Peer-to-peer trading could enable those with distributed energy resources (DERs) to earn up to 37% more for their electricity, according to LO3 Energy.
The energy tech firm conducted a 12-month local energy marketplace (LEM) trial in Australia looking at the associated network and market charges of P2P, which it said is one of P2P’s main challenges.
Three scenarios were modelled – one scenario where neither buyers or sellers paid network charges, one where the costs were split between the two and one where all costs were charged to the consumer.
The modelling was conducted alongside Siemens, Sustainable Australia Fund, CommPower Industrial, Simply Energy and Dairy Australia.
It found that trading local energy within a community incurs fewer losses and is more cost efficient than transmitting power over long distances.
When the consumer paid the costs – a scenario LO3 said is most consistent with existing markets and regulation – they could potentially save 6-12% by buying locally. And those selling the electricity generated from DERs could make 18-37% more than they currently do.
The findings could increase the adoption of DERs in much the saw way that the economics of DERs themselves have accelerated demand from consumers, LO3 said.
LO3’s blockchain-powered energy trading platform was used in the trial, with the 100 participants paying a small fee to access the platform it intends to launch commercially later this year.
The firm is involved in 10 trials worldwide, including Centrica’s Cornwall LEM trial. However, in the UK P2P trading can only go ahead as part of Ofgem’s regulatory sandbox due to regulation restricting consumers to one electricity supplier. This creates barriers for P2P, where a consumer could be buying electricity from any number of neighbours.
Belinda Kinkead, director of LO3 Australia, said: “The study showed the community wanted to embrace new technologies, wanted to keep energy spend in the community and wanted to buy their energy more cheaply.
“The test results demonstrated that even under existing restrictions a local energy market delivers that. The next step is to get these markets set up and then explore regulation changes to provide even bigger benefits.”
