What does it mean to retail through peer to peer or blockchain?

Peer to peer retailing describes systems that are designed to connect generators directly to energy users. These companies are often startups with specialist digital platforms to manage energy data online. In theory a peer to peer retailer can show a solar owner, for example, how their surplus electricity is bought and sold amongst neighbours.

Energy users often value knowing that their electricity purchases can support more renewable energy or specific local energy investments. Peer to peer platforms can show users how much they have bought from each particular generator.

Peer to peer platforms need a relationship with electricity retailers to reconcile the buying and selling they do with the regulated market processes for electricity retailing. The exception is private systems, such as apartment blocks, known as embedded networks.

The main value of peer to peer retail arrangements is the additional information the platforms provide to customers about where electricity is purchased.

Is blockchain different from peer to peer?

Some peer to peer platforms use blockchain, a digital system that records transactions in a trust-free distributed manner. The novelty of blockchain is that it combines distributed information as needed. Most peer to peer platforms and retailers opt for a centralised database instead and blockchain accounting is not yet formally recognised by the electricity market.

Benefits of using a peer to peer or blockchain system

• Peer-to-peer retailing (P2P) allows for direct interaction between buyers and sellers.

• It will give you an opportunity for many conversations about electricity purchasing - raising awareness across your community.

• Some peer-to-peer platforms are taking the hard work out of renewable energy purchasing and creating offers that guarantees renewable electricity at all times of day and night.

• Peer-to-peer platforms often come with apps and prompts for users to help actively manage your energy use.

• Buyers become more aware of the times of day to use electricity in order to get the cheapest or cleanest result.

• If you have a local generator, it can be supported by your community through a peer-to-peer arrangement.

• Low risks and minimal upfront costs because much of the purchasing risk is managed by the platform or the retailer arrangements.

Possible benefits of blockchain:

• Data and information needs in electricity systems are growing, and blockchain can be used to simplify information flows.

• Blockchain arrangements might ultimately become the cheapest way to administer transactions but many changes will be needed in the market before these benefits can be realised.

• Championing a blockchain based system helps this innovation become more acceptable.

• Experimenting with blockchain in smaller projects will help this technology find good applications.

Some challenges of using a peer to peer or blockchain system

• Customers might not get the cost-savings they expect.

• You may attract many solar households with surplus solar to sell but far fewer non-solar customers who need to buy that surplus.

• You will need to look past the platform hype to understand how the peer to peer company interacts with the electricity market. You may need to verify their claims. You may need to understand how they cover electricity purchases when renewable energy is not available.

• You will need to be able to explain the difference between physical electricity flows and the accounting behind electricity retailing. Peer to peer retailing is mainly about the accounting.

When is using a peer to peer or blockchain system a good choice?

• You’d like to explore different retailing models but don’t know how many people you could get to join you.

• You have a diversity of generation and a diversity of energy users.

• You are running other programs to help people better use renewable electricity and other retail options are not helping you realise the value of these changes.

• You feel it is important to be connected to your source of generation and might be prepared to pay a premium for controlling where your energy comes from.

• You are able to explain the difference between physical electricity flows and the accounting behind electricity retailing.

• Your community can benefit from matching renewable energy production with electricity use, across time of day, season and location.

Peer to peer and blockchain examples

The People’s Grid is a peer to peer provider backed by Maximum Energy. The main renewable energy product matches solar and dispatchable renewable energy (landfill gas) with energy consumption.

Enosi calls its product "energy tracing". It has a similar aim of matching energy production with energy users.

Powerledger is Australia's first energy blockchain provider. It continues to trial the powerledger technology in a range of useful settings.

Synergy peer to peer trial. In WA, Synergy have partnered with Powerledger to trial peer to peer trading of surplus solar

Project Edge blockchain provider, Energy Web is one of the partners in the Project Edge trial, building a local energy marketplace for customer energy resources such as solar, batteries and flexible loads.

White Gum Valley apartments. This was an early Powerledger project. Energy sharing was easier in the apartment setting because the customers were already part of a shared system, known as an embedded network.

Sonnen Community. Sonnen sells batteries but they also promote an electricity retail product as a flat monthly fee if you have enough solar and battery energy. The idea is that across the whole Sonnen Community everyone can become self-sufficient for energy with a little support from the solar and batteries owned by other community members.

Other guides and resources

Promote Green Power

Set up a Power Purchase Agreement

Our explainer on how electricity is bought and sold.

Our explainer on what electricity bills pay for