Co-developing the first large-scale peer-to-peer energy trading market in the Netherlands
Among its various sustainability achievements, the Netherlands will soon be home to the first ever large-scale peer-to-peer (P2P) energy trading market. Set to go live in early 2020, this sustainable, customer-centric concept is based on novel blockchain technology, which enables prosumers to not only produce their own energy but to trade it with others. It is one of the first operational examples for Europe’s 2050 Energy strategy.
by Rolf Bastiaanssen, Bax & Company
Key to harnessing the potential of these technologies is the ability to create local energy markets. While current legislation in most European countries constrains initiatives for developing such energy markets, we obtained an exemption from Dutch Electricity laws through the Dutch Ministry of Economic Affairs, for up to 10 years. This means households and small- and medium-sized companies will be able to buy and sell electricity at prices determined in their own market, and trade it on the wider market. The aim is to gradually scale up the pilot to around 4.000 participants.
Unlike micro energy trading, P2P energy trading doesn’t just consist of homes, but also local businesses, farmers and public buildings. This wide mix of prosumers allows for more dynamic and efficient energy trading. Europe has never seen a pilot on such a large scale.
At Bax & Company, we connected Belgian tech provider Enervalis with relevant housing providers to make this project happen. The partners involved are the municipality of Eemnes, Eemnes Energie, EnergieVan, housing corporation De Alliantie, the Dutch government and the European Union. Together, they strive to tackle the flaws of energy usage today, whilst stimulating collaboration across the Netherlands.
WHY BLOCKCHAIN TECHNOLOGY?
Blockchain creates a decentralised database that has the same efficiency as a monopoly. It allows for people to make a transaction without actually having to trust the other party, putting their faith in the technology instead. This means we can collaborate and exchange confidently, for faster and more open energy trading. The people of Eemnes, Netherlands will soon be able to enjoy this secure technology, as many of their homes have solar panels. The municipality has been working for eight years on a focused policy in the area of sustainable energy and soon its citizens will be able to purchase and sell electricity from each other.
WHAT IMPACT WILL P2P ENERGY TRADING HAVE?
P2P energy trading empowers consumers. It also provides a number of other benefits: Housing developers can build more energy efficient and future-proofed housing, increasing their stock value; property owners can become prosumers and earn money from their solar investment; consumers can buy their energy at better rates, when they need it most; countries can have greener, more sustainable energy sources that balance generation and demand; and communities can come together over shared interests and investment. We will be able to produce cheaper energy, faster, and more of it. This means our homes will be much more sustainable. Moreover, P2P energy trading solves the congestion that electricity networks face, as they are often designed for one-way traffic and cannot handle the energy demand at busy peak times. Grid stability is a key priority.
Local energy communities pose a real challenge to the existing business models of the large energy providers and distribution companies. The new model will usher in the era of smaller businesses and to ensure a smooth transition requires a comprehensive alignment of regulation, consumer interests and evolving business models. Over time, we will move away from a reliance on big energy producers as we invest in local communities that ensure secure, wide-spread, and fast energy trading for all.
To find out more about setting up an innovative peer-to-peer energy trading market, get in touch!