Paving the Path for Two-Sided Energy Markets: An Overview of Different Approaches

Abstract

The transition in the energy sector, initiated by increasing uptake of distributed energy resources (DER) and grid digitization, provides opportunities to improve energy efficiency through electricity market reformation. The development of a two-sided market allows delivering benefits of improved efficiency to energy customers. This paper discusses the opportunities and challenges related to transitioning to a two-sided energy market. The drivers to move toward a two-sided market, the benefits that this market can provide for different stakeholders, and enabling technologies for this transition are studied. An overview of different approaches that lay the groundwork for two-sided markets, including demand response (DR), virtual power plants (VPPs), peer-to-peer (P2P) trading, and transactive energy (TE) is provided. A classification of different approaches, along with examples of academic and industrial works, are presented to give some insights on the way each approach can pave the path to the market reformation. Finally, different approaches are compared and some of the challenges that need to be addressed in future works are identified.

Keywords

• Demand response
• distributed energy resources (DER)
• negawatt trading
• peer-to-peer (P2P) trading
• transactive energy (TE)
• two-sided market