Microgrids are making inroads into the global energy sector. Microgrid demand will reach $40.3 billion by 2026. They are not yet ubiquitous, but they have become essential components of the evolving energy landscape. As they spread, it becomes increasingly important for us to understand their impact, potential, and future scope.
As the market matures, we can anticipate significant changes in microgrid technology. Among them are advanced microgrids, greater integration of Distributed Energy Resources (DERs), microgrid standardization, and electric vehicle connectivity. The most intriguing development, however, is peer-to-peer (P2P) energy trading.
P2P energy trading takes place on blockchain-based marketplaces, where entities can buy or sell energy while managing their own price and volume risk. As the number of microgrids increases, it only makes sense to connect them via a common platform to transact energy, especially given the numerous benefits.
The Benefits of Peer-to-Peer Energy Trading
A study conducted in Portugal that examined the economic benefits of P2P trading for consumers and prosumers concluded that consumers could save up to 28% on their power bills and prosumers could see up to 55% economic gains. According to Lition, a German peer-to-peer energy trading platform, customers can save an average of 20% on their electricity bills while power plants can earn 30% more revenue. Aside from financial savings,P2P trading via microgrids can spell many other advantages:
Providing assistance to the main grid
Excess energy can be sold back to the grid to help manage peak demand. But that isn’t all. P2P trading platforms also aid in the intelligent management of distributed energy resources by involving stakeholders directly in congestion management. According to research, a well-designed P2P trading scheme encourages more careful use of electricity.
Informed users who understand peak loads and dynamic pricing are more likely to consume electricity at low-priced times, when the load is lower and prices are lower. This behavior aids in peak demand management and congestion control. As a result, power providers will be able to reduce their investments in new grid infrastructure and generation capacity.
In the United Kingdom, we saw one example of this advantage. Piclo, a peer-to-peer electricity trading platform, has added all six distribution companies to its Flex platform. The platform transforms DISCOMs into active network managers with the ability to make flexible decisions to meet distribution demands in specific grid locations.
What are its primary applications?
The centralized nature of the traditional power supply is its biggest weakness. Even if one part of the grid goes down, several regions become devoid of power. This has happened several times, especially during natural calamities. Often, several states lose their power supply together due to the interconnectedness. This is where microgrids come in.
Organizations and communities that want to reduce energy costs can install a microgrid on their campuses.
Organizations in critical need of energy 24/7 can bank on microgrids for their energy supply.
Communities that want to focus on sustainable energy production while reducing their carbon footprint can also find immense value in installing microgrids with solar and wind capabilities.
Remote communities, campuses, and rural areas that are hard to connect to the central power grid can set up a microgrid instead to serve their purposes.
Increasing the use of renewable energy
The Paris Agreement prioritized renewable energy adoption. With such lofty targets to meet by 2030, governments will need active citizen participation in renewable energy. P2P trading offers a strong incentive to convert consumers into renewable energy producers. Energy trading can provide the general public with a sense of ownership over the local microgrid, encouraging greater participation.
P2P trading will become commonplace with a systemic approach to technological innovation that aligns with evolving business models and regulations. Voltreum is on the cutting edge of the energy revolution. On our website, you can learn more about P2P trading via microgrids.
Conclusion
Pilot projects for P2P trading in energy are already underway around the world. Supported by positive data from these projects, the global electricity trading market will grow at a CAGR of 10% to $192.81 billion by 2023.
Several other microgrid projects are operating successfully across the world. Microgrids in several villages of Namibia, India, Norway, Ireland, Mauritius, New Caledonia, Australia, the US, and Germany show how they can transform rural lives by providing electricity. This approach needs to be further cemented by participatory governance and local ownership of projects. Only through decentralization and democratization of energy can every human in the world finally be connected to power.
For more information:
Website: https://voltreum.com/
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