Social and Economic Value in Emerging Decentralized Energy Business Models: A Critical Review

Abstract

In recent years, numerous studies have explored the opportunities and challenges for emerging decentralized energy systems and business models. However, few studies have focussed specifically on the economic and social value associated with three emerging models: peer-to-peer energy trading (P2P), community self-consumption (CSC) and transactive energy (TE). This article presents the findings of a systematic literature review to address this gap. The paper makes two main contributions to the literature. Firstly, it offers a synthesis of research on the social and economic value of P2P, CSC and TE systems, concluding that there is evidence for a variety of sources of social value (including energy independence, local benefits, social relationships, environmental responsibility and participation and purpose) and economic value (including via self-consumption of renewable electricity, reduced electricity import costs, and improved electricity export prices). Secondly, it identifies factors and conditions necessary for the success of these models, which include willingness to participate, participant engagement with technology, and project engagement of households and communities, among other factors. Finally, it discusses conflicts and trade-offs in the value propositions of the models, how the three models differ from one another in terms of the value they aim to deliver and some of the open challenges that require further attention by researchers and practitioners.

Drivers and Challenges of Peer-to-Peer Energy Trading Development in Thailand

“…However, Scuri et al [120] found that economic incentives do not appear to be a strong motivator for P2P energy trading. Participants in the PowerShare application P2P energy trading can develop new and existing social relationships through the sharing/trading of electricity within communities [32]. A sense of community was perceived by participants at three pilot sites in Portugal to be enhanced by P2P energy sharing activities [121].…”

“…As prosumers have control over setting the transaction terms and delivery of goods and services [8,13], the benefits they can harvest by participating in P2P trading are expected to be significant [31]. This concept provides benefits to the locality in which it operates, such as employment and investment in community assets [32]. Such a model can promote the use of renewable energy in energy communities such as cooperatives that allow residents to collectively benefit from renewable energy systems [33].…”

Value for Money: Local Authority Action on Clean Energy for Net Zero

“…The potential to maximise social value from clean energy investment is central to justifications for local government action. The concept of 'social value' offers a means to delineate expected co-benefits, but it remains subject to different interpretations, depending on interests and contexts, resulting in a degree of fluidity and ambiguity [19][20][21]. There is also long-standing debate about how to assign value to societal benefits, and whether these need to be quantifiable in order to govern decision making [22].…”

“…This aids the understanding of options for allocating responsibilities for governing change at differing scales and potential to customise transitions to locations. A place-specific perspective also considers the uneven processes and path dependencies which have particular local impacts related to differences in location and landscapes [28]; a distinctive example is the emergence of low carbon clean-tech clusters in the Ruhr Valley, Germany (see: [19,30]). "Place-specific" and "locally led" planning and action are customised to local interests, priorities and circumstances, rather than the implementation of centralised decisions.…”

Peer-to-Peer Energy Trading, Independence Aspirations and Financial Benefits Among Nigerian Households

“…While there is evidence in the literature on the technical aspects of P2P energy trading and some evidence from the global South, such as India (Singh et al, 2017(Singh et al, , 2018, there is still limited evidence from Africa on the socio-economic aspects, such as consumers' inclination to participate in such systems and the importance of financial benefits for engaging in energy trading. For example, the structured literature review by Adams et al (2021) found only one study on the social and economic value produced by P2P in Africa.…”