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Malaysia’s 1st Pilot Run of Peer-to-Peer (P2P) Energy Trading

05/11/202016 Likes

What is P2P Energy Trading?

  • Peer-to-peer energy (P2P) energy trading is the buying and selling of energy between two or more grid-connected parties.
  • Motivation for prosumers & consumers: prosumers have small financial gains while consumers have small energy savings.
  • P2P energy trading occurs when solar photovoltaic (PV) producer sells excess solar electricity on an energy trading platform to another consumers.
  • Users who both sell and consume energy are called ‘prosumers’.
  • Typically, prosumers will sell their solar electricity at a competitive rate compare to retailer’s tariff.
  • Participating consumers have the choice of purchasing solar electricity from the P2P and from the grid.
  • Grid operator is compensated with grid fee.
  • Retailer who is operating the energy trading platform is compensated with retailer’s fee.

P2P pilot project in Malaysia

  • P2P is one of the strategies to be explored under the Renewable Energy Transition Roadmap (RETR) 2035 study being undertaken by SEDA to augment the solar PV rooftop market.

Why are we test bedding this concept?

  • As part of RETR’s strategy to scale up renewable energy.
  • Leverage on 4IR to advance the renewable energy agenda.
  • Empowering prosumers & consumers with electricity choices.
  • Leverage opening of Third Party Access (TPA) and retail market.

Objectives of P2P Energy Trading Pilot Run

  • Identify regulatory provisions required for the sandbox run.
  • Evaluate technical requirements of P2P energy trading sandbox.
  • Simulate energy trading between prosumers and consumers, their financial impact and motivations for participation and;
  • Identify the challenges and mitigation actions in operationalizing the P2P energy trading.

Concept of P2P Energy Trading Pilot Run in Malaysia

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  • In 2019, SEDA has initiated a pilot run of the P2P energy trading within a regulatory sandbox which was approved by the Energy Commission (1st Oct 2019) commencing November 2019 until June 2020.
  • The regulatory sandbox approved by the Energy Commission of Malaysia allows NEM prosumers to sell excess solar PV electricity to Tenaga Nasional Berhad (TNB)’s consumers.
  • Pilot run is among net energy metering (NEM) prosumers and electricity consumers.

Definition of Regulatory Sandbox

  • A Regulatory Sandbox is defined as a ‘safe place’ where predetermined set of rules allow innovators to test their products, services, business models and delivery mechanisms in a live environment with relaxations on all or specific regulatory requirements. Regulatory Sandboxes will not only benefit innovators, but regulators as well.
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Definition of Regulatory Sandbox

Month No of Prosumer No of Consumer Energy Exported (kWh) Energy Traded (kWh) Energy Spillage
November (19) 4 4 9,358 8,963 4%
December (19) 4 5 15,433 13,963 10%
January (20) 5 5 73,077 55,837 24%
Feb (20) 4 6 55,738 47,537 15%
Mar (20) 4 6 203,280 94,369 54%
April (20) 4 8 142,287 98,085 31%
May (20) 4 8 112,868 87,893 22%
June (20) 4 8 68,603 62,939 8%

 

Note: High spillage in January was due to CNY holiday. High spillage in March due to start of Movement Control Order (MCO) and also having a prosumer with high energy export. Additional consumers came in after March and this helped to reduce spillage in subsequent months.

The 8 months P2P Pilot Run has achieved the followings:

  • Better understanding of the P2P concept and potential benefits to encourage renewable energy participants especially the solar rooftop owners;
  • Identified the technical requirement for P2P implementation including basic assessment to infrastructure readiness;
  • Identified risks, challenges and mitigations within the regulatory sandbox towards P2P implementation; and
  • Identified gaps of this pilot project for the P2P live implementation

Recommendation on the Way forward

SEDA has received strong support and expression of interests from the stakeholders and industry during the pilot project. Although the P2P pilot run has achieved some goals, SEDA acknowledges there are gaps which deserve further studies before live implementation. Further studies include:

  • Impacts of P2P to the grid, evaluate the balancing of supply and demand within distributed grid systems;
  • Feasibility of implementing P2P with full cost reflectivity; and
  • Designing suitable business models for electricity retailers.
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Source: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Jul/IRENA_Peer-to-peer_trading_2020.pdf?la=en&hash=D3E25A5BBA6FAC15B9C193F64CA3C8CBFE3F6F41

Updated as at September 2020.

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