Inform - Peer-to-Peer Exchanges: What Are They and Why Should We Care?
The proliferation of distributed energy resources (DERs) and grid-interactive devices is reshaping the way the grid needs to be managed, shifting it to a decentralized system where multiple parties have control over how their devices function.
Many legacy institutions and emerging startups alike are trying to find the best way to take advantage of this new decentralized grid. One application that has gotten a lot of hype over the past two years is peer-to-peer (P2P) energy trading using blockchain software technology. While blockchain has the potential to help facilitate transactions, it is not itself capable of the optimization of grid devices.
There is, however, a software layer that sits between blockchain protocols and P2P energy trading that enables the communication, optimization and coordination of trades, whether between households or between aggregators and utilities. This middle software layer could host transactions that would impact the physical management of the grid, such as a flexibility market.
In this research note GTM Research breaks down what a P2P exchange platform is, the potential value to grid management and the future challenges it will face to scale. In addition, GTM Research highlights four case studies where P2P exchanges are being used for different grid applications.