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Peer-to-Peer Energy Systems for Connected Communities: A Review of Recent Advances and Emerging Challenges

Wayes Tushar, Chau Yuen, Tapan Saha, Thomas Morstyn, Archie Chapman, M. Jan E Alam, Sarmad Hanif, H. Vincent Poor

arXiv:2011.11118v1cs.DC

TL;DR

P2P energy sharing lacks a comprehensive understanding of the gap between existing developments and what remains needed for viability in today’s electricity market. This review surveys connected communities, recent advances, and pilot projects, then identifies challenges to deployment; it reports demonstrated benefits for prosumers and the grid.

  • Problem

    A comprehensive understanding is lacking of the gap between existing P2P energy-sharing developments and what remains needed for a viable electricity-market management option.

  • Method

    The paper reviews connected-community and P2P energy-sharing literature, classifies recent advances by domain, surveys projects across four continents, and discusses deployment challenges.

  • Results

    The review finds that P2P sharing benefits both prosumers and the grid, while prosumers can reduce electricity costs and enjoy clean energy.

  • Takeaways & Limitations

    P2P sharing can empower prosumers with greater independence over the energy they produce, but challenges must be addressed before deployment as an energy-management option.

Abstract

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After a century of relative stability of the electricity industry, extensive deployment of distributed energy resources and recent advances in computation and communication technologies have changed the nature of how we consume, trade, and apply energy. The power system is facing a transition from its traditional hierarchical structure to a more deregulated model by introducing new energy distribution models such as peer-to-peer sharing for connected communities. The proven effectiveness of P2P sharing in benefiting both prosumers and the grid has been demonstrated in many studies and pilot projects. However, there is still no extensive implementation of such sharing models in today's electricity markets. This paper aims to shed some light on this gap through a comprehensive overview of recent advances in the P2P energy system and an insightful discussion of the challenges that need to be addressed in order to establish P2P sharing as a viable energy management option in today's electricity market. To this end, in this article, we provide some background on different aspects of P2P sharing. Then, we discuss advances in P2P sharing through a systematic domain-based classification. We also review different pilot projects on P2P sharing across the globe. Finally, we identify and discuss a number of challenges that need to be addressed for scaling up P2P sharing in the electricity market followed by concluding remarks at the end of the paper.

I. INTRODUCTION

P2P energy sharing gives prosumers independent control over local energy trading while offering potential benefits for consumers, DER owners, and the grid. This review organizes recent advances and pilot projects to identify barriers to scaling P2P sharing in current electricity markets.

  • Distributed energy resources: DER integration can benefit both grid operations and DER owners by supporting localized network performance, reducing electricity costs, and enabling revenues from surplus energy.Local energy markets turn DER owners into active prosumers who both consume and produce energy.
  • P2P energy sharing: P2P sharing enables prosumers to independently choose how much energy to share, the price, trading partners, and timing.A centralized controller may influence decisions through constraints, but cannot directly control what a prosumer trades.
  • P2P energy sharing: P2P trading aims to reduce greenhouse gas emissions, broaden low-cost trading access, provide grid flexibility and services, and strengthen prosumer privacy.Controllable DER techniques also support trading without violating network constraints.
  • Research landscape: Research on P2P sharing spans prosumer decision-making, physical network impacts, enabling platforms, and pilot projects across different regions.Existing reviews often focus narrowly on blockchain, distributed ledgers, game theory, computational approaches, or markets.
  • Research gap: Despite demonstrated benefits and extensive research, pathways for implementing P2P sharing in today’s electricity markets remain insufficiently addressed.The paper identifies a lack of comprehensive understanding of the gap between existing developments and requirements for scaling up P2P sharing.
  • Paper contributions: The review addresses this gap through background coverage, systematic domain-based classification, global pilot-project analysis, and discussion of scaling challenges.Its organization and focus distinguish it from reviews centered on specific technologies, computational mechanisms, or challenge lists.

II. BACKGROUND ON P2P SHARING

Connected communities coordinate distributed energy resources, flexible loads, grid infrastructure, and digital platforms so prosumers can share energy and services. P2P systems combine physical delivery with virtual trading, information, pricing, and energy management layers.

  • A. Connected community: Connected communities coordinate prosumers, distributed energy resources, flexible loads, and grid integration to improve efficiency and reduce energy use and peak demand.
  • A. Connected community: Distribution and transmission networks maintain physical connections, while energy service providers support virtual decision-making through transactive energy frameworks.
  • B. P2P energy sharing systems: P2P sharing enables prosumers to trade energy and flexibility while retaining decision-making over participation and trading parameters.
  • B. P2P energy sharing systems: The physical layer contains grid connections, smart meters, and communication infrastructure for transferring and monitoring energy.
  • B. P2P energy sharing systems: Smart meters and communication infrastructure exchange demand, generation, and market information subject to latency, throughput, reliability, and security requirements.
  • B. P2P energy sharing systems: The virtual layer integrates information systems, market operation, pricing, and energy management to match trades, balance supply and demand, and enforce prosumer rules.

C. P2P energy sharing market

P2P energy markets are classified by how trading and information exchange are coordinated. Coordinated markets centralize both functions, decentralized markets decentralize both, and community markets combine decentralized trading with centralized communication.

  • C. P2P energy sharing market: P2P markets comprise coordinated, decentralized, and community categories based on trading processes and information communication.
  • 1) Coordinated market: Coordinated markets use a central coordinator to communicate with peers, control export and import limits, and distribute community revenue under preset rules.
  • 1) Coordinated market: Coordinated markets can maximize social welfare, but increasing DER penetration can create extensive computational burdens and potentially compromise prosumer privacy.
  • 2) Decentralized market: Decentralized markets give prosumers control over participation and trading decisions, protect privacy, and offer exceptional scalability.
  • 2) Decentralized market: Decentralized markets have relatively low efficiency, do not attain maximum social welfare, and make network-constraint management more difficult.
  • 2) Decentralized market: Maintaining decentralized markets may require load curtailment or blocking peers to preserve grid reliability.

3) Community market:

Community markets centralize communication while decentralizing trading, allowing indirect coordination through pricing signals. Their operation depends on suitable pricing, participation, secure transactions, and enabling digital technologies.

  • 3) Community market: Community markets use a community manager for centralized communication but cannot directly control prosumers’ energy imports or exports.
  • 3) Community market: Limited information sharing and indirect pricing preserve prosumer privacy and autonomy in setting energy trading parameters.
  • 3) Community market: Community-market research designs pricing schemes that facilitate sharing, provide network energy services, and engage many prosumers.
  • 3) Community market: Different market types can coexist in composite paradigms that combine their respective characteristics, advantages, and disadvantages.
  • D. Technologies behind P2P sharing: Distributed ledger technologies address security, privacy, integrity, and transaction-speed concerns through ledgers, smart contracts, and consensus protocols.
  • 2) Internet-of-Things: IoT enables device communication, monitoring, control, and scheduling needed for prosumers to manage generation, demand, appliances, and sharing rules.
  • 3) Artificial intelligence: AI supports learning flexible-load usage patterns and prosumer bidding responses through reinforcement learning, deep learning, and related techniques.

4) Responsive buildings:

Responsive buildings combine sensing, communication, intelligence, and secure control to alter generation, consumption, and sharing behavior within connected communities. Their participation in P2P sharing depends on suitable DER flexibility, human preferences, and domain-specific conditions.

  • 4) Responsive buildings:: Responsive buildings adjust generation, consumption, and sharing behavior in response to signals from the grid, other buildings, or third parties.They can monitor and control real-time energy flows, optimize usage, and provide services to the grid and community entities.
  • 4) Responsive buildings:: Reliable low-latency communication, intelligent management, and secure trusted platforms are core capabilities for responsive buildings.These capabilities support device interaction, prediction and learning, adaptive actions across time slots, and resilience against unauthorized cyberattacks.
  • 4) Responsive buildings:: Uncoordinated DERs can cause reverse power flows, voltage rise, increased fault currents, and possible network equipment reinforcement.The review therefore highlights advances in controlling PV inverters, batteries, electric vehicles, and flexible loads.
  • 4) Responsive buildings:: P2P sharing research is organized into building, storage, and renewable domains, each with distinct participation characteristics and conditions.The domain-specific classification is intended to clarify the challenges and conditions prosumers must address to participate.
  • 4) Responsive buildings:: Building participation can use rooftop solar or storage, but flexible loads, interruptible appliances, and electric vehicles can also provide watt or negawatt sharing.Customer preference and comfort remain a key condition, while building management is discussed through management, co-generated energy and heat, and human-centric perspectives.

1) Building management:

Building management enables P2P participation by coordinating HVAC, lighting, and flexible loads to create surplus or reduce demand. The reviewed approaches include direct incentives, time-varying pricing, and occupant-aware control.

  • 1) Building management:: Building management systems coordinate HVAC, lighting, and flexible loads in residential and commercial buildings for P2P participation.These systems can create energy surplus or reduce energy deficiency through controllable building resources.
  • 1) Building management:: HVAC strategies include set-point adjustment, curtailment, pre-cooling, thermostat programming, temperature reset, and limits on air distribution or cooling equipment.Systematic adjustment can provide fast power reduction, although re-balancing the system may be difficult.
  • 1) Building management:: Flexible loads such as washing machines, dishwashers, hot water pumps, and EVs can be scheduled to support demand response and P2P markets.Control may be direct through incentive programs or indirect through time-varying rates that encourage reduction or load shifting.
  • 1) Building management:: Retailer incentive signals can prompt buildings to control flexible loads, HVAC, and lighting systems and produce surplus energy for community sharing.The figure presents this pathway as an example of building participation in P2P sharing.

2) Co-generated electricity and heat management:

Co-generated electricity and heat management extends P2P sharing to fuel-cell and combined-heat-and-power systems, while human-centric management prioritizes occupant comfort and preferences. Storage adds flexibility but introduces cost, space, and battery-life considerations.

  • 2) Co-generated electricity and heat management:: Fuel-cell combined heat-and-power systems are local DERs that can provide thermal and electrical efficiency, lower emissions, and reduced electricity bills.The reviewed studies examine operational scheduling and energy exchange among households with FC-CHP systems.
  • 2) Co-generated electricity and heat management:: P2P sharing can exchange co-generated heat and electricity between neighboring households while supporting local supply-demand balancing.The paper describes mixed-integer and energy-management approaches for operating multiple residential cogeneration systems.
  • 2) Co-generated electricity and heat management:: Human-centric management treats occupant convenience and preferences as priorities when designing building energy and P2P mechanisms.Applications include comfort-aware HVAC control, appliance control, and motivational approaches intended to encourage renewable-resource participation.
  • 2) Co-generated electricity and heat management:: Storage participation requires decisions about prioritizing storage types and coordinating charging and discharging according to price, demand, and available energy.Community storage may also face space and cost constraints, while extensive cycling can damage battery life.
  • 2) Co-generated electricity and heat management:: Storage prosumers can sell energy during peak-price periods and potentially operate off-grid during emergencies such as hurricanes or bushfires.The review classifies storage research into residential, community, and mobile storage while noting battery constraints.

1) Residential energy storage:

Residential, community, and mobile storage support P2P energy sharing through prosumer savings, grid services, and flexible coordination. The literature also covers community batteries and EVs, but storage cost, space, and battery degradation remain constraints.

  • 1) Residential energy storage:: A household can increase savings by up to 28% when both PV and storage participate in energy sharing.Other reviewed work reports almost 60% savings from combined P2P trading and battery storage compared with no P2P trading.
  • 1) Residential energy storage:: Battery systems can be expensive, and extensive charging and discharging can damage battery life, motivating comparisons between individual and community storage.The review reports that standalone battery and curtailed-energy costs may both be significant compared with P2P-sharing agreements.
  • 1) Residential energy storage:: Community storage can reduce energy costs without prosumers investing in individual batteries, while battery ownership can also be economically beneficial.Studies examine shared-storage sizing, allocation, pricing, and coordination mechanisms.
  • 1) Residential energy storage:: P2P sharing can help the grid reduce peak demand and balance local supply and demand while maintaining network security and loss performance.Prosumers may coordinate PV, batteries, energy use, and market orders to support these objectives.
  • 1) Residential energy storage:: EVs function as mobile storage that can provide demand flexibility, frequency regulation, and localized energy transfers between vehicle batteries.Reviewed mechanisms use blockchain, smart contracts, consortium systems, and optimization for EV-based P2P trading.

C. Renewable domain

P2P renewable-energy sharing spans solar, wind, and hydrogen applications, with reported benefits including cost reduction, supply-demand balancing, peak reduction, and network services. Its operation nevertheless requires surplus generation, coordination, and mechanisms for managing network constraints and losses.

  • Renewable P2P sharing requires surplus generation, while uncoordinated transactions can compromise network operation and security.
  • Solar, wind, and hydrogen are the three renewable sources discussed for P2P sharing.
  • P2P renewable sharing can reduce energy costs, balance supply and demand, and reduce peak demand.
  • Cost reduction: 4.36% lower buyer costs were reported for a multi-leader, multi-follower P2P model.
  • Network loss management: Network losses from P2P transactions require cost allocation, loss-aware pricing, and possibly electrically proximate peer matching.

2) Wind:

The reviewed work covers relatively limited wind-energy sharing, broader hydrogen-enabled coordination, and pilot projects using P2P trading across multiple regions. These studies address reserve scheduling, renewable-energy absorption, privacy, grid operation, and local trading.

  • 2) Wind:: Wind-energy P2P research is relatively small because residential houses usually do not install wind turbines.
  • 2) Wind:: A bilevel stochastic framework assesses wind-generator risk, reserve scheduling, and profit variability.
  • 3) Hydrogen:: Hydrogen-related P2P studies coordinate fuel-cell vehicles, storage, combined heat and power, renewable generation, and microgrids.
  • 3) Hydrogen:: A hydrogen-electricity market-clearing process uses participant bids and offers while avoiding complex calculations and preserving privacy.
  • IV. PILOT PROJECTS AROUND THE WORLD: Pilot projects are being trialed across North America, Europe, Australia, and Asia under varied testbed settings.
  • 1) North America:: The Brooklyn Microgrid uses smart meters, blockchain accounts, market orders, and smart contracts to support community energy trading.

2) Europe:

Europe contains numerous P2P energy-sharing demonstrations, including blockchain markets, cloud platforms, virtual energy pools, and local exchange systems. Projects also investigate ICT-enabled flexibility, DER operation, power balance, and network security.

  • 2) Europe:: European projects include blockchain-based markets, cloud platforms, solar-storage energy pools, and local prosumer exchange platforms.
  • 2) Europe:: P2P-SmartTest integrates advanced ICT, regional markets, demand-side flexibility, DER, and innovative business models.
  • 2) Europe:: The P2P-SmartTest approaches maintain second-to-second power balance and supply quality and security.
  • 3) Australia:: Australia’s RENew Nexus trials households trading rooftop-solar surplus through existing electricity networks and retailers.
  • 3) Australia:: The Australian trials examined localized energy markets, technology platforms, VPP financial benefits, and shared-battery trading.
  • 3) Australia:: The trials also tested P2P trading proof of concept, customer and partner value, and interoperability among platform and energy-system participants.

4) Asia:

Asian pilots test household solar trading and real-time price setting, while the review concludes that P2P sharing benefits prosumers and grids. Scaling remains dependent on regulation, stakeholder coordination, voltage control, and loss-aware pricing.

  • 4) Asia:: A Japanese trial integrated Power Ledger with household smart meters so participants could set prices and track solar trading in real time.
  • 4) Asia:: Japan, Thailand, South Korea, and India are described as having more than one P2P demonstration project.
  • The review states that P2P sharing benefits both prosumers and the grid, including lower electricity costs and clean-energy access.
  • P2P community flexibility can reduce peak demand and improve power-system security through ancillary-service markets.
  • Regulators determine permitted market designs, taxes, fees, and integration with existing energy markets and supply systems.
  • Large-scale deployment must coordinate retailers, generators, and DNSPs with potentially conflicting interests while managing voltage rise and network losses.

C. Post-settlement uncertainty

P2P energy sharing offers customer benefits but faces post-settlement uncertainty, communication and forecasting weaknesses, privacy and security risks, and computational constraints. The review surveys the field, pilot projects, and challenges affecting deployment in today’s electricity market.

  • Post-settlement uncertainty: P2P sharing can provide energy services and lower energy costs, but poorly designed prosumer interactions may undermine market trust.Communication delays, insufficient forecasting, limited network visibility, and inadequate customer information are identified as risks.
  • Post-settlement uncertainty: Inaccurate demand or generation forecasts can leave delivered energy below a prosumer’s commitment, producing a suboptimal market outcome unsuitable for long-term sustainability.The example concerns a prosumer paid for committed energy that transfers less energy to the buyer.
  • Post-settlement uncertainty: Robust operation requires resolving computation and communication complexity, improving forecasting, and accounting for network conditions in each P2P transaction.The review places these requirements before deployment in the energy market.
  • Post-settlement uncertainty: Shared transaction and usage data can improve prosumer decision-making, but accessible data must preserve privacy while retaining statistical accuracy.The review identifies provably private transformations as a possible way to balance data accessibility and analysis.
  • Post-settlement uncertainty: Security remains a deployment challenge because adversarial prosumers may inject false information, while blockchain-based protection can be computationally expensive.The review calls for transaction-security methods that avoid relying only on expensive measures.
  • Review scope: The paper reviews P2P literature, domain-specific advances, global trials, and challenges preventing P2P sharing from becoming a viable electricity-market option.Its coverage includes connected communities, P2P markets, distributed ledger technology, building, storage, and renewable domains.
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