P2P trading Sample Clauses

P2P trading. There is no internationally standardized definition of P2P trading, peer-to-peer electricity trading. In fact, P2P trading is a new concept whose functional possibility has not been fully explored yet. As an example specifically addressing P2P trading of electricity (or gas) from renewable energy, the EU RES Directive (EU 2018/2001, Article 2 Definition (18)) states that “peer-to-peer trading of renewable energy means the sale of renewable energy between market participants by means of a contract with predetermined conditions governing the automated execution and settlement of the transaction, either directly between market participants or indirectly through a certified third- party market participant, such as an aggregator.” In this paper, P2P trading can be defined as “a contractual model that will enable short-term electricity exchange on a regional or national scale between multiple peers such as ‘prosumers’ or/and small to medium power generators or/and electricity appliances located at the end of distribution networks, i.e. distributed energy resources”. The P2P trading will normally be based on contractual rules and electricity prices determined by the market or the contract, as well as predetermined conditions governing the automated execution and settlement of the transaction. Especially the last element, the automated execution and settlement, will require extensive use of digitalization. In most pilot or full business schemes existing to date, blockchain is used for this automated execution and settlement, but there may also be other software solutions for implementing it. As a rule today, electricity, including from renewable energy sources, is supplied to final consumers by electricity suppliers, who procure the electricity they supply from wholesale markets or, in some cases, directly from generators, including green electricity producers. Increasingly, however, the direct supply of green electricity from producers to final consumers is also being discussed and in some cases already practiced.

P2P trading. In chapter 5.1.1, we recommended that policy allows and enables the use of P2P trading of models G1 to G3 and J4 and J5, but closely monitors the development to learn about its potential as well as its possible positive or negative impacts. Are P2P energy trading and PPAs the best solutions to support the expansion of renewable energies in the electricity system and market? Or are there alternatives? Whether concrete policy support for the renewable energy P2P trading business itself may be needed and wanted, will depend on whether there are other options 1) to secure the operation of post-FIT plants, such as a kind of “macro-PPA” or “2nd FIT period” regulation (see chapter 5.1.2), and 2) to stimulate the construction of new RES-E plants, e.g. via a sufficient volume of capacity awarded through auctions for FIP/MP for the latter. These are, in the end, political decisions on which route for expansion of renewable energies is preferred: • Should the target be to end fixed FIT schemes as well as auctions for FIP/MP for new renewable power plants, and to support market solutions such as P2P trading and PPAs for certified green electricity instead? • Or is it wiser to secure politically defined paths for expansion of the various types of renewable energies through auctions for FIP/MP and continued fixed FIT schemes for prosumer-scale to medium-sized PV, and including support for post-FIT generators? Proponents of the first paradigm argue that RES-E generation is ripe for the market, and markets are more efficient in reducing overall costs. Opponents, who may support the second paradigm instead, argue that although some RES-E technologies are now cheaper than some conventional power plants on a full-cost basis, i.e., if the latter have to be built now, the existing conventional power plants are often still cheaper on a marginal cost basis than new RES-E facilities. There is broad agreement that existing RES-E plants should be integrated into the market as much as possible. On the other hand, one may argue that a scheme that integrates all renewable energy generators in the supply to all consumers, so all benefit and pay equally, is fairer than a system in which some consumers enter into bilateral contracts with some generators. The latter may provide higher benefits to the quick, the big, and those who can invest time in searching for the best deal, and (relatively) higher costs for all the others. If the monitoring reveals that other existing options are not s...