Peer to Peer Energy

2 minute read • updated August 29, 2018

Major trends

  • Consumers are swinging - strongly and quickly - in favor of clean, renewable energy, and they are demanding that their utilities meet that need.
  • Energy generation and storage is becoming increasingly decentralized - no longer can assume a hub and spoke model that carries energy from large, central generation to consumers.
  • There is a broad shift from flat-rate plans to increasingly exposing consumers to wholesale prices — from simple time of use to more elaborate demand response strategies.
  • Utilities are no longer simply an energy provider whose job is to deliver as many kwh reliably, but rather lifestyle enablers with a much richer customer relationship. — Rising demand, falling costs for residential energy storage - shift grid usage from peak to off-peak.

Hypothesis

Energy will shift from an invisible, taken-for-granted detail in consumers’ lives to a more consciously sourced and consumed commodity. Energy - and, in particular, cleanly-generated electricity - will become a social and community element. As residential consumers increasingly generate and store their own power, it is inevitable that they will want to transfer this between each other - to buy and sell their energy.

Story

The value in peer-to-peer markets is in allowing price signals to reach the edge of the grid. Prices allow buyers and sellers who may care about very different things - maximizing profit vs. minimizing carbon footprint - to transact in mutually beneficial ways. In a properly-designed p2p energy market, each consumer would be able to, in effect, place their own price on carbon emissions.

This bridges a major gap in consumers’ relationship with their carbon footprint. It is possible for an individual or household to reduce, even eliminate, their carbon footprint – by making individual choices about lifestyle and purchasing. And through subnational, national, and global policy shifts it is possible – if challenging – for societies to act in concert to, say, mandate emissions reductions. But there is very little that individuals within a community can do to influence the carbon footprint at the local or municipal level

We can work individually, or nationally, but not as a community to lower carbon.

Risks and Questions

  • Will the pace of residential storage adoption support a product which depends on a certain level of penetration of this technology?
  • Can utility partners be sold on an idea that places a spotlight on their changing role - from provider of electrons to a provider of lifestyle services?
  • Will monopoly utilities respond to consumer demand for services, however attractive, in the absence of regulatory mandate? What is required to achieve that mandate?
  • Equipment integration: Will residential storage technology providers be persuadable to open their units to market-driven dispatch?
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