicenergyplan,aroundtheearly2010s,bythetraditional10electricityutilities,calledGeneralElectricUnities(hereafter,GEUs).Asaresult,bytheendof2016,allofelectricityconsumerswithacontractedpowerofmorethan50kW,whicharefactoriesandlargebuildingsrepresenting2/3ofelectricitydemandofthecountry,havebeenequippedwithsmartmeters.Fortherestofelectricityconsumerscontractedwithapoweroflessthan50kW,whoareaverylargenumberofhouseholdsandsmallbuildingsrepresenting1/3ofthenationalelectricitydemand,roll-outofsmartmetersisplannedtobecompletedduring2020intheTokyoarea,andby2022/23intherestofthewholenation.Asoftheendof2019,thetotalnumberofsmartmetersactuallyinstalledwasaround51.82millionwhichcovers63.7%ofthenumberofplannedsmartmetersinstalledinthecountry.Onceagain,thisvalueisexpectedtobe100%by2024.

Thebasicspecificationsofsmartmeterswerestandardizedin2011bythegovernment.Thestandardincludesgranularityofmonitoringdatasuchasevery30minutesofminimum0.1kWhofelectricitytwo-wayflowswithhighprecisionandrealtimetwo-wayconnection,conformingIECDLMS/COSEMstandards,andremoteswitchingcontrol.AconnectivitywithEMS,conformingEchonet-Litecommunicationstandard,isalsorequiredforeffectiveutilizationoftheinformationcollectedbyasmartmetertocontrolindividualelectricityappliances,EV,batteryandsolarPVasafunctionofdemandresponse.

Overall,inJapan,theroll-outofsmartmeterhasprogressedrightalongwiththenationalplan.Therefore,adigitalmeasurementsystem,whichistheminimuminfrastructurerequiredforP2Ptradingisexpectedtobecompleted,atleastinaphysicalbasis,withinthenext5years.Theremainingkeyissueisanestablishmentofanappropriatelegalframeworkhowtokeepprivacyofspecificinformationanddatacollectedfromindividualhouseholdsandoffices,whichisstillunderdiscussion.

2.3.2 Datatransmissionandhandling,andeconomictransactionsystem,suchasblockchain

ThesecondfunctiontobeperformedforP2Ptradingisthatofadigitalsystemfordatatransmissionandhandling,andimplementingtheeconomictransactionsassociatedwiththeP2Ptrading.BlockchaintechnologiesareoftenusedinP2Ptradingschemes,butothersystemsusingcentraldatabaseanddataprocessingtechnologiesandsoftwarewouldalsobefeasible,particularlyfortheapproachofacontrolledP2Pnetworkdiscussedinchapter2.2.Thedecentralizedautonomousapproachmayonlybefeasiblewithblockchaintechnologies.

TheResearchCentreforEnergyEconomics(ForschungsstellefürEnergiewirtschafte.V.)(FfE2018b:118etseqq.)identifiesthreebasicapplicationsofblockchaintechnologyinconnectionwithenergytrading:

1. Mappingofelectricityexchangeprocessesonablockchain(B2B)2. OTCtradingviablockchain(B2B)3. DecentralizedP2Ptradingviablockchain(C2C)



Here,wefocusonthethirdapplication,i.e.P2Ptrading.

Blockchaintechnologiesconsistofdecentrallydistributeddatabasestructures.Transactionsarecombinedindiscretetimesteps(blocks)andattachedtoprecedingblocks(seehereandinthefollowingFfE2018a:8ff).Duetotheconsensusmechanismused,thereisagreementonthevalidityandsequenceoftransactions.Manipulationandmisusecanthusbeprevented.

Whiletodayinmanycasescentralparties(e.g.energysuppliers)carryouttransactionsandstoretherecordsoncentralservers,theblockchaintechnologyoffersthepossibilitytocarryoutdecentralizedtransactionsdirectlybetweenequalusers("peers")withoutintermediaries.Theinformationabouttransactionscarriedoutisdistributedandstoredinaso-called"DistributedLedger"atalargenumberofparticipatingpartiesinsteadofbeingsavedincentraldatabases.Thecoreoftheblockchaintechnologyconsistsofcollectingtransactionsthathavetakenplacewithinacertainperiodoftimeandcombiningthemintoso-calledblocksthatrepresentthenetwork'sconsensusonthecorrectnessofthetransactionsandtheirsequence.Inordertoconfirmthecorrectnessandauthenticityoftransactionsintheblocksandtopreventtransactionsofthesametransactionobjectfromtakingplaceseveraltimes("doublespending"),eachblockchainrequiresaso-calledconsensusmechanism.Thisconfirmsthecorrectnessofthetransactionprocessesintheblockusingstandardizedprocedures(decentralized)and"chains"theconfirmedblocktothepreviousblock.Inthisway,aconstantlygrowingchainofblocks("blockchain")iscreatedovertime.Theblockchaincanbeviewedbyanyparticipantinthenetworkatanytimeandenablestransparentmonitoringofinteractionstakingplace.

Afurthercomponentoftheblockchaintechnologyistheoptiontostoreprogramsontheblockchainandtoletthemperformactivitiesautomatically.Theseso-calledSmartContractsenableahighdegreeofautomationbecause,forexample,businessprocessescanbemappedthroughthem.

Incombinationwiththedecentralizedautonomousapproach,blockchaintechnologypotentiallyleadstoaradicalchangeintheexistingtransactionsystemintheenergymarket.Insteadofanintermediary,ablockchainprotocolandtheconsensusmechanisminscribedinittakeoverthevalidationandloggingofthetransaction.ForP2Ptradingintheenergysector,thismeansthatinthesimplestcaseeachnetworkparticipantcanbeuniquelyidentifiedviaanindividual,publickey,whereasauthenticationtakesplaceviathesigningoftransactionsusingtheprivatekey.So-calledtokensarethenusedforvaluetransfer,whichassignadefinedvaluetotheirownerwithinthenetworkandcanideallybeexchangedforcryptocurrenciesorcentralbankmoney.BeforeaconsumercanobtainelectricityviatheP2Pnetwork,heorshemustfirstexchangecentralbankmoneyfortokensviaaplatform.ThesmartcontractcanthenbeusedtodefinethataP2Pdeliveryofelectricityisremuneratedwithacorrespondingnumberoftokens.Dependingonthetransactionamount,thetokensaretransferredfromtheconsumertotheP2Psupplier,whocantheneitherusethetokensitselftopurchaseelectricityfromtheP2Pnetworkorexchangethemforcentralbankmoney(cf.Kreuzburg2018:5f).



3 Experiencestodateandcurrentdevelopments/trendswithP2PtradingandPPAsinGermanyandJapan

3.1 ExamplesofP2PenergytradingservicesinGermanyAstudybytheGermanFederalNetworkAgency(Bundesnetzagentur2019)onthepotentialandchallengesofblockchaintechnologyanalysesvariousconceptualapproachesfortheuseofthistechnologyinthevariousstagesoftheenergyindustry'svaluechain.BasedondatafromthesectorassociationEDNABundesverbandEnergiemarkt&Kommunikatione.V.,35concreteblockchainpilotprojectswerebeingtestedinGermany’senergyindustryinJune2019.Themajorityofthesecanbeallocatedtothevaluechainstagesofgenerationandsales.Theseinclude,aboveall,P2Pneighborhoodmodelsandmicrogridsaswellasvariousprojectsinthefieldofcertificationof"green"and"regionalelectricity";alsotradableemissionandCO2products.Theremainingprojectsaremainlyintheareasofelectricitywholesale,e-mobilityandgridcongestionmanagement.

AselectionoftheexistingP2Ptradingprojectsandfull-scalebusinessmodelsinGermanyispresentedbelow.

3.1.1 Enyway

Thefirstandlargestcommercialpeer-to-peerenergyplatforminGermanybyitsownaccountistheonlinemarketplaceenyway(enyway.com).Asapartofitsbusinessmodel,enywaycurrentlyofferstwoproducts:ChangeandPower.Changeistoservetherealizationoflarge-scalesolarpowerplantsbeyondgovernmentsubsidies.Powermakesitpossibletopurchasegreenelectricitydirectlyfromproducersintheregion.

Thebasisforthisisablockchainsystemconsistingofamultitokenmodelandadigitalidentityregister(cf.hereandinthefollowingenyway2019).Themultitokenmodelenablestheredesignofcommonexchangerelationshipsandvaluestorage,whiletheregisterfordigitalidentitiesensurestheauthenticityandintegrityofactorsandassetswithintheblockchainsystem.

ImplementationofthePowerproduct

Inearly2020,around35electricityproducerswithatotalofaround20MWusedtheenywayplatformtoselltheirgeneratedelectricitydirectlytoelectricitycustomers,i.e.theelectricityproducersthusbecomeelectricitysuppliers.Theneedtoconverteverygenerator-supplierintoabalancinggroupresponsibleisavoidedbyorganizingtheseservicesfromanothersuppliers.enywayorapartnercompanyassumesresponsibilityforthebalancinggroup,thepreparationofforecastsforfeed-inandcustomerdemandaswellasmarketingsurpluspowerfortheproducers.Thecustomersoftheindividualenergysuppliersarestandardloadprofilecustomers(households,trade,agriculture,etc.).Thisis,hence,acontrolledandadecentralizedautonomousP2Ptradingmodel(modelG1),focusedonrenewableenergy,butwithafewelementsoftheG4model:thegeneratorsactassuppliersontheirownaccount.However,itisnotreallyP2Ptrading,asthegeneratorshaveatleast100kW,sincetheSmartMeterroll-outinGermanywasstillpendinguntil



veryrecently.OncesmallergeneratorsorprosumershaveSmartMeters,itcouldbeexpandedtotheseaswell.

Theelectricitypricesaredeterminedbythesellersthemselves.Whetherthispriceishigherorlowerthanthemonthlymarketvalue,towhichtheywouldbeentitledinclassicdirectmarketingviathepowerexchange,isthereforedeterminedbythefixedpriceandtheresultofthemonthlymarketvalue;asarule,however,thepriceachievableviaenywayishigher.Thepricesarecalculatedwithpostcodeprecisioninordertotakelocalnetworkchargesintoaccount.TheaveragepricesthattheproducerscanachievearehigherthanthoseoftheEEXbecausethefeesthatenywayandthebalancinggroupmanagerreceivearebelowthedistributionmarginoftraditionalsuppliers.Asarule,electricitypricesarecomparable/equaltothosefromthegreenelectricitysegment,butthereareregionaldifferencesinthepricingofcompetition(postalcodesharpnessvs.uniformtariffetc.).Alltaxes,chargesandleviescorrespondtothoseofatraditionalelectricitysupply.

Newelectricitysellerswhoareadmittedtothemarketplacedonotnecessarilyhavetohaveparticipatedindirectmarketingbeforehand,butitisadvantageousinsofarasthetechnicalpreconditionsfortheenywaytrading(remotecontrol,powermetersrecordingconsumptiondata,etc.)arealreadyinplace,andthereforenotechnicalconversionofthesystemisnecessary.

ImplementationoftheChangeproduct:AssetSharing

TheproductChangeisdesignedtomakeassetsharingpossible.Change(1)offerstheopportunitytoparticipateintheconstructionofarenewableenergysystem;startingfromasmalltwo-digitinvestmentsumforapieceofasolarsystem,e.g.thesizeofapizzabox,and(2)topurchasetheparticipant’sentireelectricitydemandatthepurchaseprice.Byfractionationoftheplantintodifferentpackagesizes,aparticipationfordifferentneedsandbudgetsshouldbepossible.

Asmuchaspossibleoftheownelectricitydemandiscovereddirectlyfromtheownsolarplant,therestisfilledupbycertifiedgreenelectricity.Togetherwiththeotherinvestor-consumers,large-scalesolarplantsaretobesetupandoperatedinthiswayatlowcost,independentoflargecompanies.ThejointlyerectedsolarplantismadepossiblebyallparticipantsandwithoutEEGsubsidies.

Theblockchaintechnologyhelpstoclearlyallocatethesystemsharestothecustomersandpreventssharesfrombeingdistributedtwice.Thisway,forgery-proofandtransparentdocumentationisprovidedofwhoisentitledtowhichsolaryield.

Basedonthemultitokenmodelpresentedbelowandtheregisterfordigitalidentities,thisisthefirstproductiveapplicationonenyway'sblockchainsystem:thetokenizationofareal-worldasset.Inthefirstprojectunderthisproductline,asolarPVplantwillbebuilt.Onanareaof7308.12m2,asolarplantwithacapacityof1282.38kWpandanexpectedyieldof1003kWh/kWpisplanned;withouttakingadvantageoffinancialsupportthroughFIPfromtheEEG.Inaddition,theassetsharingapplicationcanpotentiallybeusedfordifferentassets.



Contractsandtransactions:Themultitokenmodel

Themultitokenmodelofenywayconsistsoffivetokens,whichrepresentdifferentcharacteristicsofvaluesandshouldenablethecleardocumentationofthevaluetransferandthusthevaluechain.Thetokenscanbedividedintothetwocategories:SecurityTokenandUtilityToken.ThesecuritytokensareonlyrelevantfortheChangeproductandcomprisethetokensOwnership,UseandInvestandarethedigitalimageofanexistingassetintherealworld.Theyrepresentdifferentrightsassociatedwiththeasset(usagerights,ownershiprights,righttoprofitsharing).Utilitytokensserveasameansofoperatingtheplatform'sprocesses;inconcreteterms,thesearecurrencyandpowerutilitytokens,whichrepresenttheflowsofcurrencyandenergyquantities.

BlockchainSecurityToken UtilityToken

AssetSmartContractCurrencySmartContract

PowerSmartContract

OwnershipTokenàDeedofOwnership;Rightofco-determination

InvestTokenàgeneratereturnsforinvestments

UseTokenàRighttousetheproduct

CurrencyTokenàCreditnoteforpurchaseofproducts

PowerUtilityTokenàProofofelectricityoriginandquantity

Table3:LevelsoftheMultitoken-Modell(Source:enyway2019:9)

Thefinancingofanassetdoesnothavetobedoneviaacertaintypeoftoken,acombinationofthedifferentmodelsisalsopossible.Forexample,partoftheassetcanbefinancedviaownershiptokensandanotherpartviacrowdfinancingviaaloan,i.e.aninvesttoken.

Theownershiptokensdefinedbyenywayempowertheholderstotakeadvantageoftheassetintherealworld,butalsocontainobligations.Thetokenservesasthebasisforaclearallocation,e.g.whichco-ownerisentitledtowhichincomefromarenewableassetorinwhichproportionthemaintenanceofthatassetmustbecarriedout.TheOwnershipTokenallowsanindividualandcomprehensibleassignability,aswellasthestorageoffurtherpossession-relevantinformation.

ThesecondtokenintroducedbyenywayistheUseToken.Thisallowstheholderstoparticipateintheproceedsofanassetfromtherealworld.Holdersthereforedonotowntheassetandcanthereforeatmosttransfertheclaimtotheproceedsoftheassettothirdparties.Therearenoobligationsfortheholderofthetoken.Duetoitsstructure,importantinformationonuseiscontaineddirectlyintheUseToken.Thisincludes,forexample,datasuchastheusefullife,termsofuseandoutputalreadygenerated.

AnothercomponentoftheplatformistheInvestToken.Thepurchaseofthesetokensenablesthefinancingofaninvestmentthroughaloan.Inreturn,theownerofthetokenisentitledtopre-determinedreturns.Theownerofthistokendoesnotowntheassetandcanthereforetransfertheclaimtothefixedreturntoathirdparty.Aflexibleparticipationintheproceedsoftheassetdoesnotexistduetothefixeddefinitionofthereturn.Ontheonehand,thisoffersgreatersecurityfortheownerofthetoken,ontheotherhanditlimitsthechanceofparticipatinginhigherprofits.Theinvesttokenformsexchangeableabsoluteshares,whilethemaximumnumberoftokensperassetiseitherfixedorvariable.Thelatteralsomakesitpossibletorepresentsubsequentcapitalincreases.



enywayhasintroducedthecurrencytokentomappaymentflowsontheplatform.Togetherwithclassicalpaymentmethods,thisformstheeconomicbasisfortheenywaymarketplace.Thecurrencytokenisimplementedasastablecoin.Asastablecoin,thetokenislinkedtothevalueofafiatcurrency,theeuro,andisthusstableinvalueatalltimes.Thefactthatthecurrencyisatokenontheblockchaindoesnotinvolveanyadditionaleffortfortheenduseroftheplatform.Allpaymentsontheplatformaredisplayedasiftheyweremadedirectlyineuros.Onlyinthebackground,therespectivetransactionisfixedintheblockchainwiththehelpofthecurrencytokenandthusremainstransparentandtamper-proof.Anyformofrevenuefromthevariousproductsiscreditedtotheusersascreditontheplatform.Thiscreditisdisplayedintheblockchainascurrencytokencredit,butisdisplayedtotheuseraseuroontheuserinterface.Theplatformcreditcanbeusede.g.fortheownelectricitycontract,newinvestmentsandthepurchaseofarticlesonaperspectiveenywaymarketplace.Inaddition,thereistheoptiontowithdrawtheaccumulatedcredit.Thecreditisnottransferablebetweensingleparticipantswithoutconsiderationlikethepurchaseofaproductoraservice.

ThePowerUtilityTokenwasdefinedasavirtualunitofelectricityquantitiesontheplatform,whichrepresentstheexchangeofelectricityontheblockchain.Atokenrepresentsafixedpowerunit,e.g.awattsecond(Ws).Thetokensaregeneratedforpowergenerationanddevaluedforpowerconsumption.Thecreationofthetokensisbasedontheinputofrealdatafromagenerationplant,whichpassesthedataontotheblockchainviaadirectcommunicationunitoftheintelligentelectricitymeter.EachPowerUtilityTokencarriesasignatureofthegenerationplant,whichcanbeusedtoprovetheoriginoftheelectricityinacounterfeit-proofmanner.Incombinationwiththeregisterfordigitalidentities,thepowerutilitytokenscanbeassignedatanytimeandprovideinformationonitemssuchasenergysource,planttype,placeofgenerationandtheageoftheplant.Thisdatabasisenablestheimplementationofmanyapplicationcases,suchasproofoforigin,thepowercommunityandtheP2Pmarket.Inregulartimeunits,tokensofthegeneratedenergyquantityaregeneratedbythegenerationplant.Thesetokensarethentransferredtotherespectiveelectricityconsumerinordertomaptheelectricitysupply.

DigitalIdentities

Howcanactorsontheblockchainbeunambiguouslyidentifiedandtheirauthenticityensured,sothattheiranonymitycanbemaintained,whilethereisstillunambiguity?

enyway'ssolutionisbasedonahybridmasterdataregisterforidentitymanagement,consistingofdifferentlevelsofdatamanagement.Thefirstlevelispubliclyvisibleandcontains,e.g.foragenerationplant,metadataoftheplantaswellastheapproximatelocation(postalcode).Onthesecondlevel,additionalpersonaldataisstored,whichcanbeusedfortheexecutionofapplications,e.g.thecorrespondingSmartContract.Thelastlevelcontainssensitivepersonaldata,whichisexclusivelymanagedbyenyway.Theyarenecessarytohandlevalue-addedservices,marketcommunicationandotherprocesses.

Inconnectionwithanindividual,publickeyontheblockchain,theidentityregisterformsthebasisfortheunambiguousidentificationofactors(e.g.persons,productionplants,etc.).Inordertoguaranteedatasecurityandanonymity,thepublickeysoftheactorskeepchanging.Thusitisnot



possibleforuninvolvedpartiestodrawconclusionsabouttheidentityofapersonandtheiractivityintheenywayecosystem.

Accesstothevariouslevelsoftheidentityregisterisorganizedviaaread-onlysystem.Fortheexecutionofsomeapplications,theaccesstospecificinformationoftheindividuallevelsisnecessary.AnauthorizedSmartContract,whichtriggersthecreationofaplantspecificproofoforigin,forexample,isfedbytherelevantdatafromtheregister.

Dataprotection

InordertofiledatainaccordancewiththeEU’sGeneralDataProtectionRegulation(GDPR),twodifferentmethodsareusedforstoringdocuments.Publicdocuments,suchasgeneraltermsandconditions,arestoredforeveryonetoaccessonanIPFS(InterPlanetaryFileSystem),adecentralizedfilesystem.Documentswithpersonalinformation,ontheotherhand,aresecurelystoredatacentrallocation.OnlyahashvalueispubliclystoredinIPFS.Thisensuresthatthecontractcannotbechangedandpreventsprivateinformationfrombeingpubliclyviewed.Theassignmenttoanidentifiablepersontakesplaceinsecuredsystemsofenyway,whereitcanbedeletedwithoutleavingatrace.

3.1.2 LitionEnergy

Lition(cf.www.lithion.de)isaP2Penergytradingplatformthatconnects,asanexampleforModelG1andsimilartoenyway’sproductPower,cleanenergyproducersandsuppliersdirectlywithendusersontheblockchain.LitionlaunchedanenergyexchangedAppinApril2018,andserveacustomerbasespanningover100citiesinGermany.Onceauserfindstheenergytheywanttobuy,theymakeapaymentinEurostoLition.Theblockchaintechnologytakesover,simplifyingtheprocessofbuyingenergydirectlyfromgreenproducersofanyscalebyemployingtransparentsmartcontractsthatallowconsumerstocircumventthecomplexityoftraditionalutilitycompanies.Thecustomerthenautomaticallygetstheirenergy.Accordingtotheirowninformation,Litionissavingcustomersanaverageof20percentontheirutilitybills,andpowerplantsareseeingincreasedrevenuesofupto30percent(cf.https://www.disruptordaily.com/blockchain-energy-use-case-lition/).Thesenumbersshouldprobablybetakenwithcaution.Customersgettochoosetheirgreenenergyfromwind,solarandbiomass,andtheirpreferredprovider.TheenergyisdeliveredautomaticallyonceprocessedandbilledinEuros.

Asalicensedelectricitysupplier,thebusinessmodelissimple:Litionearnsmoneybysellingelectricityandofferingcustomersfairpricesthroughprocessefficiencies.Throughthedirectconnectiontotheconsumers,renewableenergyproviderscanbestrengthenedandtheycanachievehighermarginsthaninthetraditionalmarketcontext.Consumers,ontheotherhand,havetheoptionofchoosingtheirownregionalelectricityprovider.

Producersmakesalesoffersandcustomerscanchoosefromtheseoffersand,forexample,choosethenearestregionalsupplier.Litionwillhandletheentireprocess.Ittakescareofmarketpartnercommunication,billingandmanagementofsupplierswitching,andthecallcenter.



LitionprovidestheBlockchaintechnologyandenablestransactionsdirectlybetweencustomersandproducersviasmartcontracts.LitioniscurrentlystillrunningontheopensourceEthereumblockchain,butiscurrentlydevelopingitsownblockchainsoftwaretogetherwithSAP.

3.1.3 WSWTal.Markt

SinceJanuary2018,Wuppertal'smunicipalutilities(WSW)havebeenofferingP2Penergytradingwiththeir"Tal.Markt"(“valleymarket”)platform(cf.https://talmarkt.wsw-online.deaswellasGJETC2019).Here,too,customerscancompiletheirownelectricitymixandpurchaseitdirectlyfromtheproducer.WuppertalerStadtwerkeactastheoperatorofthetradingplatformandasthebalancinggroupresponsible,andarethusresponsiblefortheformalaspects.Inaddition,theyensureenergysupplyintheeventofsupplynotmatchingdemand.ThisisthereforeanexampleofthecontrolledregionalP2Ptradingapproach,asitischaracterizedinModelG2.Inordertooptimallycoverindividualelectricityconsumptionwiththegreenelectricityoffered,inthefirstphaseintelligentelectricitymeterswereplannedtobeinstalledatallcustomers.

Forthevirtualinfrastructure,WuppertalerStadtwerkecooperateswiththeSwisscompanyAxpo,whichdevelopedtheP2PplatformElblox.

Tal.Markt2.0

Since2019,theBlockchainplatformhasbeenfurtherdifferentiatedandextendedtoneighboringdistricts.Therearealsoeffortstorollouttheconceptnationwide:TogetherwiththemunicipalutilitiesfromBremen,HalleandTrier,theWuppertalmunicipalutilitieshavefoundedthetradingplatform"Blockwerke".EachpartnercanbuildtheirownbusinessmodelsonthebasisoftheplatformdevelopedinWuppertal,orusetheTal.Marktplatformfortheirownmarketasa‘whitelabel’productwithlocalgreenelectricityproducers.Inaddition,theplatformrepresentsacentralmarketplaceforproducers.Inpracticalterms,thismeansthatanyproducerregisteredon"Blockwerke"cansupplyallconnectedmarkets.

Tal.Markt2.0isthereforeplannedintwovariants:Abasicvariant,whichcanbeinvoicedusingtraditionalmetersandnationwidebycomparingtheindividualgreenelectricityorderwiththestandardloadprofile;andwithinaradiusofaround50kmofWuppertal,the"Tal.Markt.Live"variant,whichprovidesforreal-timeinvoicing,onceasmartmeterhasbeeninstalled.Theblockchaincapacitieswerealsoimprovedto20,000transactionspersecond(ea.nrw2020).Asofearly2020,morethanadozenelectricitygeneratorswereofferingpoweronTal.Markt(WSW2020).

3.1.4 RegHEE–Regionaltradingofelectricityfromrenewableenergysourcesandpowerlabelingonablockchainplatform

AnotherexampleforacontrolledregionalP2PnetworkandtheG2modelistheRegHEEproject.TheenergysupplycompanyThügaandtheTechnicalUniversityofMunichstartedtheRegHEEprojecttogetherwithregionalenergysuppliersinMarch2019(https://www.thuega.de/pressemitteilungen/blockchain-forschung-ermoeglicht-regionalen-energiehandel-bayerisches-wirtschaftsministerium-foerdert-forschungsprojekt/).Theaimofthisprojectistoresearch,developandestablishapeer-to-peerenergymarketfordecentralized



generationandstorageunitsbasedonablockchainthatatthesametimeclearlyidentifiestheelectricitytraded.Forthispurpose,availableblockchainapproachesarefirstanalyzedandevaluatedandaconceptforthearchitectureofthesystemisdeveloped.SmartContractsarethendeveloped,whichrepresentanautomatedmarketplacefordirectexchangebetweenprosumersandfinalconsumersandcomplywithenergyindustryandregulatoryrequirements.Acentralizedtradingsystemforcomparisonwillalsobedesignedandimplemented.Bothsystemswillbeoperatedwithinthescopeofafieldtestandthensubjectedtoacomparativeevaluation,fromwhichrecommendationsforactionwillbederived.

Thetradingplatformtobedeveloped,inwhichallparticipantscanbebothproducersandconsumersofenergy,isinprincipleopentoallconceivableproducers,suchasphotovoltaicsystems,combinedheatandpowerplantsorevenwindturbinesofcitizenenergycooperatives.Thepricefortheelectricityismadeupoftheproductionpriceplusatradingmargin.Theamountofelectricityproducedisfedintothelocalgrid,whileintelligentmeteringsystemsrecordtheelectricityquantitiesandpostthemontheplatform.Anyonewishingtopurchaseelectricityviathisplatformspecifiesamaximumpriceastheupperlimit.Iftheelectricitypriceofferedbytheconnectedgeneratorsisabovethispersonallimit,supra-regionalelectricityispurchasedfromthegeneralelectricitygridinstead.

3.1.5 AllgäuMicrogrid

Since2015,SiemenshasbeencooperatingwiththeU.S.companyLO3.Thecooperationfocusesonthedevelopmentof‘virtualmicrogrids’,i.e.localvirtuallyself-sufficientcommunitiesofgeneratorsandprosumersinapowergrid,inordertopromotelocalenergytradingonablockchainbasis.OnepilotprojectinthiscooperationistheAllgäuMicrogrid(https://www.auew.de/privatkunden/allgaeu-microgrid/).ThiscontrolledregionalP2Pnetworkmodelisverysimilartothetwopreviousexamplespresentedabove(ModelG2).Althoughitcallsitselfavirtualmicrogrid,itisinfactanon-gridmodel.

ThecommunitymicrogridprojectintheAllgäuregioninBavaria,beingexecutedinpartnershipwiththelocalenergysupplierAllgäuerÜberlandwerkGmbH,willinitiallybeashort-runproofofconcept,withsomeprosumersselectedtoparticipateinavirtualmicrogrid.Theprojectisdesignedtodemonstratehowseamlesslydistributedenergyandvirtualmicrogridsolutionscanfitintoexistingnetworks—lettingprosumersandconsumersrealizethebenefitsofalocalizedenergymarketplace—andtoestablishthelevelofinterestregionalconsumershaveinknowingtheoriginsoftheirenergy,andpayingforcleanlocalenergy.LO3EnergyandAllgäuerÜberlandwerkarecollaboratingontheprojectwiththeaimofgatheringvaluableinformationontheviabilityofavirtuallocalcommunitymicrogrid,thenrefininganeffectivemodelbasedonthatinformationandultimatelydeployingapermanentvirtualmicrogridintheAllgäuregion.

3.2 ExamplesforP2PinJapanInthissection,severalexamplesforP2PinJapanareintroducedbyreferringtothecategorizationshowninthesection2.2.Alloftheexamplespresentedherearedemonstrationprojects.Therefore,tangibleresultsarenotyetavailable.



3.2.1 UrawamisonoProject2

AsanexampleofModelJ3ofP2Ptransaction,itisworthnotingthatthetrialprojectincollaborationwiththeUniversityofTokyoandtheDigitalGridCorporation,thestart-upcompanyestablishedin2017,waslaunchedintheUrawamisonodistrict.

Inthisdistrict,themunicipalityestablishedaprivatelinetoconnectseveralhouseholdsandhasdemonstratedtherealtimeP2Ptransactionusingtheblockchaintechnology.ThetypeoftheblockchainplatformappliedinthisprojectisEthereum,whichenablestoestablishthesmartcontract.Inthesmartcontract,thematchingmechanismoftheprojectisembedded,sotheactorsinchargeoftheP2Ptransactionregistertheirsellorbuyorderaccordingly.Theactualelectricitytransactionisrealizedincasetheregisteredordersarematched.Thewaytomatchordersisdiscriminatorypricingmethod.

TheconsensusalgorithmforthisprojectisProofofAuthority(PoA),inwhichtransactionsarevalidatedonlybytheapprovedparticipants.ThebiggestcharacteristicofPoAisthattheconsensusisrealizedinaspeedymannercomparedwithotheralgorithms.SincetherealtimeP2Ptransactionrequiresthespeedyconsensus,PoAwasselectforthisproject.

Foreachhouseholdparticipatinginthistrialproject,5.3kWofsolarPV,12kWhofstoragebattery,aDigitalGridController(DGC)andaDigitalGridRouter(DGR)aremounted.TheDGCisasmartcontrollerdevelopedbytheDigitalGridCorporation,whichestimatestheelectricitydemandofhouseholdsbasedonthepastrecordsandautomaticallyconductsthebuyandsellorder.TheDGRperformspowercontrolnecessaryforpowerinterchange,whichisalsodevelopedbytheDigitalGridCorporation.

CombiningtheDGCandDGRwithsolarPVandstoragebattery,theUrawamisonoprojecthasbeendemonstratingrealtimeP2Ptransactionsusingtheblockchaintechnology.

3.2.2 KEPCO(KansaiElectricPowerCo.)

RegardingtheModelJ4ofP2Ptransactions,thetrialprojectbyKEPCOandPowerLedger,anAustralianenergytechnologycompanyestablishedin2016,isagoodexample.

AtthesiteofKEPCOinOsaka,thesurpluselectricitygeneratedbytheprosumersissenttootherconsumers,andtheP2PtransactionbetweenthemisdemonstratedbasedontheplatformdevelopedbythePowerLedger.

PowerLedgerusesblockchaintechnologytoenableenergytrading,renewableassetfinancingandefficientcarbonandrenewableenergycreditmarkets(PowerLedger,2019).Itprovidesamarkettradingmechanismforresidentialandcommercialbusinessestodecidewhomtheywanttoselltheirsurplusenergytoandatwhatprice(Pimentel,2018).Underthisplatform,KEPCOsharesmeterdatafromparticipants,andPowerLedgerprovidesKEPCOaccesstoitstradingplatformtofacilitateandmonitorenergytradingbetweenprosumersandconsumers.

2Thissub-sectionlargelyreferstoTanaka(2019).



Theaimofthisprojectistoprovidethecommunitywithcheappowerandcreatethemechanismtosellandbuytheelectricityamongtheactorsofthecommunity.Inthefuture,KEPCOintendstobuildavirtualpowerplanttosupportthelocalenergydemands.

SinceKEPCOplaystheroleofplatformprovider,thisschemeisalreadypossibleundertheJapaneseElectricityBusinessAct;however,therearestillsomeissuestobeconsidered,suchasthegridchargesandtherequirementunderthemeasurementlaw.

3.2.3 MinnaDenryoku

AnotherexampleofModelJ4ofP2PtransactionistheprojectdemonstratedbyMinnaDenryokuCorporation.IncontrasttotheaboveKEPCOproject,thisprojectfocusesmoreonanaccuratetrackingoftheelectricitygeneratedfromrenewablepowerplantstofinalconsumersforprovidingGoO(GuaranteeofOrigin)employingblockchaintechnology,whileanaspectofP2P,whichisbilateraltwo-waytradingbetweenprosumersandprosumers,isnotmuchemphasizedatpresent.Therenewablepowerproducerswhoparticipatearemainlymediumtolargesize,specifically300kWto10MW,ofsolarPV,onshorewindandsolidbiomass,andthefinalconsumersarelargecommercialbuildings/factorieswhoareseekingdirectprocurementofrenewableelectricitytomeettheRE100targetsforinstance.

MinnaDenryoku3Corporationisanenergyinnovationventurecompanyestablishedin2011whohasdevelopedanelectricitytrackingsystemwithblockchaincalledELECTION2.0.Inthesystem,tokensareallocatedcorrespondingtotheelectricitygeneratedfromrenewables,whicharere-allocatedtotheconsumerscorrespondingtotheamountoftherenewableelectricityconsumedwithinthebalancinggroupofMinnaDenryokuwhoalsoactsasanelectricityretailer.Theblockchain-basedsystemusesaplatformofNEMcryptocurrency,whichisopentopublic.

Thesystemmakesitpossibletoidentifytheproducersofrenewableenergyandtracetheoriginoftheelectricity.ThisisintendedtoattractcompanieswithastrongawarenessofESGinvestmentandRE100aswellasindividualsandsmall-scaleconsumerswhoaremotivatedtopurchaserenewableenergy.

OnSeptember2018,severalproducersandconsumersinthesamebalancinggroupofMinnaDenryokuparticipatedintheprojecttodemonstratethematchingbetweendemandandsupplyin30minutesunit(MinnaDenryoku,2018).Theexecutionresultsarerecordedontheblockchain-basedsystem,whichenablestocertificatetheoriginandtheamountoftheelectricity.

Havinggainedthepositiveoutcomefromthedemonstrationproject,MinnaDenryokuhasopenedthepowerpoolplatformcalled“ENECTPowerPool”basedontheELECTION2.0onacommercialscale.Approximately300MWrenewableenergyhasalreadybeenparticipatedinthisplatformasofJuly2019,andanadditional200MWwereexpectedtojoinuntilMarch2020(Miyake,2019).

3“Denryoku”means“electricity”inJapanese.



3.3 ExamplesforPPAsinGermany

3.3.1 Innogyandvariouscustomers

OnesupplierofPPAsontheGermanmarketisInnogy.Aspartofitsbusinessmodel,InnogyofferscorporatePPAs,i.e.long-termsupplycontractsbetweencompaniesandInnogyastheelectricitygenerator(cf.hereandinthefollowinghttps://iam.innogy.com/ueber-innogy/innogy-innovation-technik/erneuerbare-energien/power-purchase-agreements/ppa-detail).Duringtheterm,Innogysuppliescustomerswithgreenenergyatafixedpriceandinvestsinrenewableenergypowerplantstogeneratethatpower.Theseplantswillusuallybebuiltatasiteoflowgenerationcost,butcouldalsobeonthecustomer’spremises.

Potentialcustomerscanchoosebetweenphysicalandvirtual/financialPPAs.ForphysicalPPAs,thecontracttermisfixedatfiveormoreyears.ThisisimplementedeitherasadirectPPAorasasleevedPPA.WiththedirectPPA,thecompanyobtainsitselectricityphysicallydirectlyfromthegenerator(Innogy),whoproducestheenergyspecificallyforthispurpose.Inthiscase,thegeneratornotonlyinvestsinnewplants,butalsocoverstheentiresupplychain,thusbecomingafull-serviceproviderandtakingoverthesupply.WithasleevedPPA,thegeneratorproduceselectricityatafixedpriceandfeedsitintothegrid.Inthisconstellation,anothercompanytakesoverthesupplyandtaskssuchasmakingloadforecastsorprovidingbalancingenergy.

VirtualPPAsarepurelyfinancialproductsthatdonotincludethephysicalsupplyofenergy.Innogydistinguishesbetweenaprice-guaranteedagreement,inwhichabasepriceisagreedforacertainperiodandthedeviationfromthemarketpriceiscompensatedeitherbytheelectricitysupplierorbytheelectricitycustomer;andthecertificatepurchaseagreement,inwhichonlythecertificatesoforiginoftheelectricityaresoldatacertainpriceoverthelongtermandarenotlinkedtotheelectricityprice.

3.3.2 Mercedes-BenzandStatkraft

Since2018,theNorwegianenergysupplierStatkrafthasbeensupplyingMercedesBenzwithrenewableelectricityfromatotalofsixcitizenwindfarms;thisisalsostipulatedbyaPPA(https://www.statkraft.de/presse/News/news-archiv/2018/daimler-und-statkraft/andhttps://www.statkraft.de/presse/Pressemitteilungen/Pressemitteilungen-archiv/2018/daimler/).StatkraftiscontributingexperiencefromalloverEuropeinthefieldofPPA.

InSeptember2018,StatkraftconcludedthefirstwindPPAinGermanywithsixcitizenwindfarmsinLowerSaxony.Theindividualcontractshavetermsofthreetofiveyearsandtheelectricitygeneratedthereisintendedtosupplyindustrialcompanies.Theprojectcomprises31windturbineswithatotalinstalledcapacityof46MWandgeneratesapprox.74GWhperyear.

From2021Mercedes-BenzCarswillpurchasethiselectricitytosupplyitsproductionsitefortheEQCelectriccarinBremenandtheGermanbatterysitesinKamenzandStuttgart.ThesupplyofelectricityfromthewindfarmswillbeintegratedintotheexistingpowersupplytoMercedes-BenzCarsbyEnovosEnergieDeutschlandGmbH.Enovosisresponsibleforbilling,gridusageandtheintegrationofthegreenelectricityvolumesintothepowersupplyportfolioofthecarmanufacturer’splants.



ThegreenelectricitygeneratedinthewindfarmswillbefedintothegridafterthecontractcomesintoforceandsimultaneouslyremovedfromthegridbytheMercedes-Benzplants.ThepowersupplyisstaggeredaccordingtothedifferentendoftheEEG(FITlaw)supportfortheindividualplants:33.1GWhareplannedfor2021,74GWhfor2022to2024and21.8GWhfor2025.

3.3.3 StatkraftandEnerparc

InadditiontothePPAwithMercedes-Benz,StatkraftannouncedinDecember2019thatithadenteredintoalong-termpowerpurchaseagreementwithEnerparctoimplementfivesubsidy-freesolarprojectsinBavaria(cf.https://www.statkraft.de/presse/Pressemitteilungen/2019/statkraft-und-enerparc-schlieben-langfristigen-stromabnahmevertrag-zur-realisierung-von-funf-forderungsfreien-solarparkprojekten-in-bayern/).

ThecontractwithEnerparcasaspecialistforthedevelopment,constructionandoperationoflarge-scalesolarpowerplantsprovidesforatermof12years.Thesolarparkshaveaninstalledcapacityofapprox.52MWpandStatkraftintendstodrawatotalofaround600GWhofelectricityfromthemfromMay2020toDecember2031.Commissioningisplannedforspring2020.Enerparcisresponsiblefordevelopment,constructionandoperation.Sunnic,thedirectmarketingsubsidiaryofEnerparc,isresponsibleforshort-termmarketingonthespotmarket.Statkraftplanstousetheelectricityforthestructuredsupplyofindustrialcompanies.

3.3.4 GreenpeaceEnergy

GreenpeaceEnergy,agreenpowersupplier,hasconcludedaPPAwithWindparkEllhöftGmbHundCo.KGtoenablethecontinuedeconomicoperationoftheEllhöftwindfarminnorthernGermanyaftertheendofEEGfundingandsellthegreenpowertoitsretailcustomers.Thecontractforthesupplyofelectricityfromsixwindturbineswithacapacityof1.3megawattseachwillcomeintoforcein2021andissettorunforfiveyears.Theagreedfixedpriceperkilowatthourcanbeadjustedduringthetermofthecontractifwholesalepowermarketpricesriseaboveorfallbelowcertainthresholds.RisksandbenefitsaresharedbetweenGreenpeaceEnergyandthewindfarmoperator.

3.3.5 EnBWandEnergiekontor

EnBwEnergieBaden-WürttembergAGandEnergiekontorAGhaveconcludedaPPAforanewsolarparkeastofRostockinNorth-EasternGermany;installedcapacitywillbeapproximately85MWandisexpectedtoproduce88GWhofelectricityannually(cf.https://www.enbw.com/unternehmen/investoren/news-und-publikationen/investorennachrichten/presse-detailseite_203904.html).TheagreementstipulatesthatEnBWwillpurchase100percentoftheelectricityatafixedprice.Withintheagreedcontractperiodof15years,thetwocompaniesassumethatthetotalamountofelectricityproducedwillbearound1.3terawatthours.



Energiekontorwillimplementtheprojecton120hectaresofagriculturallandinthecityofMarlowandthemunicipalityofDettmannsdorf.Thecommissioningofthesolarparkisscheduledfortheendof2020.

3.3.6 OverallPPAmarketdevelopment

Overall,itcanbestatedthatPPAisstillanichephenomenoninGermanyandthatthereareonlyafewpracticalexamplesontheGermanmarket;especiallyincomparisontotheglobalorEuropeanmarket(seefigure1andtable3).However,thismaysoonchangedramaticallywith1)theendoftheFITpaymentsforanincreasingnumberofwindandPVpowerplantsfromJanuary2021;and2)duetothefactthatitiscurrentlyalreadyeconomicallyattractivetobuildlarge-scalePVpowerplantswithoutFIP/MPremuneration,i.e.withoutparticipatinginauctions.

Figure5:GlobalcorporatePPAvolumes,byregion(Source:ownpresentationbasedonBloombergNEF2019)

WindOnshore WindOffshore SolarGreatBritain 333 860 367Scandinavia 4.095 600 Poland 45 Germany 65 Netherlands 548 68Ireland 78 Spain 1.661France 41 Italy 693 Table4:PPAinEurope(End2018),cumulatedinMW(Source:ownpresentationbasedonEnergyBrainpool2019)



InviewofdevelopmentsandEuropeandtherestoftheworld,itisthereforelikelythatPPAswillalsobecomeincreasinglyimportantinGermanyinthefuture,especiallyagainstthebackgroundofthephasingoutofEEGfunding.ThisassessmentisalsoconfirmedbythePPABarometerfromEnergie&Management;31companiesfromthefieldsofenergysupply,directmarketing,projectdevelopmentandplantoperationtookpartinthesurvey:

Figure6:AssessmentsofPPAinGermany(owngraphic;Source:E&M2019)

3.4 ExamplesofPPAsinJapan

3.4.1 Generalsituation

ThesituationsurroundingPPAsinJapanhasbeenratherdifferentfromthecaseofGermany.Inshort,PPAshavenotbeenwidelyemployedasmuchasGermany.AprimaryreasonofthisdifferenceisthegenerousFITpricesgivenforsolarPVsothatuntilveryrecently,theFITschemewastooattractiveforrenewableelectricityproducerstoconsiderPPAs.

Before2018,FITwasappliedtoallofsolarPVprojectsoflessthan2MW4whichcurrentlyoccupy98%ofthetotalnumberand46%ofthetotalcapacityofsolarPVprojectsimplementedinthecountry,withFITpricesofJPY18(USD0.16)/kWhfor2018,JPY21(USD0.19)/kWhfor2017andJPY24(USD0.22)/kWhfor2016.TheFITpricesweresetatamoreinflatedlevelforresidentialsolarPVprojectsoflessthan10kWandwereJPY26(USD0.24)/kWhfor2018,JPY28(USD

4Before2017,eventhisthresholddidnotexisti.e.FITcouldbeapplicabletoanyofsolarPVprojectsincludingmorethan2MW.

53%

29%

18%

WhichofthefollowingassessmentsofPPAdoyouagreewith?

PPAareacentraldriverofthenextdecade

Wewillsee;atthemomentitisstilltoearlyforanevaluation

PPAareanoverratedtrendtopic



0.25)/kWhfor2017andJPY31(USD0.28)/kWhfor2016.EvenhigherFITpriceshaveappliedtootherrenewablesthanthoseforsolarPV.

TheseFITpricesweremuchhigherthantheretailelectricitypriceswhicharearoundJPY16(USD0.15)/kWhfortheindustrialsectorandJPY25(USD0.23)/kWhfortheresidentialsector.UndersuchagenerousFITscheme,renewableelectricityproducersweregivenlittleincentivetoselltheelectricitydirectlytofinalusersviaPPAsoruseitfortheirownconsumption,butanenormousincentivetosellittothegridasmuchaspossibletheycantomaximizetheirprofit.Asaresult,fewexamplesofPPAhavebeenfoundinJapanwhere,inconverse,PPAoptionswereunavailableforfinalconsumerswhoseriouslyseekrenewableelectricity,likeRE100partnershiporganizations,formanyyears.

ThisratherpeculiarcircumstanceinJapan,however,hasgraduallychangedrecently.TheFIPforanysolarPVplantsofmorethan500kWarenowsetbycompetitiveauctionaftermid-2019andthethresholdof500kWwillbeevenlowerdownto100kWafter2020.ThelatestauctionforsolarPVmorethan500KW,takenplaceinAugust2019,broughtaboutanaveragecontractpriceofJPY12.98(USD0.12)/kWhwiththelowesteversolarPVpriceofJPY10.50(USD0.095)/kWh.TheserecentcontractpricesrevealedbytheauctionimplythatsolarPVcanproduceelectricityatacostfarlessthantheretailpricefortheindustrialsectorofJPY16(USD0.15)/kWh.

Inaddition,after2021,aFeed-inPremium(FIP)islikelytobenewlyintroducedforsolarPVofmorethanafewhundredkWandonshorewindinplaceofthegenerousFITorFIP.TheFITpriceswillcontinuetoapplyonlyforexcesselectricityfromsmall-scalesolarPVoflessthan50kWafterself-consumption,whichmustbealargepartofthegeneratedelectricity.Unlessotherwisesuchtheconditionsaremet,FITwillbenolongeravailableforsolarPVmorethan10kW.EveninthecasethatFITisstillapplicable,theFITpricewillbesetlessthanthecurrentpriceofJPY14(USD13)/kWhfor2019,whichisalreadylowerthan,onceagain,theretailelectricitypricefortheindustrialsector.

Furthermore,overthepastyears,anincreasinglylargenumberofJapanesecompaniesandorganizationshavebeguntoparticipateinRE100andsimilarinitiativestocommittosourcing100%renewableelectricity.Thishasnewlycreatedasubstantialvolumeofdemandforelectricityfromrenewables.

TheendofthegenerousFITandthecostreductionofsolarPVgenerationwiththeincreasingdemandforrenewableelectricityarelikelytocreateanewenvironmentinJapan.RenewablesproducersarenowlikelytoconsidersellingtheelectricitydirectlytothefinaluserviaPPAs,ifthesellingpricesarehigherthantheauctioncontractpriceofaroundJPY12.98(USD0.12)/kWh.Atthesametime,finalconsumerswhoseekrenewableelectricityarelikelytoconsiderpurchasingitdirectlyfromrenewableproducersviaPPAsinsteadoftheexistingelectricityretailersifthepricesofPPAsarefairlycompetitive.AcontinuouslyincreasingFITsurchargeontheretailelectricityprice,JPY2.95(USD0.027)/kWhatpresent,whichismorethan4timescomparedto2014andexpectedtofurtherincreaseupto2032,alsobooststhecostcompetitivenessofPPAsagainstthegridsupplyofelectricitythroughexistingretailers.Therefore,theemploymentofPPAsisexpectedtogrowsubstantiallyoverthenextdecadesinapost-FITerainJapan.



Todate,thereareseveral,ifnotmany,examplesofPPAsinJapanasshowninthenextsub-section.MostofPPAsobservedsofarareso-called“on-sitePPA”or“Third-partyownership(TPO)model”,whichisasortof“directPPAs”mentionedintheabovesectiononGermany,howeverwithoutusingthegridinanycase.InthisPPAmodel,renewabledevelopers(sellers)buildsolarPVplantsdirectlyon-siteonthefinalconsumers’(buyers’)properties,mainlyfactoriesandbuildings,toinjectthegeneratedelectricityintoconsumptionfacilitieswithinthesiteaccordingtothecontractsunderPPAs.ThefinalconsumerspurchaserenewableelectricityfromsolarPVplantsonthesite,buttheydonotneedtocareaboutinstallation,operationandmaintenanceoftheplants.

Thisbiastowardon-sitePPAisalsoadistinctfeatureofJapanincomparisontotheEuropeancountries.AsmentionedintheabovesectionsforGermany,therearemanyPPAs,inwhichrenewableproducersfeedelectricityintogridandthroughwhichfinalconsumers(buyers)purchaserenewableelectricityaccordingtothecontractunderPPAs(see3.3.1Innogyandvariouscustomers).Suchbiascanbeexplainedbyseveralreasons.

Firstly,theJapaneseelectricitymarkethasjustbeenderegulatedandnotbeenfullycompetitiveyet.Themarketenvironmentaswellasthecurrentregulatoryframeworkarenotyetwellsuitedforwideapplicationofon-gridPPAs.Inaddition,theshareofrenewablesinthetotalgeneratedelectricitywasaround18%in2019,whichcontrastedto43%inGermanyinthesameyear.ThisimpliesthattheavailabilityofrenewablesintheJapaneseelectricitymarketissimplyfarlessinJapanthanGermany.Thirdly,almostallrenewableelectricityinJapancomesfromtheFITcertifiedplants.SincethecurrentFITschemedoesnothaveanyfunctionsneithertoidentifynortoguaranteetheoriginsofrenewablesources,FITelectricityisdifficulttobeusedtocomplytoRE100unlessotherwiseanappropriateGoO(GuaranteeofOrigin)systemisinplacewithinthescheme.Havingthesecircumstances,ifsomeoneseriouslyneedstoacquirerenewableelectricity,themostreliablewayisgeneratingitbythemselves,whichisusuallyon-sitegenerationwithintheirownproperty.Underthesecircumstances,on-sitePPAsarepreferredtosleevePPAsinJapan.

3.4.2 Examplesofon-sitePPAsinJapan

CarmanufacturerSUBARUhascommittedtoreduceby30%theirCO2emissions,whichwere680,000t-CO2intotalin2018,by2030.Asapartofaseriesofactionstomeetthistarget,theyhavecontracted“on-sitePPA”withNTTfacilitiestolendthem52,000m2ofidleareaintheirmainfactoryforinstallationofa5MWsolarPVplant.TheelectricitygeneratedfromtheplantisdirectlysoldtoSUBARUtobeconsumedbythefacilitieswithinthefactoryover20years.ThisisoneofthelargestPPAprojectssofarinJapan.Moreover,ontherooftopofthewarehouselocatednearbythemainfactory,1WMofsolarPVplantsareinstalledason-sitePPAproject(NTTFacilities,2019a).Inasimilarfashion,thepharmaceuticalcompany,Dai-ichiSankyoChemicalPharma,hasconcludedacontractforon-sitePPAwithNTTfacilitiestolendidleareaintheirfactoryforinstallationof3.3MWsolarPVplants.Thegeneratedelectricityissoldtotheirfacilitiesover20years(NTTFacilities,2019b).

Otherexamplesofon-sitePPAsarefoundmainlyinretailstores/supermarkets.Mostofthecaseshavesimilarbusinessmodelsofon-sitePPAs.Renewabledeveloperstypicallyinstall100kW-500



kWofsolarPVplants,withbatteriesinsomecases,ontherooftopofstores/carparks/buildings.Allofthegeneratedelectricityissoldtotheretailstores/supermarketstobedirectlyconsumedbythemover10years.



4 PotentialpositiveandnegativeimpactsforeachP2PtradingmodelandforPPAsingeneral

Thischapterwillanalyzepositiveandnegativeimpacts,opportunitiesandthreatsforeachtypeofmarketactor,formarketsandtheenergysystemintotal,andfornon-participatinggeneratorsandconsumersforeachP2Ptradingmodeldescribedinchapter2.ThesameisdoneforPPAsinchapter4.2.Nodistinctionbymodelismadehere,sincedifferencesarenotsobig.

4.1 P2Penergytrading

4.1.1 Overviewofincentivesandbarriersformarketactorsineachmodel

Possibleincentives/opportunitiesandbarriers/threatsformarketactorscanbesummarizedinthefollowingtablesforeachmodelinGermanyandJapan.

GermanyandJapan:ModelG1andJ4-J7:controlledP2Pnetwork:Thewholesalemarketmodel

Typeofmarketactor Incentivesandopportunities Barriersandthreats

Smalltomediumgeneratororprosumer

⋅ IftheP2Ptradingcostislowerthanthecost/priceofthetraditionalsupplychain,thedifferencecouldbesharedbetweenthegeneratorandthecustomer,leadingtohigherrevenuesforthegenerator(cf.LitionclaimsinGermany,KEPCOinJapan)

⋅ Inthisway,P2PtradingcouldcreatenewIncentivesforcontinuoussellingofrenewableelectricityfrompost-FITplantsandforinvestmentforanewrenewableplantwithoutFIP/MPpaymentinapost-FITera

⋅ ProvidersofP2Pelectricityareinthedirectcompetitionwithtraditionalsuppliers,soexpectedP2Prevenuemaynotexceedthepriceofconventionalgenerationandmarketing.

⋅ Afurtherpricepremiumfortheproducerwouldprobablyonlypossibleforgreenelectricitybutnotfor‘grey’electricity,sinceneitherarationalnoranemotionaladdedvaluefortheelectricitycustomercanbeexpectedfromP2Ptradingitself.

⋅ Thereisanuncertainty,ifthepricesobtainedfromcustomerswillbehigherthanfromthewholesalepowermarket,particularlyifthesmartcontractsaremadeusingfixedorotherpredeterminedprices.

Wholesaletradecompany,e.g.VPPoperator

⋅ VPPoperatorsmayorganizeP2Ptradingthroughanaggregationofalargenumberofprosumers,whichwouldcreateanewbusinessopportunity

⋅ ThedirectP2Ptradingwillreducetheirbusiness,unlesstheycanaggregateprosumersfortheP2Ptrading.

TSO ⋅ Inthismodelasinanyothermodelofelectricitytrading,theTSOhasafinancialincentivetoshiftfeed-inandloads(viademandsidemanagement)toavoidgridbottlenecks:itcansupportthisthroughflexiblenetworkcharges,ifthelawallows.However,thisisnotafeatureoftheP2Ptradinginthismodel.

⋅ UtilizationoftransmissionlinesmaydecreasewhenP2PtradingexclusivelyormorestronglyoccurswithinDSOorevenlowerlocalareas,implyingrevenuefromthegridfeewouldreduce.However,thisisnotaneffectoftheP2Ptradingperseinthismodel(cf.chapter4.2).InGermany,itwillalsobepartlycompensatedforbytherevenueregulation(throughthe“regulationaccount”mechanism)

⋅ Agridstabilizationeffectwouldnotbeexpectedwithanationwideexchangemodel,sincetheP2Pmarketpriceonly



reflectsthenationwiderelationshipbetweenP2PsupplyandP2Pdemand,butnotthedistancesbetweentherespectivemarketlocationsoftheproducersandconsumersandtheassociatedtransmissionanddistributionthroughthepublicnetworks.ThereisevenacertainriskthatP2PtradingaggravatesgridbottlenecksiftradingoccursacrossthebordersofTSOs.

DSO ⋅ Inthismodelasinanyothermodelofelectricitytrading,theDSOhasafinancialincentivetoshiftfeed-inandloads(viademandsidemanagement)toavoidgridbottlenecks:itcansupportthisthroughflexiblenetworkcharges,ifthelawallows.However,thisisnotafeatureoftheP2Ptradinginthismodel.

sameasforTSO

Electricitysupplierincl.traditionalandnewelectricityretailer,VPPaggregator;alsocouldbeaP2Pplatformprovideratthesametime,butthislineonlyanalysestheretailsupplyfunction)

⋅ P2Ptradingcouldbeitscorebusinessorcreatenewbusinessandretaincustomers.

⋅ Inaddition,asuppliercouldoffervariablepricesfortheremainingelectricityneeds/sellingsurplusesandearnanadditionalmarginforthisservice,plusenhancethesupply-demandbalanceinitsbalancinggroupandsaveonbalancingenergy

� Foratraditionalornewsupplierintheclassicalelectricitymarket,thereistheriskoflosingmargin,whencustomersmovefromtraditionalsupplytoP2Ptrading,eveniforganizedbythesamesupplier.

P2PPlatformprovider/platformer

� P2Ptradingcouldbeitscorebusiness � Privacyriskofconsumers/prosumersmightbeabarrierforthebusiness

P2PPlatformtechnologyprovider

� P2Ptradingtechnologycouldbeitscorebusiness

� None

Consumerorprosumer ⋅ WiderOptionsofpowerpurchase,forexamplespecificpreferenceonparticularrenewableresourcesandareas/regions,areavailableforconsumer/prosumer

⋅ AddedvalueisonlycreatedfortheconsumerwhenheorshecanpurchaseP2Pelectricityatalowerpricethanelectricityviaaconventionalelectricitysupplycontract.

⋅ IftheP2Ptradingcostislowerthanthecost/priceofthetraditionalsupplychain,thedifferencecouldbesharedbetweenthegeneratorandthecustomer,leadingtolowerprices(cf.Litionclaims)

⋅ TheremaybecostsassociatedwithnewsmartmetersanddevicesrequiredforP2Ptradingbythelaw

⋅ Thereisanuncertainty,ifthepricestobepaidwillbelowerthanintraditionalsupply,particularlyifthesmartcontractsaremadeusingvariable(market-oriented)prices

⋅ Privacyriskmaybecausedbyindividualdatacollectedviasmartmetersandcybersecurity

⋅ InmodelsJ5andJ7,aprosumerisrequiredtoberegisteredasanelectricityretailerwithlegalobligationswhenshe/hesellselectricityindependently,implyingadirectP2Ptradingisalmostimpossibleinreality(inJapan,exceptforModelJ1,J2,J4andJ6)

Table5:Incentive/opportunitiesandbarrier/threatsofwholesalemarketP2PmodelinGermanyandJapan



Germany

ModelG2:controlledP2Pnetwork:Regional/localelectricityprocurementTypeofmarketactor Incentivesandopportunities Barriersandthreats


⋅ Possiblepricepremiumbyregionality;inparticular,thelawontheelectricitytaxallowstowaivethetax(2,44ct/kWhincl.VAT),ifsingleoraggregatedgeneratorsthataresmallerthan2MWanddonotreceivetheFITorFIPsellelectricitytoconsumersnotfartherawaythan4.5km(“regionaldirectmarketing”)(FfE2018b)

sameasformodelG1


sameasformodelG1 sameasformodelG1

TSO ⋅ Lineandtransformationlossesandevenneedstoenhancethetransmissiongridcouldbereducedifregionalelectricitytradingreducesgridbottlenecks;however,thiseffectisuncertaininthismodel(seebelowinchapter4.2).

⋅ TheTSOwouldprobablyneedtoincentivizethisthroughflexiblenetworkcharges,ifthelawallows,sameasinmodelG1.

⋅ IftheP2Ptradingdoesnotchangephysicalelectricityflows:sameasformodelG1.Otherwise,willdependonthe(presumablypositive)effectongridstabilizationandthedirectionofchangesinkWhtransportedviathegrid

DSO ⋅ Lineandtransformationlossesandevenneedstoenhancethetransmissiongridcouldbereduced;however,thiseffectisuncertaininthismodel(seebelowinchapter4.2).

⋅ TheDSOwouldprobablyneedtoincentivizethisthroughflexiblenetworkcharges,ifthelawallows,sameasinmodelG1.



� sameasformodelG1;however,higherpotentialmarginfororganizing“regionaldirectmarketing”(seeexplanationaboveingeneratorline)

sameasformodelG1


sameasformodelG1 SameasformodelG1



� none

Consumerorprosumer sameasformodelG1;however,higherpotentialmarginforsavingontheelectricitypriceincaseofbuyingfromalocalgeneratorvia“regionaldirectmarketing”(seeexplanationaboveingeneratorline)

sameasformodelG1

Table6:Incentive/opportunitiesandbarrier/threatsofregional/localelectricityP2PmodelinGermany



Germany:

ModelG3:controlledP2Pnetwork:P2PtradeservinggridstabilizationTypeofmarketactor Incentivesandopportunities Barriersandthreats


⋅ Forprosumer:Moreflexiblenetworkcharges

sameasformodelG1



TSO ⋅ Hasfinancialincentivetoshiftfeed-inandloads(viademandsidemanagementandtargeteduseofstorage)toavoidbottleneck:eitherTSOorDSOorbothwillsupportthisinthismodelthroughflexiblenetworkchargesorincentivepaymentsiflawallows

⋅ UtilizationoftransmissionlinemaydecreasewhenP2PtradingexclusivelyormorestronglyoccurswithinDSOorevenlowerlocalarea,implyingrevenuefromgridfeewouldreducetosomeextent(inGermany,thiswillbepartlycompensatedbytherevenueregulation)

DSO ⋅ Hasfinancialincentivetoshiftfeed-inandloads(demandsidemanagementandtargeteduseofstorage)toavoidbottleneck:eitherTSOorDSOorbothwillsupportthisinthismodelthroughflexiblenetworkchargesorincentivepayments,iflawallows



� sameasformodelG1;revenuecouldbealittlehigherduetoextratransactionfeatureofflexiblenetworkcharges

sameasformodelG1


sameasformodelG1;revenuecouldbehigherduetoextratransactionfeatureofflexiblenetworkcharges

sameasformodelG1



� none

Consumerorprosumer ⋅ Moreflexibleandpossiblyreducednetworkcharges

⋅ Pricesignalsviasmartmeteringtoshiftloads

sameasformodelG1

Table7:Incentive/opportunitiesandbarrier/threatsofdecentralisedautonomousP2PnetworkmodelinGermanyandJapan

Germany:ModelG4:decentralizedautonomousP2Pnetworkwithon-gridtrading



⋅ Higherrevenueswithoutasupplierasintermediary

⋅ Havetoassumekeyresponsibilitiesintheenergymarket,i.e.supplier(i.e.ContractswithConsumers,TSOandDSO);balancinggroupmanager


sameasformodelG1;VPPoperatorscouldtakeoverthekeyresponsibilitiesintheenergymarketforthegenerators,prosumers,andconsumersforafee,bringingthismodelclosertomodelG1

sameasformodelG1

TSO sameasformodelG1orG2 sameasformodelG1orG2DSO sameasformodelG1orG2 sameasformodelG1orG2Electricitysupplierincl.traditionalandnewelectricity

⋅ notrelevant;however,electricityretailersorVPPoperatorscould

sameasformodelG1



retailer,VPPaggregator;alsocouldbeaP2Pplatformprovideratthesametime,butthislineonlyanalysestheretailsupplyfunction)

takeoverthekeyresponsibilitiesintheenergymarketforthegenerators,prosumers,andconsumersforafee,bringingthismodelclosertomodelG1


sameasformodelG1;shareoftheavoidedtraditionalsuppliermargincouldbehigher

sameasformodelG1



� none

Consumerorprosumer � Reductionintransactioncostsduetoeliminationofintermediaries.

� Lowerelectricitypriceswithoutintermediaries.

� Independencefromenergysupplycompanies

� Havetoassumekeyresponsibilitiesintheenergymarket,i.e.networkconnectioncontractandnetworkusagecontractwithDSO;noall-inclusivecontractwithsupplier(i.e.Consumerhastojointhebalancinggroupofaserviceproviderorregisterandbalanceelectricitypurchasesindependently)

Table8:Incentive/opportunitiesandbarrier/threatsofdecentralizedautonomousP2Pnetworkwithon-gridtrading

GermanyandJapan:ModelG5andModelJ1-J3:decentralizedautonomousP2Pnetworkinoff-grid



� Higherrevenueswithoutasupplierasintermediary;

� Nolegalrequirementforgeneratororprosumertoregisterasanelectricityretailer


notrelevant sameasformodelG1;“self-consumption”withintheP2Pnetworkwillreducetradevolumefurther

TSO sameasformodelG1orG2 sameasformodelG1orG2;“self-consumption”withintheP2Pnetworkwillreducegridfees

DSO sameasformodelG1orG2 sameasformodelG1orG2;“self-consumption”withintheP2Pnetworkwillreducegridfees


notrelevant sameasformodelG1;“self-consumption”withintheP2Pnetworkwillreduceretailvolumefurther





� None

Consumerorprosumer � Reductionintransactioncostsduetoeliminationofintermediaries.

� Lowerelectricitypriceswithoutintermediariesandsavingongridfees(modelsG5,J1,J2).

� Independencefromenergysupplycompanies

� Nolegalrequirementforprosumertoregisterasanelectricityretailer(forModelJ1andJ2)



Table9:Incentive/opportunitiesandbarrier/threatsofdecentralizedautonomousP2Pnetworkinoff-gridinGermanyandJapanAstheabovetablesshow,whenP2Ptradingexpandsatalargescale,themostheavilyimpactedareawouldbethebusinessopportunitiesoftraditionalelectricityretailers.TherewouldbethesignificantriskoflosingtheirbusinessmarginascustomersmovefromtheirtraditionalelectricitysupplytoP2Ptrading.EvenwhenthesameelectricityretailerservestheP2Pplatform,itsbusinessmodelandrevenuestreamwouldbesubstantiallyaltered.Wholesaletradecompanies,includingVPPoperators,wouldalsobeaffectedsincethedirectP2Ptradingwillreducetheirbusinessopportunity.Inanycase,thetraditionalelectricityretailersandthewholesaletradecompanieswouldhaveastrongincentivetobecomeP2Pplatformersthemselvestoavoidlosingtheirbusinessmargin.Infact,electricityretailersareinagoodpositiontodososincetheyalreadyhaveaconnectionwiththefinalelectricityusers.Inaddition,theyalsohaveregisteredasaretailerunderthecurrentlegal/regulatoryframeworkwitharesponsibilityofbalancingwithexperience/knowledgeonoperationofbalancinggroup.ItisnowonderthatthetraditionalelectricityretailershavebeguntoworkonP2PpilotprojectsliketheKEPCOprojectobservedinJapanortheWSWTal.MarktandothersinGermany.

Incontrast,smalltomediumrenewablegenerators,prosumersandconsumerswouldhavemorepositiveopportunitiestoenteraP2Ptradingwithlowercostthanthecost/priceofferedbythetraditionalelectricitysupplychain.Suchcost/pricedifferencescouldbesharedbetweenthestakeholdersleadingtohigherrevenueorlowerpricesforthem.AP2PtradingcouldbringasignificantincentivetosellrenewableelectricityandtoinvestinnewrenewableplantsinapostFITera.Nevertheless,thecost/pricearenotnecessarytobelowerthanthetraditionalsupplychain.ItcouldhighlydependuponthecostofITtools,suchassmartmetersandmonitoringdevices,P2Pplatformoperationandbillingcostsandothers,whichcreatesahugeuncertainty.Inallon-gridmodels(G1toG4;J4toJ7),thegridfees,taxes,andleviescannotbeavoided.Inaddition,privacyriskandcybersecurityassociatedwithindividualdatacollectedbysmartmetersandotherITdevicesmayalsobringuncertainty.However,ifthecostandotherriskissuesareeffectivelyaddressed,P2Ptradingcouldbringalargepositiveimpactonbothrenewableelectricityproducersandprosumers/consumers,whichwouldleadtoafurtherincreaseinrenewableswithoutfinancialsupport,likeFITorFIPschemes,fromthepublicsectororthecommunityofelectricityconsumers.

P2PplatformersandP2PplatformtechnologyproviderswouldhaveenormousbusinessopportunitiesinthefieldofP2Ptrading,whichcouldbetheircorebusinessinthenewlyemergingmarket.AnincreaseindemandsidemanagementwithP2Ptrading,whichmayfinanciallybeledbyTSOstoshiftfeed-inandloads,wouldfurtherexpandtheirbusinessopportunities.

TheimpactsonTSOsandDSOswouldbeamixtureofpositiveopportunitiesandthreatsdependinguponwhetherornotP2PtradingoccursacrossthebordersofTSOsandbetweenTSOandDSO.WhenP2PtradingoccursexclusivelywithinaparticularTSOorDSOorevensmallerareaandiscombinedwithflexiblenetworkchargesorotherincentivesforgrid-stabilizinggeneration,demand,anduseofstoragecapacities(seechapter4.2below),thenP2Ptradingcouldrelievebottlenecksofdistributionandtransmissionlinesbymatchingsupplyanddemandofrenewableelectricitygeneratedwithinacloserarea.Ontheotherhand,ifsuchP2Ptradingisgrowinginalargevolume,theutilizationrateoftransmissionlinesislikelytodecrease,whichwouldbean



economicthreattoTSOsandmaybeDSOsaswell,dependingonregulation(intherevenueregulationinGermany,lossesinrevenueduetoareducedvolumeofelectricitytransportedinaTSOorDSOsystemwillbeatleastpartlycompensatedforbythe“regulationaccount”mechanism).However,overall,aP2PtradingwouldgeneratethepositiveincentiveandopportunityforenhancinggridstabilityforTSOsandDSOsbythepossibilityofaddingincentivesforflexibilityforthegeneratorsandconsumersintheP2Ptradingscheme.

4.1.2 Potentialpositiveandnegativeimpactsformarketsandtheenergysystemintotal

Havingtheabovediscussionontypesofmarketactors,thissectionconsidersthepositiveandnegativeimpactsformarketsandtheenergysystemintotal.

1. Ontheonehand,therecouldbepositiveimpactsbyallowingthecontinueduseofpost-FITrenewablepowerplantsaswellasnewinvestmentsinrenewableenergyplantswithoutaFITorFIPpayment.Incomparisontothetraditionalmarketmodel,thiswilldependona)willingnesstopayapricepremiumforelectricityfromrenewableand/orregionalgenerationassets,b)regulationaspects(suchasthepossibilitytosavegridfees,taxes,andleviesthroughoff-gridP2PtradingmodelsortosavetheelectricitytaxinGermanyforgeneratorssmallerthan2MWandlessthan4.5kmawayfromconsumers,“regionaldirectmarketing”),c)particularlyoncostsavingsinelectricitysaleandsupply,andd)ifornottheelectricitypricesprovidedbyaP2PtradingarelowerthanthosegivenbythetraditionalmodelbyanamountsufficienttocompensateforthecostsofITdevicesandothersneededfortheP2Ptrading.

2. Suchcostsavingsinelectricitytradingandretailsupplywillalsomeananeconomicbenefitforthecountry.

3. Finally,apotentialbenefitfromimprovedgridintegrationofvariablerenewableenergieswilldependonthedifferenceintheeffectformatchingregionalsupplyanddemandbetweentheclassicalmodelandtheP2Pmodel.

1)Regardingthefirstpotentialimpact,thefirstpilotprojectsinGermanyandJapanindeedtargetthetradingofelectricityfromrenewableenergies,andhenceagroupofcustomersinterestedingreenand/orregionalelectricity;sometimesalsocustomerswholiketobepartofacommunityoflike-mindedenergytransitionpioneers,suchasintheenywayorSonnenbusinesses.Somemayjustbeinterestedinlowerelectricitypricestoo.Thenumbersofcustomersusingtheexistingoffersis,however,unknowntous.Litionclaimstohavecustomersinover100citiesinGermany.Enywayhaslinked20MWofgenerationassetstocustomers.Sothereseemstobesomepotentialforthecontinueduseofpost-FITrenewableenergiesaswellasnewinvestmentsinrenewableenergyplantswithoutaFITorFIPpayment,butthefuturedevelopmentisdifficulttoestimate.

2)Asregardscostsavingsinelectricitytradingandretailsupply,evidencefrompilotprojectspresentedinchapter3seemstoindicatethatsuchcostsavingsdoexist.Althoughthemarginsintraditionalsupplychainsarerelativelysmall(afewJPYorcents/kWhforresidentialcustomers,e.g.12%oftheretailpriceorca.3.5cent/kWhinGermany(FfE2018b),andlessthan1JPYor1cent/kWhforlargercustomers),itseemstheyarelargeenoughtomakeP2Ptradingattractive,



especiallyifcombinedwithhigherwillingnesstopayapricepremiumforelectricityfromrenewableand/orregionalgenerationassets.

3)Forassessingthepotentialforimprovedgridintegrationofvariablerenewableenergiesandgridstabilization,weneedtoanalyzewhetherthereisadifferenceintheeffectformatchingregionalsupplyanddemandbetweentheclassicalmodelandtheP2Pmodels.

Intheclassicalmodel,inGermanyrenewablepowerissoldtotheDSO(inaDSOarea),thenviatheTSOtothewholesalemarket(outside),orsolddirectlytothewholesalemarket.There,itwillbesoldtoasupplier(inoroutsidetheDSOarea)andfromthesuppliertothecustomerintheDSOarea(oroutside).InJapan,mostofREinJapanisunderFITentitlement.Therefore,suchFITelectricityispurchasedbyaDTSOatthefixedFITprices.Then,alotofthiselectricityissoldtotheretailerswithintheDTSOareaatthecontractedpriceandtherestofitissoldatthewholesalemarketattheDTSOarea(someofthemgoestodifferentDTSOsthroughinter-connectionlines,whicharetypicallyweakerinJapancomparedtotheEurope).

Thephysicalflow,however,isfirstofallwithintheDSOareafromgeneratortoconsumer.Excesspowerisflowingoutside(theoverlayingtransmissionsystem),deficitpowerisflowingintotheDSOareafromtheoutside.Thisisshowninfigure#7.

Figure7:Physical,contractual,andmonetaryflowsintheclassicalelectricitytradingmodel



Intheon-gridP2Pmodels,economicflowisprimarilywithintheP2PplatformandcanbedirectlyfromgeneratortoacustomerwithinthesameDSOarea(thenitusuallyequalsthephysicalflow),butalsotocustomersinotherareas.Andforsurplusordeficitpower,theflowsinoroutoftheDSOareaarethesameasintheclassicalmodel(Figure#8).

Figure8:Physical,contractual,andmonetaryflowsintheP2Pelectricitytradingmodelatregionallevel

Note:theP2PplatformprovidermaybepayingthegridfeetotheDSOonbehalfoftheproducer,ifthelatterformallyactsasasupplierinthemodel(e.g.enyway).IftheP2Pplatformproviderconcludesthegridusecontractfortheconsumer,i.e.theplatformprovideristhesupplier,theplatformproviderwillpayitonbehalfoftheconsumer.

Asthesegraphsshow,on-gridP2Ptradingperseisunlikelytochangeanythinginphysicalflowsofelectricity,unlesseithertheP2Ptradingexplicitlyincludesorinducesadditionaldemand/supplychangesthroughDSM,flexiblegeneration,system-drivenuseofbatteries/BEV,ortheyareinducedotherwisebygridoperatorsorgovernmentpolicies.Itwould,therefore,persenotprovideanyadditionalbenefitsforthealleviationofgridbottlenecksandthegridintegrationofrenewableenergywithoutadditionalmeasurestochangesindemand/supply.

Thismaybeexplainedasfollows:Withon-gridP2PtradinginaregionorDSOarea,thecustomernowhasaregionalsupplier,andthegeneratorhasaregionalcustomer.Butifthecustomerdoes



notchangehis/herloadcurve(i.e.,doesnotuseDSMorstorage),andifthegeneratorweretogeneratealsointhetraditionalmarketmodelasthesunshinesandthewindblows,nothingwillchangeinthephysicalsupply-loadbalanceintheDSOarea.Itisjustthattheelectricityfedintothegridbythegeneratorisnowsolddirectlytothiscustomerandnottoothersviathemarket;theseotherconsumerswillnowbuyelectricityfromothergeneratorsviathemarket.AndtheP2Pcustomerisnowbuyingtheelectricitydirectlyfromthegeneratorinsteadoffromthemarket.Thisisallabouteconomicflowsofelectricityinfigures#7and#8.Butphysically,thesameamountofelectricitywillbefedintotheDSOgridbythegenerator;andthesameamountofelectricitywillbetakenfromthegridbytheconsumer.

Thisholdsforthecase,thatthereisnodifferenceinthecapacitiesofgenerationortheloadsinaDSOarea.Then,therewillalsobenochangeinthetotalpowergeneratedinaDSOarea,andnochangeintotalelectricityconsumptioninthisareaeither.Incontrasttothiscase,therewillbeaneffectonphysicalelectricityflows,iftheexistenceoftheP2Pmodelinducesandenablesadditionalgenerationfromrenewableenergiesornewelectricitydemands,suchasbattery-electricvehicles(BEVs),whoseownersbuyapartoftheadditionalgeneration.itwilldependontherelativeeconomicsituation,suchaselectricityprices,andpoliticalframeworkforP2Ptradingvs.theclassicalmarketmodel,whetherP2Ptradingmayinducesuchadditionalgenerationanddemandthatwouldnotariseintheclassicalmarketmodel.

Forexample,IftheP2Ptradingenablesthecontinuedoperationofarenewableenergygeneratorpost-FITortheoperationofanewgeneratorwithoutFITorFIP,thensupplywithinthisDSOareawillincreasecomparedtotheclassicalmarketmodel.Butalsointhiscase,theP2Ptradingoftheadditionalelectricitypersedoesnotcareaboutflexibleoperationofthenewgeneratorinitsoperation.Thegeneratorwillfeedintosupplyhisorhercustomersjustlikethegenerationisavailable.Whetherthisfeed-inthathasbeeninducedbytheP2Ptradingwillalleviateoraggravategridconstraints,willthereforenotbeunderthecontroloftheDSOorTSO(exceptforeventualcurtailment)withoutadditionalactiontakenbygridoperatorsortheP2Ptradingplatform.

Wemaythereforeconclude:AP2Ptradingschememayonlychangeanythinginphysicalflowsbetweenexistinggeneratorsanddemandsduringitsoperation,iftheP2PtradingexplicitlyprovidesorincludesincentivesforDSM,flexiblegeneration,system-drivenuseofbatteries/BEV,andsmartchargers,orifnewgenerators,demands,andflexibilitiesareinducedbytheexistenceofP2Ptrading.Accordingtothefiguresandconsiderationsabove,itisdoubtfulwhethersuchincentivesareagenuinefeatureoftheP2Ptradingduringitsoperation.Theywillneedsmartmetersandsmartcontractsthatenabletheincentives.TotheextentthatP2Ptradingacceleratestheinstallationofsmartmeters,itwillalsoenhancethepossibilitiesforsupportingflexibilityoptions.However,theystillwilllikelyneedtobeaddedtothemarketmodelbytheplatformproviderand/ortheDSO/TSO(asintheSonnen/TenneTpilot),andtheywilllikelyalsoneedDSO/TSOcontrolofthephysicalassets.

However,thereisalsoanincentivefortheP2Pplatformproviderand/orretailenergysupplierthatisthebalancinggroupresponsibletoofferflexibletariffsinexchangeofreal-timecontrolofgeneratorsandconsumers’assets,inordertoallowreal-timeorshort-timecontrolofimbalancesinthebalancinggroupmadeupoftheP2Ptradingcommunity.Thiswillbeattractive,ifthecostis



belowthatofbalancingenergyfromthebalancingmarket.P2Ptradingofrenewableenergieswouldthenadvancethemarketintegrationofrenewableenergies.IftheP2Ptradingandthebalancinggroupisstrictlylocalorregional(asinmodelG2orpossiblyG3),thismayalsocontributetosomealleviationofgridconstraints.

Therefore,inthecaseofon-gridP2Ptrading,ifanychangesinenergysystemandenergymarketwithchangesinphysicalflowofelectricityareexpectedbyP2Ptrading,itiscrucialtoexplicitlypromoteDSM,flexiblegeneration,system-drivenuseofbatteries/BEV,smartchargersandreal-time/short-timecontrolofgenerators’andconsumers’assetsthroughP2Ptrading.

Whatisthesituationforoff-gridP2Ptrading?IftheprosumersjustoptimizetheirbillsbysupplyingeachotherfromtheirPVandstorage(modelJ1),theresultattheDSOarealevelwillnotbemuchdifferentfromtheon-gridmodels:thesaleandsupplywilljusthappenbehindthegridconnectionpointinsteadofoverthelocalgrid.Intheclassicalmodel,oneprosumerwouldsellintothegrid,andtheotherwouldbuyfromthegridatthesametime.Iftheprosumershavestorage,theinternaloptimizationbetweenthemmaychangestoragein-andoutputovertimesomewhat,butthetotalloadoftheirelectricitypurchasefromorsaletothegridmaynotbeverydifferent.ThesamewillbethecaseiftheP2Ptradingcommunityusesprivatelines.However,theelectricitytransportataverylocal(sub-transformer/streetline)gridlevelmaybereduced,andmayreducetheneedforreinforcingit–butalsotherevenuesoftheDSO.OnlythemodelJ2,inwhichelectricityistransportedbycar–theBEV–maychangethetimingofelectricityfeed-inanduse,andsometimesevenbetweenDSOareasifthebuyerislocatedinadifferentDSOareathantheseller.

Again,ifadditionalnewdemandisinducedbyP2Ptrading(suchasEVchargingbyRESelectricitypurchasedfromanewlybuiltPVplantlocatedinthesameoff-gridarea),thenphysicalelectricityflowwithintheareawillincrease,andmaychangeinthegridoutsidethearea.However,thiswillnotbeautomaticallyledbytheP2Ptradingoperationpersetostabilizethegridoutsidethearea,unlessthereareincentivesforit.

WouldtherebeanalternativesolutiontoP2Ptradingintheclassicalsupplystructurethatcontributestogridstabilization?BalancingpowermarketsandVPPthatcouldbundleflexiblesupplyanddemandassetscanbethesolutionsthatdevelopedinEuropeandaredevelopinginJapan,aswediscussedinthereportfromthefirstyearofthisstudy(Ninomiyaetal.2019).Butforlargeruseofflexibilityoptions,especiallygrid-supportiveuse,itwouldneedflexibletariffsand/orDSO/TSOremotecontroljustthesameasweseeneededinP2Ptrading.

Theconsumerperspective:adetailedanalysis

AstudyconductedbyPricewaterhouseCoopersGmbH(PwC2016)onbehalfofVerbraucherzentraleNRWunderlineswhathasalreadybeenmentionedinthepreviouschapters:TheextensiveestablishmentofP2Penergytradingusingblockchaintechnologyintheenergysectorwouldbeaccompaniedbymajorchangesintherolesofthevariousplayersintheenergymarket.Fromaconsumerperspective,thiscanhaveadvantages,butalsodisadvantages.

Oneconceivablepositiveconsequenceforconsumersisthereductionintransactioncostsduetotheeliminationofintermediaries.Asaresult,othersystemcostscouldalsofall;theseinclude:



• Noorlowercostsandprofitsurchargesforcompaniesthathavebeenactiveinthesystemuptonowbutwillplaylittleornoroleinthesysteminthefuture.

• Noorloweroperatingcostsformeterreading,billing,etc.• Noeffortfordunningprocedures,collectionprocedures• Nocostsforpaymenttransactionsviabanks(especiallydirectdebitsfromcustomers)• Possiblylowernetworkcharges• No/lowcostsforthecertificationofgreenelectricity

Ontheotherhand,transactionfeesforblockchaintransactionsaswellascomputerperformanceandtheirenergyconsumptionmustofcoursealsobetakenintoaccountinordertoestimatethenetcostsavingsthroughblockchain.Inaddition,ifP2Ptradingfollowsthewholesalemarketmodeloutlinedinchapter2.1,powergridsmayneedfurtherupgrades,andthecorrespondinginvestmentswillhavetobecalculated.

Furthermore,Blockchaincanincreasetransparency,asitenablestheconsumertoexactlyretracewheretheelectricityheorshebuyscomesfrom.Thetransparencyalsoincludesthetransactionhistory,whichisstoredintheblockchainsothatitcanbeevaluatedclearly.

Initsstudy,PwCalsoidentifiedthepotentialaccelerationinthedevelopmentofprosumersasafurtheradvantage.Consumersthusbenefitfromagreatervarietyofoffersandlowerprices.Inaddition,blockchainmodelsmakeiteasiertoimplementcommunity-basedcitizenenergymodels.Theexpansionofrenewableenergiescouldbefurtherpromotedbythesimplifiedmarketingpossibilitiesfordecentralizedenergyproducers.

Inadditiontothesebasicallypositiveopportunities,theuseofblockchaintechnologycanalsohavenegativeconsequences,atleastintermsofrisksinviewofthelimitedtestingofthistechnologytodate.Oneassumptionmadebyexpertsisthatblockchaintechnologymaynotbesufficientlyscalable.Theextremelyrapidlyincreasingamountofdataplaceshighdemandsonsecurity,speed,andcosts.

Socialacceptanceisalsoapotentialhurdle,asitisacompletelynewtechnologywithanentirelynewtransactionmodel.Anegativeattitude,atleastinpartsoftheenergysector,theconsumers,andsocietyoverall,isthereforenotunlikely.

ThereareopenquestionswithregardtoequityandchancesofbenefittingfromthenewtechnologythatarenotevendiscussedinthePwCstudybutarealsohighlyrelevantforitsacceptance,andevenacceptability:

• WillthebenefitsofthenewP2Ptradingbeavailabletoallconsumersoronlytolargerconsumersorprosumersthatpromisehigherrevenues(i.e.,cherry-pickingbyplatformprovidersordecentralizedautonomousP2Pnetworks)?

• Willthetransactioncostsandfinallytheelectricitycostsbetransparent,willitbepossibletoleaveP2Pnetworksifnotsatisfied,andhowcanexcessivecostsandprofitsbeavoided(throughthemarketorisregulationneeded)?

• Howsmartare‘smartcontracts’?Ifthecustomerdoesnotselectthegenerator(s),fromwhichheorshewishestobuyelectricity:Howdothesmartcontractsdecidewho



receiveswhichelectricityfromwhichgenerator,inawaythatminimizeseverybody’senergybills,orwillsomeconsumerspaymoreandsomeless?

AsthePwCstudyfurtherpointsout,theanonymityoftheblockchainconceptcarriestheriskthatillegalactivitiessuchasorganizedcrimecanbehandledviathesystem.SuchcriminalactivitieshavealreadyoccurredwithcryptocurrenciessuchasBitcoin.

Inaddition,thedecentralizedsystemoftheblockchainwithoutsuperiorauthoritycanalsohaveanegativeeffectontheconsumer,sinceatleastinthemodelsdiscussedortestedtoday,thereisnoresponsiblebodythatintervenestoregulate,offerssimpleservicesorcanmakesubsequentchangestoprocessesthathavealreadybeencarriedout.

Arecurringproblemwithregardtoblockchaintechnologyis,forexample,thehandlingofpersonalaccessdatafromone'sownaccountthatausermayhaveforgotten.Inthiscase,theuserirrevocablylosesaccesstotheaccountandthesettings,information,andassetsstoredonit.Chances Risks• Reductionoftransactioncostsbybypassing

intermediaries• Lowerpricesduetoincreasedmarkettransparency• Easywaytobecomeaproviderofelectricityand

services• Fundamentalsimplificationoftransactions

(documents,contracts,payment)• Increasedtransparencythroughdecentralizeddata

storage• Flexibilityofmanyproducts(tariffs)andinchange

ofsupplier• Strengtheningoftheprosumerthrough

independencefromacentralauthority(directpurchase/saleofenergy)

• CompletedatalossincaseofIDloss• Currentlyhightransactioncostsforpublicblockchain• Lackofacceptancebyconsumerspossible• Missingauthorityinconflicts,noimmediate

possibilityofescalation• Problemoffraudinthetransitionfromthereal

worldtothedigitalblockchainworld(e.g.interfaceSmartMeterintheblockchain)

• Risksduetothelackoflong-termexperience• Initialtechnicalproblemswiththefirstapplications

possible• Functionalinadequaciesandsecurityrisksdueto

lackofstandards• Electricitynetworkmustcopewithincreased

flexibility• Willallconsumers/prosumersbenefitinthesame

way,orwillsomebenefitmore?Table10:ChancesandrisksofP2Ptrading(Source:basedonPwC2016)

Note:Risksofdataloss,lackofauthority,andfraudmaybemorerelevantoronlyrelevantfordecentralizedautonomousP2Ptradingmodels

Thejudgementastowhetherblockchainhasmoreadvantagesthandisadvantagesdependsonthetypeofimplementation.ApplicationsthatfocusprimarilyonthedecentralizeddocumentationoftransactionswillshowapositivebalancemorequicklythancomprehensiveapplicationsthatenabledecentralizedtransactionswithSmartContracts.Privateblockchainmodels(suchasthoseofferedbytheplatformproviderinacentrallycontrolledP2Ptrading)willprobablybeassociatedwithlowercosts,butwiththelossoftheprincipleofdecentralizedorganization.Thequestionalsorises,whichadvantagesuchprivateblockchainsolutionswouldhaveoverpreviousdatabase-basedprocesses,sinceinparticulartheaspectofthedecentralizedandthusmanipulation-safestorageofdataispushedintothebackground.

AnapplicationofblockchaintechnologyforP2Penergytradinginitsmostadvancedformofthedecentralizedautonomousapproach,asdescribedabove,alsohaslong-termsocialconsequencesthatneedtobeconsidered.Theindependencefromhumandecision-makingpowerpromisesanon-corruptibletransparencyandautomationoftransactionsandthusanewqualityofsecurity.



Initsanalysis,PwCevengoessofarastosaythatblockchaintechnologymakesitpossibletocreateaself-regulated,self-organizedeconomicandsocialsystemthatisrunbycomputerprogramsandconductsbusinessonthebasisofself-executingdigitalcontracts(PwC2016:37).Thecentralchallengeishowtoimplementasocialconceptwithoutacontrolmechanisminsuchasocio-technicalsystem.Insocialconcepts,suchacontrolmechanismhasevolvedthroughculturalevolutionandhasproducedaseriesofinterconnectedsystemsthatcreateadegreeofelasticitywithrespecttoincorrectormaliciousbehaviorofindividualparticipants.Asocialinteractioncreatesarelativelystable,fair,andjustsocialsystem.Technicalsystems,ontheotherhand,usedeterministic,isolatedconceptstomakequickdecisionsthatcanhavesevereconsequencesfortheparticipants(cf.ibid.).Assaidabove,forexample,howdoesthemachinedecidewhoreceiveswhichelectricityfromthemanygeneratorsfeedingintothenetwork,atwhichprice?Whenapplyingblockchaintechnologies,itisthereforeimportanttothinkthroughandweighupthequestionofstandards,lawsandrules,theirfeasibilityandtheregulationoftheprogramcodewithforesightandwisdom,andtoadaptthetechnologyaccordinglyinordertoensurethatthetechnologyservestheusersandnotviceversa.

Furtherconsiderationsonpotentialproblemsandrisksofblockchaintechnology

Inanotherreport,theResearchGrouponEnergyEconomicsatTUMunichhasidentifiedanumberofproblemsandrisksofblockchaintechnology(FfE2018a:54etsqq.;translationbytheauthorsofthisstudy):

1. Thediscreteblocksandthelimitationoftheblocksizessetlimitsforthescalability.Currently,onlyamanageablenumberoftransactionspersecondcanbeprocessedinknownnetworks.Thescalabilityofthetechnologyisstillverylimitedandcannotbesolvedeasily:

a. Largerblocksallowhighertransactionratesinthenetwork,butincreasethecomputationalandcommunicationeffortfortheconsensusmechanisms.Thiscanleadtocentralizationinlargedatacentersandincreasedenergyconsumption,especiallyinthe‘proofofwork’technology,andincreasethehardwarerequirementsforparticipation.

b. Theblocksizecannotbeincreasedarbitrarily,becauseotherwisetheamountsofdatatobesentandstoredbecometoolarge.Thelimitationissetbytheamountofdatathatcanbetransferred.Participantswithtoolowbandwidthswouldincreasinglybeexcludedfromthesystem.

c. Duetotheconstantprovisionofallinformationfrompasttransactionsintheformoftheentirechain,thestoragerequirementsofthenodesinvolvedareconstantlyincreasing.

d. ThemorecomplexthepossibilitiesforSmartContractsonablockchainare,themorecomputingtime,duration,andcostsrise.ThisisduetotheredundantexecutionofSmartContractsonmanydecentralizedcomputingunits.

2. Someblockchaintechnologies(e.g.Bitcoin)prefertomineusingspecializedhardware.Privateuserscanhardlymakeacontributiontothe‘proofofwork’(PoW).Largeminingpoolsunderminethedecentralizedideaoftechnologyandaggregatepower.



3. Theresourceconsumptionofthetechnologyisheavilydependentontheconsensusmechanismused.ThePoWrequiresextremeamountsofenergyinordertoserveblockchainswithalargenumberofvalidatorsandcorrespondinglyhighcompetitivepressure(suchasBitcoinorEthereum).

4. Manycomponentsoftheblockchainarebasedonthefactthatencrypteddatacanonlybemanipulatedusingdisproportionatelylonganduneconomicalcomputingtimes.Withthedevelopmentofquantumcomputers,however,someofthesecuritymechanismsusedcouldbeovercomeinarelativelyshorttime.

5. Duetotheconsensusmechanisms,powerisunequallydistributedwithinablockchainnetwork.Thiscanleadtoabuseiftoomanyvotingshares(e.g.duetocomputingcapacityatPoW)areinthehandsoftoofewpeople.Ifanactorcancombinemorethan50%ofthecomputingcapacitywithinablockchainnetwork(PoW),theblockchaincantheoreticallybemanipulated.

6. Ifauser'saccessdataislostorhackedinapublicblockchain,thereisnowaytorestoreit.7. Incorrectlyexecutedtransactions(e.g.atypointherecipient'saddress)cannotbe

reversed.8. Althoughanonymityinblockchainapplicationsisgivenbypseudonymizationusingpublic

key,eachtransactioncanbetracedand,ifnecessary,transactionhabitscanbederivedusingbigdataanalyses.Ifatsomepointaninterfacetotheidentityoftheuserisestablished(e.g.theBitcoinpaymentofanorderwithclearnames),allpastactivitiescanbetraced.

9. Dependingonthedesignandapplicationofblockchaintechnology,anumberoflegalchallengesmayalsoarise.Therighttodeletion("righttobeforgotten")underEUDSGVOArt.17istechnicallynotpossibleinadecentralizedpublicblockchainatpresent.Thereisalsono"responsibleperson".LegalquestionsregardingSmartContractsandtheircompatibilitywithapplicablelawalsoremainunresolved("CodeisLaw").

10. Interoperabilitybetweendifferentblockchaintechnologies(e.g.betweenBitcoinandEthereum)hasnotyetbeenachieved.Industry-wideorcross-industrystandardshavenotyetbeendefined.

11. Thegovernanceproblemexistsinpublicblockchains.Changestothesysteminfrastructureareonlypossibleifasufficientnumberofparticipantsacceptthechanges.Otherwiseaforkmayoccur.Basicchanges(includingimprovements)arethereforedifficultandprotracted.

12. Inpublicblockchains,a(monetary)incentiveoradvantageisalwaysneededfornodes,sothattheyvoluntarilyparticipateinthenetwork.Runningotherapplicationsthancryptocurrenciesisthereforealsonotpossiblewithoutsuchcurrencies.

13. Notallconsensusmechanismscanbeimplementedwithoutassociatedcryptocurrencies(e.g.Proof-of–Stake,PoS).

14. RegardingtheP2Ptradingitself,thecodeofSmartContractsispubliclyavailable.Ifthereareanyweaknesses,theycanbefoundandexploitedbyallnetworkparticipants.Detailedandtime-consumingreviewprocessesandqualitycontrolsarenecessaryforcorrectimplementation.



15. Innovationsforsolvingproblemsoftentakeplaceunderdifferentprotocolsandarenotdirectlycompatiblewithotherchains.Thefragmentationandlackofstandardizationisthereforebothanadvantageandadisadvantage;whiletheconceptsandthecodeareopenlyaccessibleanddevelopedbymanydifferentactorswithdifferentgoals,theymustbeadaptedforeachblockchainandinsertedintotheindividualprotocols(forexampleinprivacychainsvs.smartcontractplatforms).

16. Blockchainsrequireafunctioningdigitalinfrastructureformassadaptationintherespectivesector.

17. "Security-by-design"isastrengthoftheblockchaintechnology.However,securitythroughredundancyinpublicblockchainsisverydataandpowerintensiveandthereforefundamentallylessefficientthancentralsolutions("inefficiency-by-design").

4.2 PPAs

4.2.1 Overviewofincentivesandbarriersformarketactorsineachmodel

InasimilarfashionasforP2Ptrading,possibleincentives/opportunitiesandbarriers/threatsofPPAscanalsobesummarizedinthefollowingtable.

GermanyandJapan:



� AvoidingcostsandrisksofparticipationinauctionsforFIP/MP;foron-sitePPAs,possiblysharingpartofthesavingsinpartofthegridfees,taxes,andlevies,dependingonlegislation

� Securelonger-termrevenuestreaminapost-FITera

� RiskofreceivinglowerpricethanwithmarketinginthewholesalepowermarketorthroughauctionforFIP/MP

� Riskoflosingoff-takerwhenthecontractedpartyhasfinancialproblems


� VPPcouldaggregatesmallergeneratorsforPPAs

� sameasforP2PmodelG1

TSO � Hasfinancialincentivetoshiftfeed-inandloads(demandsidemanagement)toavoidbottleneck:cansupportthisthroughflexiblenetworkchargesiflawallows

� smallforon-gridPPAs:mayloserevenueifanewgeneratorforPPAisbuiltinthesameDSOareaasthecustomer

� maylosemorerevenuethroughon-sitePPAs,dependingonhowregulatedgridrevenuedependsontransportvolume

DSO � Hasfinancialincentivetoshiftfeed-inandloads(demandsidemanagement)toavoidbottleneck:cansupportthisthroughflexiblenetworkchargesiflawallows

� noneforon-sitePPAs;mayloserevenuethroughon-sitePPAs,dependingonhowregulatedgridrevenuedependsontransportvolume

Electricitysupplier � couldbethebuyerinPPAcontracttosecurecheappowerforitsretailcustomers

� sameasforP2PmodelG1

Consumer � Possiblyreducedpowerprices(ifPPAusesveryfavorableproductionsites);foron-sitePPA,savingahighinitialcapitalinvestmentonrenewablepowerplant,andpartofthegridfees,taxes,andlevies,dependingonlegislation

� Possibilitytodemonstratelow-carbonelectricitysupply

� Risktopaymorethanwithsupplybasedonwholesalemarketprices

Table11:Incentive/opportunitiesandbarrier/threatsofPPAs



ComparedtothecasesofaP2Ptradingdiscussedabove,inthecaseofPPA,therearefarlesssubstantialbarriersandthreatsforallofmarketactors.Thisisalsotrueforincentivesandopportunities,whichcanbegenerallywellcompatiblewiththeexistingmarket.

4.2.2 Potentialpositiveandnegativeimpactsformarketsandtheenergysystemintotal

Fortheanalysis,thesamecriteriaapplyasforP2Ptrading(cf.chapter4.2.1).

1)PPAscouldpromotepost-FITrenewableplantstocontinuetheirproductionandaninvestmentonnewrenewableplantsinapost-FITera,asboththeexistingorplannedprojects(cf.chapter3)andtheanalysisofincentivesandbarriersformarketactorsintheprevioussubchapterreveal.Thereseemtobefarlessbarriersandthreatsforallactorsinthemarket,suggestingthatanimplementationofPPAismucheasiercomparedtoaP2Ptrading.ThisalsoimpliesthatPPAscouldbeemployedforpromotionofrenewablesintheshorttomediumterm,whileatleastinJapanP2Ptradingcouldbeseenasamuchlonger-termtoolinthefuture,sinceevenPPAhasnotwidelybeenimplementedyetinthecountry.Inotherwords,overthenextdecadeorso,PPAscouldbecomeamaindrivertoincreaserenewableenergyatalargescale.Thiswouldbeanimportantbenefitfortheenergysystemintotal.Atthesametime,preparationsforP2Ptrading,addressinganumberofissuesidentifiedincludingcostsofITdevices,orprivacyrisksofconsumers/prosumers,wouldproceedforaneventualimplementationofP2Ptrading.P2Ptradingalsoseemsmoreappropriateforsmallertomediumgenerators,prosumers,andconsumersthandirectPPAs.However,greenpowersuppliersconcludingPPAswithlargegenerators(suchastheGreenpeaceEnergyexampleinGermany),andaggregationofgeneratorse.g.throughVPPformarketingviaPPA,couldalsoenabletheuseofPPAsforsmallergeneratorsandconsumers–althoughnotsomuchforconnectingprosumerstoeachother.AfurtherexceptionfromtheempiricalfindingthatPPAhassofarmainlybeenavailableforbigconsumersorsuppliersisthespecialmodelinGermanyaimingtoenabletenantstopurchaseelectricityfromaPVplantonthebuildingtheylivein(named‘Mieterstrom’inGerman).

2)Incontractualrelationshipsbetweenlargegenerators,suppliers,andlargecustomers,themarginsareusuallymuchsmallerthaninthetraditionalsupplyofresidentialandothersmallerfinalcustomers.Therefore,thepotentialeconomicefficiencygainsforsocietywillalsobemuchsmaller.

Foron-gridPPA,thismaymeanthatsmallerincentivesandopportunitiesexistforPPAthanforP2Ptradinginvolvingsmallerconsumers.Thismaysuggestthatsomeincentives,suchasimprovementoftheexistingregulatoryframeworkandlegislation,couldbeneededbypolicymakersiftheywanttopromoteon-gridPPA.

3)Abenefitfromimprovedgridintegrationofvariablerenewableenergieswhilemaintaininggridstabilityisuncertain,asitwillbeverycase-dependentwhetherthereisanimprovementinmatchingofregionalsupplyanddemandwhenmovingfromtheclassicalmodeltothePPAmodel.AsfortheP2P,theoperationofthePPAassetspersewillnotchangephysicalelectricityflowscomparedtothecase,whentheRES-Eplantwouldhaveoperatedintheclassicalmodeltoo.Anyflexibleoperation,DSM,storageetc.wouldneedtobesupportedandinducedthrough



other,additionalinstruments.Thiswillbeeasierwithon-sitePPAsthanwithon-gridPPAs,sinceinthelattermodel,oftenPPAgeneratorandcustomermaybelocatedfarawayfromeachother.

Notinrelationtothesethreecriteria,apotentialnegativeimpactfortheconsumersnotbeingabletoengagein,orbenefitfromPPAs,maybethatPPAcontractsmaytakeawaythecheapestsitesfrompublicelectricitysupply.IntheauctionsforFIP/MPfornewRES-Egeneratorsforthepublicelectricitysupply,then,onlythelessattractivesitesmaybeleftandcausehigherpricesfortheotherconsumers.Thiswouldbeadistributionaleffect.

Thesamewouldapplyifsomelargeconsumerssecuredtheproductionofsomeofthecheapestpost-FITgeneratorsforthemselvesatalowprice.However,aslongasthewholesalepowerpriceisthebenchmarkandissufficienttosustaincontinuedoperationofpost-FITplant,thisshouldnotbeaproblem.

Anotherdistributionaleffectforon-sitePPAs,justasoff-gridP2Ptrading,willbethattheotherconnectedconsumershavetopayahighershareoftotalgridcosts,whichthePPAconsumersaves.



5 RecommendationsonP2Penergytradingmodelsandpolicies

5.1 Recommendationsforbothcountriesonmodelsthatwouldbeusefulintheirrespectivemarketsbywhen

Intheintroductiontothisreport,weaskedourselveswhatcouldbetheobjectivesofP2PtradingandPPAsthatwouldadvancetheenergytransition.Supportingtheexpansionofelectricitygenerationfromrenewableenergies(RES-E)anditsintegrationintothesystemaretheoverarchinggoals.Tothisend,weassessedwhetherthesenewmarketmodelswouldcontributetothefollowingmoreoperationalobjectives:

• enablingcontinuedoperationofRES-EplantsaftertheendofFITpayments;• financingnewRES-EplantswithoutFIP/MP-typepayments,asitmaybeusefuland

possibleinthelongruntohaveamarketdesignintegratingRES-EassetswithoutaFIT/FIP/MPsystem;

• meetingcorporategreenelectricitypurchaseordecarbonizationgoals;• matchingsupplyanddemandintotalandinregionaldecentralizedpowermarkets;• gridstabilizationviatargetedP2Ptrading.

5.1.1 UsefulP2Ptradingmodels

Asdiscussedinchapters2to4,therecanbebothon-gridandoff-gridP2Ptradingmodels.

Foron-gridP2Ptrading,wefoundthatintheshortrun,onlythosemodelswillbepossibleinpractice,whichareofferedbyanexistingelectricitysupplieroperatingaP2Ptradingplatform,oranewP2Pplatformproviderthateithercantakebalancinggroupresponsibilityfortheparticipatinggenerators,prosumers,andconsumers,orcooperateswithacompanythatorganizesbalancinggroupresponsibility(ModelsG1toG3inGermany,ModelJ4and,iflegalpreconditionsarecreated,ModelJ5inJapan).

• Thismayreducemarketingandsupplycostsandmarginscomparedtotheclassicalelectricitysupplychain,allowingtosharethesavingsbetweenthegenerators,thecustomers,andtheP2Pplatformprovider.

• Forthisreason,itcanbeamodelforregionalornationalmarketingofRES-Egeneratorspost-FITornew,non-FIT/FIPRES-Eplants;otherreasonsarethatthereisagroupofcustomersinterestedingreenand/orregionalelectricity,includingsmalltomediumcompanieswithgreenelectricitypurchaseordecarbonizationgoalsbutthataretoosmalltobeofferedPPAs;sometimesalsocustomerswholiketobepartofacommunityoflike-mindedenergytransitionpioneers,suchasintheenywayorSonnenbusinesses.

• DependingontherelativeeconomicsituationandpoliticalframeworkforP2Ptradingvs.theclassicalmarketmodelandtheFIT/FIPscheme,andonhowwellboththelatteraresupportingrenewablepowergeneration,P2Ptradingmaythereforeinduceadditionalgeneration,e.g.frompost-FITrenewableenergyplantsthatwouldotherwisenothave



continuedtooperate,orfromnew,non-FIT/FIP/MPrenewableenergyplants,andnewelectricitydemandssuchasforBEVsusingtheadditionalgeneration,thatwouldnotariseintheclassicalmarketmodel.

• P2Ptradingusuallyusesblockchaintechnologyfortheeconomictransactions.Incontrast,itdoesnotalwaysrequireasmartmeterbutcanalsobedonewithstandardloadprofiles.

• Therefore,theoperationofaP2PtradingschemewillnotpersestimulatetheuseofflexibilityoptionssuchasDSM,flexiblegeneration,system-drivenuseofbatteries/BEV,andsmartchargers.P2Ptradingwillbeabletoperformthistask,ifsmartmetersareinstalledandincentivesformarket-orgrid-stabilizingfeed-inordemandbehavioraregiven,eitherdirectlyorthroughvariablesupplypricesandgridfees.

• Inthisdirection,theblockchaininfrastructureandsmartcontractsestablishedforP2Ptradingcouldmoreeasilyandquicklyenabletheimplementationofflexibilityincentivesasanadditionalfeature,assoonassmartmetersandassociatedITdevicesareused.Thereareincentivesforthebalancinggroupresponsibletousetheseflexibilities.

Inconclusion,on-gridP2Ptradingseemstooffersomepotentialforthecontinueduseofpost-FITrenewableenergiesaswellasnewinvestmentsinrenewableenergyplantswithoutaFIT/FIP/MPpayment,butthefuturedevelopmentisdifficulttoestimate.Inaddition,theuseofflexibilityoptionsforgridstabilizationwillbefacilitatedthroughtheP2PtradingplatformsandcontractsbutneedstobeaddedtoP2Ptradingthroughseparateincentives.

Self-organized,decentralizedautonomousmodelswithoutthesupportfromanexternalretailerorbalancinggroupresponsibleareunlikelytoflourishforon-gridP2Ptradingwithoutmajorchangesinlegislationandregulation,butcanbeusefulforoff-gridP2Ptradingwithinacertainsiteorbuildingbehindthegridconnectionandmeteringpoint.

Off-gridP2Ptradingmaybeunderstoodasakindofamulti-partyenergymanagementsystem(N.B.thisisalsothecasefortheon-gridmodelsJ6,J7forJapan).Off-gridP2Ptradingmaythusreducetheelectricityflowthroughtheconnectionpointwiththepublicgridandthusreduceneedstoreinforcedistributiongridinverylocalareas,asitmotivatesoptimizationofsupplyanddemand(usingbatteries)onsite.Butasfortheon-gridP2Ptradingmodels,thepossibilitiesforflexibilitiesingeneration,storage,anddemandwillonlybeusedformarketorgridstabilization,ifretailpricesorgridfeesarevariabletoreflectmarketpricesandgridbottlenecks,orspecialincentivesforindividualparticipantsandfortheirjointpurchasefromorsaletothegridareoffered.

TherearealsoanumberofrisksassociatedwithP2Ptrading,creatingneedsforfurtheranalysisanddevelopmentatsomepoints.

• AfeatureofP2Ptradingisthattheindividualconsumerscanchoosetopurchaseelectricityfromdifferentgeneratorsatdifferentprices.Whilethisprovidesincreasedconsumerchoice,italsoraisesquestionstypicallyassociatedwithit:isitdesirablethatnotallconsumersofaretailelectricitysupplierreceiveastandardizedproduct?Whowillgetthebestdeal?Thereareuncertaintiesbothforconsumersandgenerators,whethertheP2Ptradingwillbeeconomicallyadvantageouscomparedtothetraditionalsupplymodelwithchoicebetweenstandardizedoffers.



• TherearealsoanumberofopenquestionsandrisksassociatedwiththeblockchaintechnologyusedfortheP2Ptrading(cf.chapter4.1.2).However,theymaynotbesorelevantinamodelinvolvingatraditionalsupplierastheP2Ptradingplatformprovider(modelsG1toG3,J4andJ5),asthentheusualregulationsforconsumerprotectionrelativetoelectricitysuppliersapply.

• Privacyrisksofconsumers/prosumersmayalsoarisethroughtheuseofthesmartmeters(however,regulationinGermanyforthesmartmetergatewaysisverystrict,whichcausedyearsofdelayinsmartmeterroll-out)orfromusingaP2Pnetworkthatisnotoperatedbyaregisteredelectricitysupplier.

WethereforerecommendthatpolicyallowsandenablestheuseofP2PtradingofmodelsG1toG3andJ4andJ5,butcloselymonitorsthedevelopmenttolearnaboutitspotentialaswellasitspossiblepositiveornegativeimpacts.FurthersupportforappropriateP2Ptradingmodelsmaybeuseful,ifmonitoringrevealsthatotherexistingoptionsarenotsufficientlyabletosecuretheoperationofpost-FITplantsandtostimulatetheconstructionofnewRES-Eplants,e.g.,ifauctionsforFIP/MPforthelatterhaveproblemsinsecuringthevolumeofcapacityfromnewplantsneededtoachieveRES-Eexpansiontargets.

Inaddition,inordertosupporttheuseofflexibilitypotentialsofRES-Egeneratorsandparticularlyofdemandandstorage,policyshouldaccelerateandsupporttheroll-outofsmartmeters,especiallyinGermanywhichislaggingbehind,andotherITneeded,aswellastheiruseforstimulatingflexibilityoptions.ThiswillbeparticularlyusefulforparticipantsinexistingornewP2Ptrading,astheblockchaintransactioninfrastructurebuiltupforP2Ptradingmakesiteasiertointegratethetransactionsforflexibilityaswell.Inaddition,weseeaneedtosupportinvestmentsincreatingflexibilityoptionsthatcanbecontrolledusingthesmartmeters.

5.1.2 UsefulnessofmodelsofPowerPurchasingAgreements

On-sitePPA,justasoff-gridP2Ptrading,isalsoattractivesinceitwill(partly)avoidretailelectricityprices(incl.gridfees,taxesandFITsurchargeinJapan,butitwillnotavoidtheFITlevyinGermanyforPVplantslargerthan10kW)forthePPAparties.InJapan,thismodelisstillthemainstreamofPPA,whichisrelativelyeasiertobeimplementedcomparedtoon-gridPPA,sincetheJapaneseelectricitymarketislessmaturedandthecountryisnotabundantinrenewableelectricityasmuchasGermany.

Thismodelwouldincreasetheshareofgridcostsfortheotherconnectedconsumerstopay,whichisadistributionaleffect.Still,asitisamodelthatmayaccelerateconstructionofRES-Eplants,especiallybuilding-integratedPV,outsideoftheFIP/MPsystem,itshouldbeallowedbylawsandregulations.

ItcouldalsobecoupledwithP2Pnon-FIT/FIP/MPtradingforelectricitysurplusesorevenwithallowingfeed-inofsurpluspowerataFIP.Otherwise,thereisariskthatthefullpotentialforon-sitePVwillnotbeused,butonlythefractionofthepotentialcapacitythatisbelowatypicaldaytimeloadofthesite.Forexample,inJapan,thecapacityofon-sitePPAsisoftenintentionallysetwellbelowthemaximumloadofthesite.



AspecialmodelinGermanyisaimingtoenabletenantstopurchaseelectricityfromaPVplantonthebuildingtheylivein(theGermannameforthismodelis‘Mieterstrom’,whichmeans‘tenantelectricity’).Thisistryingtoputtenantsonparwithhouseholdsowningtheirhouse,whocaninvestinaPVplantandself-consumethepowerorearntheFIT.However,therulesandeconomicparametersarecurrentlynotsupportiveenoughformassroll-outoftheconcept.

On-gridPPA:1)Thiscanbeausefulmodelforsustainingpost-FIToperationofPVorwindpowerplants;buteitherthewholesalepowerpriceissufficienttosustaincontinuedoperationofpost-FITplant,sothataPPAisnotneeded;orthewholesalepowerpriceistoolowortoouncertain,soPPAscanprovidecertaintyorenablethecontinuedoperationatall.Thequestionmayinthatcasebe:Shouldthiscontinuedoperationnotbeforthebenefitofallconsumers,whopaidfortheplantsthoughouttheFITperiod?Andifso,howcanthebenefitsandcostsbeequallysharedbetweenallconsumers?Theoretically,thismaybeachievableeitherthroughakindof“macro-PPA”–i.e.thegovernmentregulatingthatTSOsorDSOs,orapublicsinglebuyerasinAustria,shouldbuythepowerofallpost-FITgeneratorsintheirareaatanegotiatedorfixedpriceandsellitasacertainshareofelectricitysuppliedattheaveragepriceachievedinthegridareatoallsuppliersservingcustomersinthearea,oraveragedacrossthecountry–orthrougha“2ndFITperiod”regulation,whichwouldmeananewbutmuchlowerFITissetorafeed-inpricedeterminedbyauctionsforthesegenerators5.Suchafollow-upregulationmaybeneededanywaytoensurecontinuedoperationofthosegeneratorsstillfittoproducebutnotfindingaPPAcontract,forthebenefitofGHGmitigation.Sowhynotapplyitforallpost-FITgenerators?Thesearequestionsconcerningthesustainingofpost-FIToperationofPVandwindplants,whicharestilllefttobeanswered.Theanswerprobablywouldneedtobegivenbyapoliticaldecision.

2)On-gridPPAcanalsoaccelerateexpansionofnewRES-Ecapacities,sinceitavoidstheneedforgoingthroughtheauctionforFIP/MPprocedure.ThisproceduremaybetoocostlyorriskyforthepotentialRES-Egenerators,ifthevolumesawardedaFIPthroughtheauctionaresmallerthanthesupplyofnewprojects.Thedirectpurchasefromnewnon-FIT/FIP/MPRES-Ecapacitiesalsoappearsattractivetocorporateconsumerswillingtodemonstrategreenpowerprocurement(cf.examplesinchapter3).

AdistributionalproblemcouldbethatitmaytakeawaythecheapestremainingsitesfornewRES-Eprojectsfrompublicelectricitysupply.Analternativecouldbetonotallowfurtheron-gridPPAs,buttoofferaspecialslotinauctionsforFIP/MPtocustomersinterestedindirectpowerpurchasefromnewinstallations.ThismayensurethatboththeseconsumersandthegeneralpublicpaythesameaveragepriceforelectricityfromnewRES-Ecapacities.

ForPPAstoo,theusefulmodelsshouldbecoupledwithsmartmetersandflexibilityincentives,inordertopromotetheuseofflexibilities.

5Note:ifthepriceinthe„macro-PPA“modelisfixedandtheaveragepriceisdeterminedacrossthewholecountry,thiswillbethesameasa„2ndFITperiod“scheme.



5.2 Policiesandregulationsneededforsuccessfulintroductionofthemodelsrecommended

5.2.1 P2Ptrading

Inchapter5.1.1,werecommendedthatpolicyallowsandenablestheuseofP2PtradingofmodelsG1toG3andJ4andJ5,butcloselymonitorsthedevelopmenttolearnaboutitspotentialaswellasitspossiblepositiveornegativeimpacts.

AreP2PenergytradingandPPAsthebestsolutionstosupporttheexpansionofrenewableenergiesintheelectricitysystemandmarket?Oraretherealternatives?WhetherconcretepolicysupportfortherenewableenergyP2Ptradingbusinessitselfmaybeneededandwanted,willdependonwhetherthereareotheroptions1)tosecuretheoperationofpost-FITplants,suchasakindof“macro-PPA”or“2ndFITperiod”regulation(seechapter5.1.2),and2)tostimulatetheconstructionofnewRES-Eplants,e.g.viaasufficientvolumeofcapacityawardedthroughauctionsforFIP/MPforthelatter.Theseare,intheend,politicaldecisionsonwhichrouteforexpansionofrenewableenergiesispreferred:

• ShouldthetargetbetoendfixedFITschemesaswellasauctionsforFIP/MPfornewrenewablepowerplants,andtosupportmarketsolutionssuchasP2PtradingandPPAsforcertifiedgreenelectricityinstead?

• OrisitwisertosecurepoliticallydefinedpathsforexpansionofthevarioustypesofrenewableenergiesthroughauctionsforFIP/MPandcontinuedfixedFITschemesforprosumer-scaletomedium-sizedPV,andincludingsupportforpost-FITgenerators?

ProponentsofthefirstparadigmarguethatRES-Egenerationisripeforthemarket,andmarketsaremoreefficientinreducingoverallcosts.Opponents,whomaysupportthesecondparadigminstead,arguethatalthoughsomeRES-Etechnologiesarenowcheaperthansomeconventionalpowerplantsonafull-costbasis,i.e.,ifthelatterhavetobebuiltnow,theexistingconventionalpowerplantsareoftenstillcheaperonamarginalcostbasisthannewRES-Efacilities.ThereisbroadagreementthatexistingRES-Eplantsshouldbeintegratedintothemarketasmuchaspossible.Ontheotherhand,onemayarguethataschemethatintegratesallrenewableenergygeneratorsinthesupplytoallconsumers,soallbenefitandpayequally,isfairerthanasysteminwhichsomeconsumersenterintobilateralcontractswithsomegenerators.Thelattermayprovidehigherbenefitstothequick,thebig,andthosewhocaninvesttimeinsearchingforthebestdeal,and(relatively)highercostsforalltheothers.

Ifthemonitoringrevealsthatotherexistingoptionsarenotsufficientlyabletosecuretheoperationofpost-FITplantsandtostimulatetheconstructionofnewRES-Eplants,aP2Ptradingschemecanbeconsideredasafunctionaloptionwhichcouldbedevelopedbythefollowingpolicyactionsorinstrumentstosupport:

InJapan,theymayincludespecifically1)revisionoftheexistingmeasurementlaw,whichrequirestoohighprecision,sothecostistoohightoconductP2Ptradingbyprosumers;2)establishmentofalegal/regulatoryframeworktoaddresstheprivacyriskassociatedwithindividualprivatedatacollectedbysmartmeters;3)establishmentofanappropriatelevelofthegridfee,which



currentlyisoftenconsideredtoohighforverysmallamountsofelectricitytradedbyprosumers;4)clarificationofanimbalanceresponsibilityoftheP2Pplatformer;5)clarificationoftherequirementofelectricityretailregistrationforP2Pplatformerandprosumer;6)revisionoftheexistingregulationonpartialelectricitysupplytosmallconsumers/prosumersbymultiplesuppliers(specificallyinthecaseofmodelJ5,sothatthismodelwouldbeallowedbylaw)(METI,2019).

InGermany,thereareagrowingnumberofpilotorfullcommercialschemesforP2Ptradingalreadyinoperation,asdiscussedinchapter3.Sotheremaynotbetheneedtoremoveanylegalbarriersortoprovideclarificationsaboutretaillicensesorbalancinggroupresponsibilities.However,aswehaveseen,thehaltthatwasputonthesmartmeterroll-out(seechapter2.3.1above)meantthatmanyprovidersofP2Ptradingplatformsalsoorexclusivelyofferthetradingtocustomerswithstandardloadprofiles.However,nowthecompetentauthorityofficiallystatedthatthepreconditionsarefulfilled,sothatthesmartmeterroll-outcanstart,andtheycanbeusedforP2Ptrading.Inaddition,thegovernmentcoulddevelopstandardrules/templatesforsmartcontracts,whichparticularlymeetdataandconsumerprotectionrequirements(cf.policysuggestion2)forJapan).AlthoughthesmartmetergatewaysnowcertifiedfortheGermanmarketarerequiredtomeethighdatasecuritystandardsfordatastorageandtransmission,theprotectionofdataforuseinthemarket,includingP2Ptrading,mayneedtoberegulatedfurther.

Wealsorecommendedinchapter5.1.1thatpolicyshouldnotonlyaccelerateandsupporttheroll-outofsmartmeters,nomatterifforP2Ptradingornot,butalsotheiruseforstimulatingflexibilityoptions.Inaddition,weseeaneedtosupportinvestmentsincreatingflexibilityoptions.

Regardingwhatareappropriatepoliciestostimulatetheinvestmentinflexibilityoptionsandtheiruseformarketbalancingandgridstability,thereisanongoingdebateparticularlyinGermany.Someexpertsassumethatthebestwaywouldbetodevelopshorter-termtrading,alsoforsmallerassets,whichcouldreducetheneedforbalancingmarketsandVPPs,andwouldbecombinedwithageneralelectricitymarketmodelwithcapacitymarkets.Thismaybetechnology-neutralandthusstimulatedevelopmentofthecheapestoptionsbothforelectricitygenerationandforflexibility,andpossiblyevenforenergyefficiencyschemes,providingNEGAWattcapacities.

Otherexpertsargueinfavorofkeepingtheenergy-onlymarketdesignbutaddingspecificanddetailedflexibilityinstruments.Thesewouldneedtobetechnology-specific,becausedifferentoptionswillbeneededfordifferentpurposes,havedifferentcostsandbarriers,needactionbydifferentmarketactors,andmayhavedifferentpotentialforfuturedevelopmentandcostreductions.A“neutral”capacitymarketmayinfactfavorsomeestablishedtechnologiesbuthinderthedevelopmentofalternativeswithmorepromisingfuturepotential.

Someexpertspointtothefactthatstorage,includingthroughelectrolysis,istreatedasaconsumerandhastopayalltaxesandlevies.However,werecommendnottoalleviatethisproblembyreducingelectricitypricesforallconsumers:electricitystillisthemostcostlyofthestandardenergycarriers,anditspriceshouldincentivizeenergyefficiencyandnewgenerationfromrenewableenergies.Whetherstoragefacilitiesrunbyenergycompanies(e.g.TSO,DSO,orsuppliers)shouldreceiveselectiveexemptionsfromtaxesandlevies,willneedcarefulanalysis.It



couldbeaninstrumenttostimulatebothinvestmentin,andoperationofstorage.However,thereshouldalsobeincentivesforDSM,whichisusuallycheaperthanstorage.

Flexibilityoptionsandinstrumentscanbeusedtostabilizeeithermarkets–throughimprovedbalancing–orgrids.Hence,theirusecanbestimulatedororganizedbybothsuppliersorTSOsandDSOs.VariableelectricitypricesforconsumersmayincentivizeDSMandmarket-orienteduseofstorage;inaddition,differentiatedpricesorgridfeescouldbeofferedforallowingremotecontrolofassetsbysuppliersorgridoperatorsinordertooptimizethebalancinggrouporstabilizethegrid,respectively.

InGermany,theSINTEGpilotprojectshavebeentestingnewformsofflexibilitymarketsalsoforgrisstabilizationsince2018.Theevaluationoftheirusefulnessandimpactsisstillongoing.

However,regardingthespecialaspectofflexibilitymarketsforredispatch,theGermanenergyregulationauthorityarguesstrictlyagainsttheseandotherbusinessmodelsforgrid-supportiveflexibility.ItcommentedontheP2PtradingpilotprojectbySonnenandTenneTasfollows(BNetzA2019;summaryandtranslationbytheauthorsofthisstudy):TheSonnen/TenneTpilotprojectendedinMai2019.Itshowedthatitistechnicallypossiblethatbatteriescanbeusedforredispatch.However,allplantoperatorsareobligatedtodaybylawtocontributetosystemsecurity.Nopaymentislegallyallowedforaservice(offeredincompetition,withthechanceofearningaprofit),butonlyacompensationforanynegativeimpactsisallowed.Hence,nobusinessmodelsforgrid-supportiveflexibilityarepossible.ThesewouldintheBNetzA’sviewalsonotbeuseful,astheprocurementofredispatchthroughmarketsbearstheriskofstrategicbehavior(calledIncrease-Decrease-Gaming).

5.2.2 PPAs

FordecidingonwhethertosupportthedevelopmentofPPAsthroughpolicies,andifso,howtosupportit,policyshouldtakethesameprincipaldecision:doesitwishtocontinuewithaFIT/FIP/MPscheme,includingauctionsforFIP/MP,orratherwithmarketsolutions?

ThecrucialrequirementforbroadsuccessofPPAsisthatthecostofFIT-expiredrenewableenergygeneratorsorevenofnewgeneratorsislowerthanthesupplypricesachievableorconsumersinthegeneralelectricitymarketoratleastthegreenelectricitymarket.Currently,giventheprojectsmentionedinchapter3,thisseemstobethecaseforon-sitePPAsusingPVinbothGermanyandJapan,andforon-gridPPAswithFIT-expiredwindpowerplantsandnewlarge-scalePVinGermany.

EvenwithacontinuedFIT/FIP/MPscheme,theremaybemarketnichesforthesetypesofPPAs.JustasforP2Ptrading,werecommendthatpolicy-makersshouldcontinuetolegallyallowandenabletheuseofPPAsbutcloselymonitortheirdevelopment.

Forexample,ifon-sitePPAsgrowalotincapacity,thismayerodetherevenuesofDSOsandTSOs.ItmaycreatetheneedtochangethegridfeesforconsumersbenefittingfromsuchPPAs,sothattheycoverafairshareofgridcosts.InGermanyinanycase,themodelthathasbeencreatedbylawosupplytenantsfromaPVplantontheroofofthebuildingtheyinhabit(called“Mieterstrom”inGerman)shouldbeimprovedtomakeitmoresuccessful.Japanmayconsidertoanalyzetheusefulnessandfeasibilityofsimilaron-sitemodelsformulti-familyhouses.



If,ontheotherhand,itturnsoutthaton-gridPPAsarenotsufficienttosupportthecontinuedoperationofalargeshareoftheFIT-expiredplants,policymayneedtocreateotherformsofsupport,e.g.toinstalloneofthealternativesdiscussedinchapter5.1.2:1)akindof“macro-PPA”regulationor2)a“2ndFITperiod”scheme.

Asdiscussedinchapter5.1.2aswell,analternativetoon-gridPPAsfornewinvestmentswithouttheFIPcouldbetoofferaspecialslotinauctionsforFIP/MPtocustomersinterestedindirectpowerpurchasefromnewinstallations.ThismayensurethatboththeseconsumersandthegeneralpublicpaythesameaveragepriceforelectricityfromnewRES-Ecapacities.



6 Conclusions,Recommendationsandfurtherneedsforresearch

6.1 ConclusionsandrecommendationsforP2PtradingandPPAsThispaperhasexaminedaseriesofquestionsonP2PtradingandPPAssetatthebeginning,whichconcernpurposes/objectivesofP2PtradingandPPAs,modelsofP2PtradingandPPAs,preconditionsfortheimplementationofthemodels,currentstatusofthedevelopmentinGermanyandJapan,incentives/opportunitiesandbarriers/threatsformarketactors,potentialpositive/negativeimpactsformarketsandenergysystem,andopportunities/threatsformarketactorsandconsumers/prosumers,inordertodrawrecommendationsonP2PtradingandPPAsandpoliciesneededfortheirsuccessfulimplementation.

Purposes/objectivesofP2PtradingandPPAs

Thepurposes/objectivesofP2Ptradinghavebeenidentifiedas;

1) enablingthecontinuedeconomicoperationofthepost-FITrenewableplants,forwhichtheirFITsupportperiodended;theirnumbersandcapacitywillbeincreasing,particularlyforwindandsolarplantsfrom2021inGermany,andalargenumberofresidentialroof-topsolarplantsevenfrom2019inJapan;

2) financingnewrenewablepowerplantsinapost-FITerawithoutFIT/FIP-typepayments,asitmaybeusefulandpossibleinthelongruntohaveamarketdesignintegratingrenewableassetswithoutaFIT/FIPscheme;

3) meetingcorporategreenelectricitypurchaseordecarbonizationgoals;4) matchingsupplyanddemandintotalandinregionaldecentralizedmarkets;5) gridstabilizationviatargetedP2Ptrading.

Similarly,thepurpose/objectivesofPPAsarefoundas;

1) thepromotionofnewlybuiltrenewablepowerplantsoverthelongerperiodinapost-FITera,providingsecurityofpriceandgreenelectricitysupplyforboth,generatorandbuyer;

2) supportingcontinuousoperationof“FIT-expired”renewableenergyplantswithoutexplicitfinancialsupportfromthepublicsectororenergyconsumers;

3) meetingcorporategreenelectricitypurchaseordecarbonizationgoals.

However,severaldistinctdifferencesbetweenP2PtradingandPPAsarehighlighted,whicharethecapacitysizeofpowerplants(typicallythoseinPPAsaremuchlargerthaninP2P),thetypeofconsumer(theconsumer/buyersideofPPAsislikelytobealargeorganizationwhichistypicallylargerthanP2P,oragreenelectricitysupplier,whereasitisoftensmallerconsumersforP2Ptrading),andthedurationofcontracts(durationofPPAsisnormallymuchlonger,forinstance3to20years,whichislongerthanP2Ptradingcontractsthatprobablyusuallyhavethesamedurationasnormalsupplycontracts).AllofthesedifferencesimplythatanamountofelectricitytradedunderaP2PtradingcontractcanbefarsmallerthaninPPAs.



ModelsforP2PtradingandPPAs

AnumberofmodelsforP2PtradinghavealreadybeenboththeoreticallyproposedandpracticallytestedinGermanyandJapan.Inthispaper,theyarerecategorizedaccordingtocentralityofwholesystemofoperation,focusingonwhohasoperationalresponsibilityofnetwork,betweenacentralizedmodel(controlledP2Pnetworkmodel)andadecentralizedmodel(decentralizedautonomousP2Pnetworkmodel).ThecontrolledP2Pnetworkmodelisfurtherclassifiedintothreesub-categorymodelswithrespecttotheobjectofeachmodelwhichare;Wholesalemarketmodel,Regional/localelectricityprocurementmodelandP2Ptradeservinggridstabilizationmodel.Inthesameway,thedecentralizedautonomousP2Pnetworkmodelisfurthersortedintotwosub-categorymodelsbetweenon-gridtradingandoff-gridtrading(localmicrogridmodel).Asaresult,intotal,fivecategoriesofmodelsofP2PtradingareidentifiedforGermanyandJapan,whicharesummarizedinTable2inchapter2.2.2..ThemodelsproposedinGermanycoverallfivecategories(specifically,ModelG1toG5foreachcategory),whilethemodelsproposedinJapanaresortedintotwomodels(ModelJ1-3intotheoff-gridmodelwithinthedecentralizedautonomousP2PnetworkmodelandModelJ4-J7intothewholesalemarketmodelwithinthecontrolledP2Pnetworkmodel).

PPAscansimplybedistinguishedintoon-siteandon-gridPPAs.

PreconditionsofP2PtradingandPPAs

WithregardtothepreconditionsofP2Ptrading,alarge-scaledeploymentofsmartmeters,alsoknownas‘intelligentmeteringsystems’inGermany,isidentifiedastheprimarypreconditiontoimplementP2Ptradingwithitsfullpotentialofsupportingflexiblemarketsandgrids.Thecurrentstatusandplanofsmartmeterroll-outinGermanyandJapanhighlightsacleardifferencebetweentwocountriesthataninstallationofsmartmetersisexpectedtobecompletedby2024inJapan,whereasitisexpectedby2032inGermany.ThisimpliesJapanis,atleastinatechnologicalinfrastructurebasis,inanadvancedpositionforanimplementationofP2PtradinginnationwidescalecomparedtothecaseofGermany.InGermany,therearenowP2Ptradingmodelsworkingwithstandardloadprofilesinsteadofloadsmeasuredandtransferredbysmartmeters.However,theroll-outofsmartmetersnowstartedinGermany.

Thesecondkeypreconditionisadigitalsystemfordatatransmissionandhandlingwithaneconomictransactionsystem,whichoftenemploysablockchaintechnology,butothersystemsusingacentraldatabaseanddataprocessingtechnologiesandsoftwarewouldbefeasibletoo.

CurrentstatusofdevelopmentofP2PtradingandPPAs

ThecurrentstatusofdevelopmentofP2PtradinginGermanyisquitepromising.Theremaycurrentlybemorethan15schemesintotal.Mostofthemareon-gridP2Ptradingcontrolledbyautilityoranew,specializedplatformprovider.Whilemostofthemarepilotprojects,therearefullcommercialproductsofP2Ptradingforrenewableelectricityavailablefromatleasttwoproviders.InJapan,onlyafewnumbersofprojectshavebeendevelopedonapilotbasis.Noneofthemarecommercializedyetandhaveopenedtangibleresultsinpublic.ThestageofthedevelopmentofP2PtradingisstillataverybeginningatleastinJapan.



RegardingPPAs,theexamplesinGermanyindicatethatPPAshavebeendevelopedinthecountry,thoughnotasmuchastheNetherlandsandtheUK.Itisexpectedtogrowincreasingly,especiallyforFIT-expiredplants,butalsofornewPVplantsthatwishtoavoidthecumbersomeauctioningprocessandtherisknottobeawarded.InJapan,thedevelopmentofPPAsisbehindGermanybutlikelytogrowinthenearfuture.

IncentivesandbarriersofP2PtradingandPPAsformarketactors

IntermsofincentivesandbarriersofP2Ptradingformarketactors,themostheavilyimpactedareawouldbethebusinessopportunitiesoftraditionalelectricityretailers.TherewouldbethesignificantriskoflosingtheirbusinessmarginastheircustomersmovetoP2Ptrading.Wholesaletradecompanies,includingVPPoperators,wouldalsobeaffectedsincethedirectP2Ptradingwillreducetheirbusinessopportunity.Therefore,thetraditionalelectricityretailerandthewholesaletradecompanywouldhaveastrongincentivetobecomeP2Pplatformersthemselvestoavoidlosingtheirbusinessmargin;thathasactuallybeenobservedinGermanyandJapan.Incontrast,smalltomediumrenewablegenerators,prosumersandconsumerswouldhavesubstantialpositiveopportunitiestoenterP2Ptrading.Theycanavoidthemarginofclassicalelectricitysupplyandsharethesesavingsbetweenthem,ifthecostsandtherisksassociatedwithanimplementationofP2Ptradingareeffectivelyaddressed.Risksincludethoseofprivacyanddatasecurityaswellasotherpotentialrisksofblockchaintechnologies.Inaddition,P2PplatformersandP2PplatformtechnologyproviderswouldseeenormousbusinessopportunityinthefieldofP2Ptrading.

TheimpactsonTSOandDSOwouldbeamixtureofpositiveopportunitiesandthreats.Thisisbecauseitisfoundthaton-gridP2Ptradingperseisunlikelytochangeanythinginphysicalflowsofelectricitycomparedtotheclassicalelectricitymarketmodel,unlesseithertheP2Ptradingexplicitlyincludesorinducesadditionaldemand/supplychangesthroughDSM,flexiblegeneration,system-drivenuseofbatteries/BEV,ortheyareinducedotherwisebygridoperatorsorgovernmentpolicies.Itwould,therefore,persenotprovideanyadditionalbenefitsforthealleviationofgridbottlenecksandthegridintegrationofrenewableenergywithoutadditionalmeasurestoinducechangesindemand/supply.Therefore,theimpactonTSOandDSOisdependingonwhetherornotadditionaldemand/supplychangecanbeinducedbysupplementalmeasuresassociatedwithP2Ptrading.

Theincentivesandbarriersforon-gridPPAsarequitesimilar,buttheirimpactsarefarlesssubstantialforallofthemarketactors,implyingthatPPAsaregenerallywellcompatibleevenintheexistingmarket.

On-sitePPAsaswellasoff-gridP2Ptradingareparticularlyattractiveforthepartiesinvolved,sincetheywill(partly)avoidretailelectricityprices(incl.gridfees,taxesandFITsurchargeinJapan,butinGermany,theywillnotavoidtheFITsurchargeforPVplantslargerthan10kW)fortheparties.

ImpactsofP2PtradingandPPAsformarketsandtheenergysystemintotal

ThealreadyexistingP2PtradingbusinessmodelsandPPAcontractsinbothcountriesindicatethatbothcouldcontributetothecontinueduseofpost-FITrenewableenergiesaswellasnew



investmentsinrenewableenergyplantswithoutaFIT/FIP/MPpayment.Thiswillbeincreasetheamountofrenewableenergyinthesystemandthereforebenefitsociety.Ifbothmodelsreducethemarginsofclassicalelectricitysupply,assomeP2PtradingschemesinGermanyseemtoindicate,thiswillbenefitsocietytoo.

However,asstatedabove,neitheron-gridP2Ptradingnoron-gridPPAmodelswillpersecontributetomarketorgridstabilizationthroughsupportingtheuseofflexibilityoptionsintheiroperation.Incentivesforgeneratorsandconsumersinthisdirectionwillneedtobeaddedthesameasinanyothermarketandsupplymodel.TotheextentthatP2Ptradingacceleratestheinstallationofsmartmeters,itwillalsoenhancethepossibilitiesforsupportingflexibilityoptionsthroughitssmartcontractsandblockchaintransactioninfrastructure.Ifoff-gridP2Ptradingandon-sitePPAsinvolvestorageandanenergymanagementsystembetweenP2PtradingparticipantsorwithinthePPAsite,thisislikelytoleadtosomegridstabilizationeffectsatthelocal(atleastsubstation)level.

Totheextentthatcustomersinon-sitePPAsaswellasoff-gridP2Ptradingsavegridfees,taxes,andFITsurcharges,thiswouldcauseadistributionaleffect,sincetheotherconnectedconsumerswouldhavetopayacorrespondinglyhighershareoftotalgridcostsandFITsurcharge,andthecommunityoftaxpayerswillloseacertainamount.

UsefulmodelsofP2PtradingandPPAs

Insofarastheycontributetotheobjectiveslistedabove,P2PtradingandPPAmodelswillbeuseful.

Foron-gridP2Ptrading,wefoundthatintheshortrun,onlythosemodelswillbepossibleinpractice,whichareofferedbyanexistingelectricitysupplieroperatingaP2Ptradingplatform,oranewP2Pplatformproviderthateithercantakebalancinggroupresponsibilityfortheparticipatinggenerators,prosumers,andconsumersorcooperateswithacompanythatorganizesbalancinggroupresponsibility(ModelsG1toG3inGermany,ModelJ4and,iflegalpreconditionsarecreated,ModelJ5inJapan).

Self-organized,decentralizedautonomousmodelswithoutthesupportfromanexternalretailerorbalancinggroupresponsibleareunlikelytoflourishforon-gridP2Ptrading(ModelG4)withoutmajorchangesinlegislationandregulation,butcanbeusefulforoff-gridP2Ptrading(ModelG5andModelJ1toJ3)withinacertainsiteorbuildingbehindthegridconnectionandmeteringpoint.

Bothon-siteandon-gridPPAmodelscanalsobeusefulforsustainingpost-FIToperationofPVorwindpowerplantsandaccelerateexpansionofnewRES-Ecapacities.

However,theopenquestionsaswellaspotentialrisksanddistributionaleffectsmentionedaboveshouldbeconsideredwhenassessingtheusefulnessofthesemodels.

PolicyrecommendationsregardingP2PtradingandPPAs

AreP2PenergytradingandPPAsthebestsolutionstosupporttheexpansionofrenewableenergiesintheelectricitysystemandmarket?Oraretherealternatives?WhetherconcretepolicysupportfortherenewableenergyP2Ptradingbusinessitselfmaybeneededandwanted,will



dependonwhetherthereareotheroptions1)tosecuretheoperationofpost-FITplants,suchasakindof“macro-PPA”or“2ndFITperiod”regulation(seechapter5.1.2),and2)tostimulatetheconstructionofnewRES-Eplants,e.g.viaasufficientvolumeofcapacityawardedthroughauctionsforFIP/MPforthelatter.Theseare,intheend,politicaldecisionsonwhichrouteforexpansionofrenewableenergiesispreferred:

• ShouldthetargetbetoendfixedFITschemesaswellasauctionsforFIP/MPfornewrenewablepowerplants,andtosupportmarketsolutionssuchasP2PtradingandPPAsforcertifiedgreenelectricityinstead?

• OrisitwisertosecurepoliticallydefinedpathsforexpansionofthevarioustypesofrenewableenergiesthroughauctionsforFIP/MPandcontinuedfixedFITschemesforprosumer-scaletomedium-sizedPV,andincludingsupportforpost-FITgenerators?

Itwilldependonsuchgeneralpoliticaldecisionsandparadigms,towhichextentpolicywillneedtoandshouldsupportthewide-scaleimplementationoftheusefulmodelsidentifiedbefore.EvenifageneraldecisiontowardsFITschemesandauctionsforFIP/MPistaken,P2PtradingandPPAsmaybeusefulinboostingrenewableenergydevelopmentfurther.

Sincethereareanumberofopenquestionsandrisksstilltobeclarifiedorresolved,werecommendthatpolicyallowsandenablestheuseofP2PtradingofmodelsG1toG3andJ4andJ5,butcloselymonitorsthedevelopmenttolearnaboutitspotentialaswellasitspossiblepositiveornegativeimpacts.FurthersupportforappropriateP2Ptradingmodelsmaybeuseful,amongotherpolicyoptions,ifmonitoringrevealsthatotherexistingoptionsarenotsufficientlyabletosecuretheoperationofpost-FITplantsandtostimulatetheconstructionofnewRES-Eplants,e.g.,ifauctionsforFIP/MPforthelatterhaveproblemsinsecuringthevolumeofcapacityfromnewplantsneededtoachieveRES-Eexpansiontargets.

Inaddition,inordertosupporttheuseofflexibilitypotentialsofRES-Egeneratorsandparticularlyofdemandandstorage,policyshouldaccelerateandsupporttheroll-outofsmartmeters,especiallyinGermanywhichislaggingbehind,andotherITneeded,aswellastheiruseforstimulatingflexibilityoptions.ThiswillbeparticularlyusefulforparticipantsinexistingornewP2Ptrading,astheblockchaintransactioninfrastructurebuiltupforP2Ptradingmakesiteasiertointegratethetransactionsforflexibilityaswell.Inaddition,weseeaneedtosupportinvestmentsincreatingflexibilityoptionsthatcanbecontrolledusingthesmartmeters.

TherequiredspecificpoliciestoenabletheuseofP2PtradingofmodelJ4andJ5inJapanhavebeenidentified,whichincludethoserelatedtotheexistingmeasurementlaw,privacyrisk,gridfees,imbalanceresponsibilityofP2Pplatformersandtheexistingregulationonpartialelectricitysupplytosmallconsumersbymultiplesuppliers.

ForGermany,asthegrowingnumberofpilotorfullycommercialschemesshows,on-gridP2Ptradingisalreadypossible.Policyshouldpromotetheircouplingwithflexibilityoptions,i.e.byacceleratingsmart-meterroll-out.Inaddition,thegovernmentcoulddevelopstandardrules/templatesforsmartcontracts,whichparticularlymeetdataandconsumerprotectionrequirements.



ForPPAs,wealsorecommendthatpolicy-makersshouldcontinuetolegallyallowandenabletheuseofPPAsbutcloselymonitortheirdevelopmentandimpacts,aswellaspotentialalternatives.

6.2 OutlookonfurtherfieldsofdigitalizationandtheenergytransitionInthisstudy,weanalyzedjustafewpotentialusesofdigitalizationfortheenergytransitionthatmaybeimportantforthefurtherdevelopmentandsystemintegrationofrenewableenergysources:VirtualPowerPlants(VPPs)inthefirstyear(Ninomiyaetal.2019),andP2PtradingaswellasPPAsinthesecondyear.However,therearemanymorepotentialusesofdigitalization,andpolicy-makersaswellasenergymarketactorshavetofurtheranalyzethem.Forexample,istherearoadmapforthedigitaltransformationoftheenergysectorandwhichneedsandoptionsforactionresultfromthisforthedifferentactors?ForasPreussetal.(2017)notesnotwithoutjustification:"Theterm'digitalization'nolongerdescribesatechnicalprocess,butaneconomic,socialandindividualchangeintheperceptionandshapingoftheworld.Aboveall,networkinghasenormoussocialandeconomiceffects.Thismeansthatthechangeishappeningbetweentheutilitycompany,itscustomersandnewmarketparticipants."(Preussetal.ibid.:16,translationbytheauthors).ThetraditionalenergysupplycompaniesinparticularareaffectedbythechangesintheenergymarketthatP2Ptradingandblockchainpotentiallyentailandmustpositionthemselvesaccordingly.

Inthiscontext,Doleski(2020)arguesfortheformulationofpossiblereferencetargetsalongtheenergyindustryvaluechainandidentifiespotentialfieldsofactivityandactionregardingtheuseofdigitalizationasshowninFigure5.Still,thesefieldsarelikelytobefarfromacomprehensivepictureofthepotentialusesofdigitalizationfortheenergytransition.

Figure9:Possiblefieldsofactivityfortheuseofdigitalization

Source:owngraphicsbasedonDoleski(2020:50)

However,theanalysisofalltheseoptionsisbeyondthescopeofthisstudy.

Powergenerationandstorage

•  Data-basedpowerplantcontrol

•  Decentralizedgeneration

•  Predictivemaintenance

•  Storageoptimizedforchargingcycles

•  Virtualpowerplants

Energytrading

•  Energybroker

•  Energytradingmarkets

•  HFTHighFrequencyTrading

•  Tradingsystems

•  Intradaytrading

•  PreciseforecastsforHFT

•  Smartmarket

Transportanddistribution

•  AssetManagement

•  Digitizednetworkplanning

•  integrationofdecetralizedplants

•  Localloadmanagement

•  Optimizednetworkcontrol

•  Predicitvemaintenance

•  SmartGrid

SupplyandSales

•  Contractingsolutions

•  CustomerRelationshipManagement

•  Customerselfservice

•  Individualizedoffers

•  Socialmediacommunication

•  Variabletariffs

Measurementandcontrol

•  Energydatamanagement

•  Digitalreal-timebilling

•  Remotereading

•  Gateawaymanagement

•  Modernmeasuringequipment

•  Smartmetering

•  Smartsubmetering

Energyserviceprovider

•  Demandresponse

•  Demandsidemanagement

•  E-Mobility•  Energymanagement

•  Plattformofferings

•  Regionalportals

•  SmartCity•  Smarthome

Customer/Prosumer

•  Energysupplyservice

•  Customerconsumptioncontrol

•  Serviceforenergycooperatives

•  Prosumerservices



6.3 FurtherresearchneedsThispaperhasfocusedonarangeofaspectsofP2PtradingandPPAswhichisoneoftheseriesofoutputsbythe2ndyearactivitiesofGJETC.ThiscanbeseenasasequentialpapertoNinomiyaetal.(2019)onVPPs,whichisanoutputof1styearactivitiesofGJETC.However,weneedtonoticethatVPP,P2Ptrading,andPPAsaremerelyapartofthebroadopportunityofdigitalizationfortheenergytransition.Duetotheverywideapplicationpotentialandveryfastdevelopmentofdigitaltechnology,itisnoteasytograsptheperspectiveoflinkagebetweendigitalizationandtheenergytransition.Ontheotherhand,itcallsforstrongeffortsofacademiaincludingtheGJETC.Weshallseekawaytobringthefullbenefitofdigitalizationtotheenergytransitionofbothcountriesthoughfurtherresearch.

§ What other applications and benefit but also challenges of digital technology for theenergytransitionareanticipated?

o Forexample,HomeEnergyManagementSystems (HEMS) in Japan/SmartHomeSystemsintheEU,BuildingEMS(BEMS)inJapan/BACS–BuildingautomationandcontrolsystemsintheEU,andotheroptimizationsystemsforindividualpremises,citydistricts,orevensmartcitiesareoneexample.

§ Whichapplicationwouldbringlargerbenefitsandthusshouldprioritized?

§ One aspect we were not able to address is the energy and resource use caused bydigitalization,andhowitcouldbereduced.

§ InwhichofthesefieldsdoGermanyandJapanalreadycooperate,andwhatarefurtherpromisingareasofcooperation?



7 BibliographyAgenturfürErneuerbareEnergien(AEE)(2018):Metaanalyse:DieDigitalisierungderEnergiewende.ForschungsradarEnergiewende(inGerman).

BloombergNEF(2019):CorporateEnergyBuyingSurgedtoNewRecord2018.NewYork,London.https://about.bnef.com/blog/corporate-clean-energy-buying-surged-new-record-2018/

Buchmüller,Christian(2018):PlattformökonomieundBlockchain-Technologie.NeueImpulsefürdiePeer-to-Peer-LieferungvonÖkostrom?.In:EWeRK,ZeitschriftdesInstitutsfürEnergie-undWettbewerbsrechtinderKommunalenWirtschafte.V.,18.Jahrgang,Heft4,S.117-125.NomosVerlagsgesellschaft.Baden-Baden(inGerman).

Bundesnetzagentur(2019):DieBlockchain-Technologie.PotenzialeundHerausforderungenindenNetzsektorenEnergieundTelekommunikation.Bonn(inGerman).

Bundesnetzagentur/Bundeskartellamt(2019):Monitoringreport2018inaccordancewithsection63(3)inconjunctionwithsection35oftheEnergyIndustryAct(EnWG)andsection48(3)inconjunctionwithsection53(3)oftheCompetitionAct(GWB).Editorialdeadline:29.May2019.Bonn.

Doleski,Oliver(2020):Energieversorungsunternehmenneudenken:Utility4.0.In:Doleski,Oliver(Editor)(2020):RealisierungUtility4.0Band1.PraxisderdigitalenEnergiewirtschaftvondenGrundlagenbiszurVerteilungimSmartGrid.SpringerVieweg.Wiesbaden.pp.3-62(inGerman).

EnergieAgentur.NRW(ea.nrw)(2020):Innovation&Energie.DasMagazinderEnergieAgentur.NRW.1/2020.Düsseldorf:EnergieAgentur.NRW(inGerman).

Energie&Management(2019):“VielTrafficbeiPPAbereitsjetztzuspüren”.PPABarometervom01.Juni2019.(inGerman)

EnergyBrainpool(2019):PowerPurchaseAgreementsII:Marktanalyse,Bepreisung&Hedgingstrategien.WhitePaper.Berlin(inGerman).

Enyway(2019):WhitepaperBlockchainÖkosystem.Version1.0.3vom27.05.2019.Hamburg(inGerman).

FfE(ForschungsstellefürEnergiewirtschafte.V.)(2018a):DieBlockchain-Technologie.ChancezurTransformationderEnergieversorgung?Berichtsteil:Technologiebericht.München(inGerman).

FfE(ForschungsstellefürEnergiewirtschafte.V.)(2018b):DieBlockchain-Technologie.ChancezurTransformationderEnergiewirtschaft?Berichtsteil:Anwendungsfälle.München(inGerman).

GJETC(2019):DigitalizationandtheEnergyTransition:VirtualPowerPlantsandBlockchain.ReportonanalysisinJapaneseFY2018:TheroleandstatusofVirtualPowerPlantsandblockchaintechnology.StudyfortheGJETC,adoptedandcommentedatthe6thmeetinginMarch2019.



Hilpert,Johannes(2018):RechtlicheBewertungvonPowerPurchasingAgreements(PPAs)miterneuerbarenEnergien.WürzburgerStudienzumUmweltenergierechtNr.12.StiftungUmweltenergierecht.Würzburg(inGerman).

IRENA(2018):CorporateSourcingofRenewables:MarketandIndustryTrends–REmadeIndex2018.InternationalRenewableEnergyAgency,AbuDhabi.

Kreuzburg,Michael(2018):RechtlicheundmarktorganisatorischeAnforderungenandenP2P-Stromhandel.FrankfurtSchoolBlockchainCenter.FSBCWorkingPaper.Frankfurt(inGerman).

METI(2019):Businessmodelclassificationonadvanceddistributionsector.ApresentationatStudyGroupontheApproachtoNewPowerPlatformsUsingNext-GenerationTechnology.MinistryofEconomy,TradeandIndustry,Japan.10May2019(inJapanese).https://www.meti.go.jp/shingikai/energy_environment/denryoku_platform/pdf/007_03_00.pdf

MinnaDenryoku(2018):Commercialisationoftraceabilityonelectricitytradingwithblockchaintechnology.PressRelease.5December2018(inJapanese).https://minden.co.jp/personal/wp-content/uploads/2018/12/release_20181205.pdf

Miyake,Seiya(2019):Supplyoftraceableelectricitytomaximisethevalueofrenewables.ApresentationatthecommitteemeetingatMETI.25July2019(inJapanese).https://www.meti.go.jp/shingikai/enecho/denryoku_gas/denryoku_gas/seido_kento/pdf/033_06_01.pdf

Ninomiya,Y.,Schröder,S.,Thomas,S.(2019):DigitalizationandtheEnergyTransition:VirtualPowerPlantsandBlockchain.Tokyo,Wuppertal:IEEJandWuppertalInstitute.

NTTFacilities(2019a):SupplyF-GreenelectricitytoSUBARU.PressReleaseon29May2019.(inJapanese)https://www.ntt-f.co.jp/news/2019/190529.html

NTTFacilities(2019b):SupplyF-GreenelectricitytoDai-ichiSankyoChemicalPharma.PressReleaseon8October2019.(inJapanese)https://www.nttf.co.jp/news/2019/191008.html

Pimentel,David(2018):Japan’sKansaiElectricPowerCo.ToTrialP2PRenewableEnergyTrading.BlockTribune.25April2018.https://blocktribune.com/japans-kansai-electric-power-co-to-trial-p2p-renewable-energy-trading

PowerLedger(2019):PowerLedgerandKEPCObringP2PenergytradingtoOsaka,Japan.Pressreleaseon12August2019.https://www.powerledger.io/article/power-ledger-and-kepco-bring-p2p-energy-trading-to-osaka-japan

Preuss,S.,Rauschert,A.,Köhler-Damm,A.,Riemer,S.,&Seidel,M.(2017).Energieversorger4.0:StudiezurDigitalisierungderEnergieversorger–In5SchrittenzumdigitalenEnergiemanager.Studie.Leipzig:QUANTICDigitalGmbH.https://static1.squarespace.com/sta-tic/55c46d75e4b09468e6fb147e/t/58ecf2d7cd0f6874ad476903/1491923693130/Energiever-sorger+4.0+-+Studie+zur+Digitalisierung+der+Energieversorger_QUANTIC+Digital.pdf (inGerman).



PwC(2016):Blockchain–ChancefürdieEnergieverbraucher?.KurzstudiefürdieVerbraucherzentraleNRW.Düsseldorf(inGerman).

Tanaka,Kenji(2019):ElectricitydistributionandP2P-blockchain-electricitybusinessinapost-FITera.OhmshaPublishing.Tokyo.2019(inJapanese).

WuppertalerStadtwerke(WSW)(2020):wsw.info.Wuppertal:WSW(inGerman).

Peer-to-Peer (P2P) electricity trading and Power Purchasing … · 2020. 7. 13. · Peer-to-Peer...

Documents

Transcript of Peer-to-Peer (P2P) electricity trading and Power Purchasing … · 2020. 7. 13. · Peer-to-Peer...