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MPhil in Engineering for Sustainable Development

global challenges, engineering solutions
 

New business models for energy trading through peer-to-peer energy and flexibility markets in the UK

Energy as an essential drive to power various industries, has a significant impact on modern society. Existing energy trading system is based on traditional energy contracts in a centralized manner that transactions have to be completed with the help of grid. Bilateral contracts, an-hour (or a-day) ahead market and ancillary services market are commonly used forms of traditional energy trading media. Under the global context of sharing economy, the national electricity system is experiencing significant changes to provide secure, affordable and clean electricity as well as achieving market flexibility. The conventional trading approach poses several challenges which impedes achieving energy sustainable goals, therefore, a new 4“D” development target, namely decentralization, decarbonization, democratization and digitalization, has been proposed. Particularly, to achieve the objective of digitalization, many technology tools such as artificial intelligence and blockchain are applied to promote energy industry transformation. P2P (peer-to-peer) energy trading as a typical digital technology, has raised huge social attention nationally and lots of P2P energy trade start-ups have emerged. However, there are limited review about these new projects from a business model perspective. This thesis aims to investigate new peer-to-peer energy trading projects and compare their positive and negative impacts on society by conducting a comprehensive review.

Firstly, a smart grid architecture model is selected to outline the general framework of P2Penergy trading. By investigating and analysing five new P2P projects, the thesis explores the operation model and unique points of each project. In addition, a case study of New York Brooklyn’s microgrid project is discussed in details to demonstrate the influence of P2P electricity trading comprehensively.

Secondly, the results of this research are summarized and expanded. P2P energy trading has the advantage of increasing efficiency and reducing transaction losses, but also has several shortages, such as lack of precious examples, resulting in complex and large network, and potential resistance from other stakeholders. What’s more, despite of similarities, P2P energy trading projects are very different in business models in terms of business entity, target customers, value propositions and profit sources.

Additionally, this thesis looks into its wide applicability in UK and concludes there is huge potential for P2P energy trading in UK market. Practical suggestions for building up a sustainable energy trading model are also provided. Consolidating urban planning, public engagement and smart home with P2P energy trading is the direction of this novel technology so as to achieve an integrated energy market ecosystem.

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Course Overview

Context

The need to engage in better problem definition through careful dialogue with all stakeholder groups and a proper recognition of context.

Perspectives

An ability to work with specialists from other disciplines and professional groups acknowledging that technical innovation and business skills also must be understood, nurtured and combined as precursors to the successful implementation of sustainable solutions.

Change

An understanding of mechanisms for managing change in organisations so future engineers are equipped to play a leadership role.

Tools

An awareness of a range of assessment frameworks, sustainability metrics and methodologies such as Life Cycle Analysis, Systems Dynamics, Multi-Criteria Decision making and Impact Assessment.