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Designing microgrid energy markets

Author

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  • Mengelkamp, Esther
  • Gärttner, Johannes
  • Rock, Kerstin
  • Kessler, Scott
  • Orsini, Lawrence
  • Weinhardt, Christof

Abstract

Generation from distributed renewable energy sources is constantly increasing. Due to its volatility, the integration of this non-controllable generation poses severe challenges to the current energy system. Thus, ensuring a reliable balance of energy generation and consumption becomes increasingly demanding. In our approach to tackle these challenges, we suggest that consumers and prosumers can trade self-produced energy in a peer-to-peer fashion on microgrid energy markets. Thus, consumers and prosumers can keep profits from energy trading within their community. This provides incentives for investments in renewable generation plants and for locally balancing supply and demand. Hence, both financial as well as socio-economic incentives for the integration and expansion of locally produced renewable energy are provided. The efficient operation of these microgrid energy markets requires innovative information systems for integrating the market participants in a user-friendly and comprehensive way. To this end, we present the concept of a blockchain-based microgrid energy market without the need for central intermediaries. We derive seven market components as a framework for building efficient microgrid energy markets. Then, we evaluate the Brooklyn Microgrid project as a case study of such a market according to the required components. We show that the Brooklyn Microgrid fully satisfies three and partially fulfills an additional three of the seven components. Furthermore, the case study demonstrates that blockchains are an eligible technology to operate decentralized microgrid energy markets. However, current regulation does not allow to run local peer-to-peer energy markets in most countries and, hence, the seventh component cannot be satisfied yet.

Suggested Citation

  • Mengelkamp, Esther & Gärttner, Johannes & Rock, Kerstin & Kessler, Scott & Orsini, Lawrence & Weinhardt, Christof, 2018. "Designing microgrid energy markets," Applied Energy, Elsevier, vol. 210(C), pages 870-880.
    • Handle: RePEc:eee:appene:v:210:y:2018:i:c:p:870-880
    DOI: 10.1016/j.apenergy.2017.06.054
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